They felt that the Hong Kong administration was losing control to democratic forces and was being out-thought by very creative and very courageous young democracy advocates, whose success showed in local district elections just a few months later. The flames of democracy were really beginning to be kindled by this. That, of course, is the last thing China wants. They're doing everything they can to extinguish that.
There was a lot of hope at the time, in 1997, that China would be willing to see developments in Hong Kong and the growing autonomy of Hong Kong institutions. They've completely abandoned that.