This paper investigates how Beijing governs its two special administrative regions (SARs) of Hong Kong and Macau through leverages on their local autonomy. First, a conceptual analysis of local autonomy will be provided. Local autonomy is more than a zero-sum game between the central and local authorities over how much power should be granted or taken from the local authorities; it also concerns the space for cultural expression and the use of local customs in public administration. Second, the degree of local autonomy in Hong Kong and Macau will be critically examined. On paper, both SAR governments are able to freely make decisions on a wide range of policies. In practice, however, Beijing has the absolute authority to override the decisions of Hong Kong and Macau. It is argued that the autonomy in cultural expression can compensate for the institutional constraints on the two SARs’ decision-making power and is thus able to alleviate public discontent – as long as the constraints do not conflict with the people’s core values and ways of life.