At last China has bowed before the demands of its people for freedom

Half a million people took to the streets of Hong Kong to protest against a draconian security bill that would have repressed them fiercely

Almost unnoticed in Britain, the people of Hong Kong have in the past fortnight led a dazzling crusade to resist the encroachment of Chinese communist oppression - and they have won. This is the best news from China in nearly 15 years, and its implications for the 1.3 billion people trapped under the authoritarian system headed by Hu Jintao could prove to be immense.

The Chinese Communists have insisted since they seized power in 1949 that no amount of public pressure could sway them; the party is the sole custodian of Chinese interests, and any protesters were simply refusing to see the wisdom of the party leaders. Remember Tiananmen.

The experience in Hong Kong reverses all that. Half a million people took to the streets to protest against the decision to impose a draconian internal security bill that would have repressed them almost as fiercely as their cousins in mainland China. The Chinese government has withdrawn the bill. They have been forced by their people, for the first time, to lose face.

Consecutive Chinese governments - and their apologists in the West, such as Henry Kissinger and Edward Heath - have told us that the Chinese people do not want democracy. They have claimed that "Asian values" preclude basic human rights, and democracy . This is not - to choose just one example - what the people of the Shao village in southern Hebei said when they rioted recently for the right to vote, only to be attacked by 700 thuggish police.

In a concession to these internal calls for democracy, the regime has experimented with incremental, low-level elections. Jintao, the general secretary of the Chinese Communist Party since last year, boasts that most Chinese villages now choose their own leaders in competitive contests, but the evidence suggests that he is exaggerating. The best study we have by independent observers, headed by Kevin O'Brien of the University of California, shows that at best 17 per cent of the village elections are free and open, and in the vast majority of cases, candidates are chosen by the local party branch or by unaccountable officials.

Yet there is a substantial constituency in China that has a vested interest in resisting any democratic moves. Professor An Sen, of the University of Singapore, has shown how, as China grows more capitalist, class divisions are widening, pushing the rich from acquiescence towards outright support for the regime. The rich Chinese - a comparatively small group - are becoming terrified of an increasingly disgruntled poor, who have no trade unions and no political voice and are increasingly resorting to the desperate tactic of hunger strikes as their only method of protest.

Sen explains: "Everyone knows that the large, poorly educated majority of Chinese have little hope of making it into the middle class, and that the rich will keep looking to the authoritarian state to safeguard their property." This is not an argument against increasing capitalism in China, which is infinitely preferable to the crazy Stalinist economics of the Mao era and has already lifted 250 million people out of poverty. But it is an argument that market economies, if not inextricably linked with democracy and the right to form trade unions, impose a horrific burden on those at the bottom of the heap.

It has long been assumed that opening up the Chinese economy would inevitably lead to an opening up of Chinese politics. This was the main moral case for China's accession to the World Trade Organisation. Yes, capitalist economies - if they are to work at all - require the development of organisations that are independent of the state, and this nudges a culture slightly closer to democracy, but only very slightly. There are other, countervailing, trends in China that are pushing the culture in the opposite direction.

Since reform began in the early 1980s, Chinese politics has been primarily a battle between two factions: reformists and leftists. Reformists are democratically inclined students and intellectuals who want to promote human rights and democratic participation. Leftists are primarily Communist Party bureaucrats who take the system of Maoist China as their ideal and fight to retain the party's power and its grip on social life. The two broad philosophies competed until the mid-1990s for the patronage of the party's leaders.

But worryingly, as the Chinese academic Gongqin Xiao has argued, both groups have been superceded by a new class of "authoritarian technocrats", typified by Jintao, who have no nostalgia for Mao but also have no interest in democracy. They seek instead massive extension of markets unhindered by democracy, and believe that politics can remain solely the preserve of the Communist élite. This school brooks no dissent and does not see itself as competing with other philosophies. It is entirely unrepentant about the occupation of Tibet; indeed, it believes that the Chinese Communist Party has been especially generous to the Tibetans.

Gradual progress towards democracy instigated by the Communist Party would be by far the best route from here. Another, democratic, Chinese revolution, that overthrows the party is appealing but unlikely. Chinese culture is racked with a real fear of instability, and the experience of post-Communist Russia - where life expectancy has plunged and mafia rule has spread - has made Chinese people extremely anxious about radical change.

The only available moral option for Western governments - and it is an imperfect one - is to encourage both reformers within the Chinese system and dissidents without. One of the most shameful moments in Blair's premiership was when pro-democracy demonstrators were hidden from view during President Jiang Zemin's visit to Britain in 1998. He has a chance to right that wrong now. When he visits China later this summer, he should make a point of calling for democracy, and he should go one step further and meet up with Chinese dissidents here in London before he goes.

None of us should imagine that challenging Chinese autocracy is somebody else's business. The Sars epidemic this year demonstrated that we are all vulnerable to the effects of injustice and suppressed democracy anywhere in the world. The Nobel prize-winning economist Amartya Sen has shown that famines are far less prevalent in democracies, because they have governments that are responsive to early warning signs. The same is true of the spread of disease; democratic countries such as Canada detected and dealt with Sars much faster than China.

Indeed, it seems, according to the prevailing theories, that the urban poverty that has emerged in China in the absence of democracy may have been a key factor in the genesis of the disease. Sars was just a warning; if it had been a more deadly virus, we would all be paying the price for China's autocracy. The people of Hong Kong are not only helping the Chinese; they might just be saving our lives too.

j.hari@independent.co.uk