Chinese foreign ministry spokesperson Geng Shuang called the decision an attempt to "listen more widely to the views of the community and restore calm to the community as soon as possible".
"We support, respect and understand this decision," Geng Shuang said in a statement, hours after Hong Kong Chief Executive Carrie Lam announced the bill's suspension.
Opposition to the Beijing-backed bill united an unusually wide cross-section of Hong Kong.
"The rights and freedoms enjoyed by Hong Kong residents are fully protected in accordance with the law. The facts are obvious to all," the Chinese foreign ministry statement said.
"Maintaining Hong Kong's prosperity and stability is not only in the interests of China, but also in the interests of all countries in the world."
A separate statement by the Chinese central government agency that handles Hong Kong-related affairs said the extradition bill was "necessary and justified" to plug what it called loopholes in current laws.
It said China continues to support the extradition bill and "pays close attention" to public opposition to the legislation.
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