Yeah it's hard to believe, but that's part of the issue. She's never been a politician, and was a second rate administrator / civil servant at best before she was chosen for the position. I think that we often overestimate the abilities of leaders everywhere in the world...

In addition, China is happy to let Carrie and HK stumble...to a certain extent of course. But they truly have been very hands off on the HK protests. I think it's worth noting that China is perfectly fine with HK getting burned by itself just as long certain lines aren't crossed (independence, violence against PLA, etc.). They weren't worried about losing HK when it was under British colonial rule, they certainly aren't worried now.

Furthermore, things really aren't that bad considering how the media has been reporting HK. It's still an extremely well-to-do city and life goes on in most parts.