The climbdown on the goods and services tax is a slap in the face for the self-proclaimed 'can-do' administration.
At the same time, it is another reminder of Donald Tsang Yam-kuen's political pragmatism.
Two months after the government rejected lawmakers' calls for the GST consultation to be shortened in the face of public opposition, the Tsang team has shown itself to be a quick learner. It was just last weekend that visiting state leader Wu Bangguo reminded them of the need for a harmonious society.
Keeping the proposal going was risky in the charged political environment ahead of the chief executive election in March and the 10th anniversary of the July 1 handover. Never mind the repeated assurances since the exercise began in July that a consultation is a consultation and that no decision was about to be taken. Forget Financial Secretary Henry Tang Ying-yen's subsequent comment that, even if the consultation ended inconclusively, it would still have been a worthwhile civic education exercise if people understood the importance of striking a balance between rights and obligations.
That there has been no meeting of minds on substantive tax-related issues speaks volumes for the lack of political will, or skill, to secure support for difficult policies. Following the constitutional reform fiasco and the scrapping of the original proposals for the West Kowloon cultural hub project, the government's about-turn says much about its political conundrum.
The administration, deep in its heart, may be convinced it is on the right side of history. But given that it commands no votes in the Legislative Council, Mr Tsang seems to have grown increasingly realistic about the difficulty of trying to get things done.