Hong Kong is abuzz with rumours that the territory's Chief Executive Tung Chee-hwa is about to resign.
If the reports turn out to be true, China's leaders are likely to have agreed to the move with great reluctance - perhaps believing that it was worth losing some face in order to cut their losses.
Mr Tung has been shaken by two major protests in the last two years
Mr Tung's retirement after seven and a half years in office - he was due to stay on until 2007 - will only reinforce the widespread doubts about Beijing's wisdom in appointing him, and then insisting he serve a second term.
China's leaders may worry that the unpopular Mr Tung's resignation sends a signal to Hong Kong people that if they complain long and hard enough, they could force the resignation of other leaders too.
And it will also now be harder than ever for Beijing to pretend that Hong Kong people govern themselves without interference under its vaunted "One Country, Two Systems" formula.
"This whole thing has been highly stage-managed," said Christine Loh, a former member of Hong Kong's Legislative Council who now runs a public policy think tank, Civic Exchange.
"There was a lot of discussion about it in Beijing and it was agreed right at the top of the politburo - we know that much," she said.
Rumours of Mr Tung's impending departure began circulating on Monday after the 67-year-old former shipping magnate was made a member of a largely powerless advisory body to China's parliament - a move some saw as a way of easing him out of office in Hong Kong.
Although the reports that he has actually handed in his resignation have appeared in Hong Kong media, they have been based on sources in Beijing.
"If the reports are confirmed... there will no longer be the smallest doubt that Beijing was where the appointment was first made and where it can be ended at will," said Stephen Vines, a writer and commentator based in Hong Kong.
It looked very much as if China's leaders had decided to dispense with the incumbent they had picked in the first place, he said.
But Christine Loh of Civic Exchange believes it will eventually come out that Mr Tung wanted to leave and that Beijing agreed.
"It's a lesser risk for them if he goes early. It would be worse if he just crawled to the finishing line in 2007 - in that case the politburo thinks there would just be a continuing murmur of discontent," she said.
"Tung has already had two years in which to try to recover his credibility after the mass protests of 2003, but his inability to scramble back has left the whole government discredited," she said.
Factors that have helped induce Mr Tung's unpopularity since he took over his job in 1997 include successive crises over the economy and Sars; his ill-fated attempt to push through a draconian security law; and his continued support for Beijing in limiting democratic reforms.
Mr Tung's deputy, Donald Tsang - a veteran of the British civil service - is thought the most likely candidate to take over from him, if only on a temporary basis.
Under the Basic Law, Hong Kong's mini-constitution, the Beijing-appointed 800-strong committee which chooses Hong Kong's leader must hold an election within six months.
The need to act quickly to find a replacement may be used as an excuse for a further delay in the long-promised consideration of constitutional reforms.
"This will give them another four years breathing space, without even having to make the minimal changes they were talking about," said one analyst.
Whoever takes over from Mr Tung under current arrangements, it will not make much difference to the man or woman in the street, according to Elizabeth Tang, chief executive of the Hong Kong Confederation of Trade Unions.
"This isn't going to mean much of a change, since it's clear that the whole process of removing and replacing the chief executive has nothing to do with the people," she said.
Mr Tung was picked by China from relative obscurity
"We have no choice. The people have no idea what's going on."
An opinion poll this week showed that a majority of Hong Kong residents were dissatisfied with all the likely candidates to take over any vacancy in the top job.
"Unfortunately, people are now starting to worry that the next leader will be just as unpopular as this one," said Ms Tang.
But having had eight years experience of dealing with Hong Kong, China's leaders may at least be better prepared this time to choose the right person to run the place on their behalf.