Answer by Joseph Wang:
Beijing maintains a behind the scenes role. Essentially they back up the local land developers and tycoons. So the tycoons run Hong Kong and keep it quiet, and Beijing sets up the rules so that they can continue to run Hong Kong.
An example of this is how the tycoons tried to keep control of the Chief Executive. The tycoons scare Beijing into thinking that they need to keep "crazy people" from becoming CE, so Beijing passes some restrictive rules that insure that the CE is in the pocket of the tycoons. At that point the tycoons tell Hong Kong, you must follow these rules since they came from Beijing.