The recently closed People Book Cafe in Hong Kong’s Causeway Bay district, which sold books banned by the Communist Party of China.

Rumours the People’s Bookshop shut its doors after pressure from the government, which is aligned with Beijing.

The last bookshop in Hong Kong selling titles banned by the Communist Party on the mainland has closed, marking the last chapter of the city’s historic independent publishing scene.

Human rights activists and publishers have raised grave concerns over the closure of the People’s Bookstore, a tiny shop in Hong Kong’s Causeway Bay district, known to be the last source of literary contraband in the city, in the latest example of China’s tightening pressure over the city.

The Guardian spoke to locals familiar with the matter who believe bookseller Paul Tang closed the shop under pressure from the government. A frequent visitor of the shop, who preferred to remain anonymous, said the city “was once the place where mainland readers came looking for the truth. But today, you’re afraid to even mention these forbidden topics.”

Fears that Beijing has hardened its policy on freedom of speech were raised earlier this month when the Financial Times’ Asia news editor, Victor Mallet, had his visa effectively revoked and the pro-independence Hong Kong National party was banned.

The closure follows the disappearance and detention of five city booksellers in 2015, who were linked to the Mighty Current publishing house that produced critical books about China’s leadership.

Joshua Wong, one of the leaders of the 2014 Occupy Movement, told the Guardian the closure “marks the definitive proof of Hong Kong’s lack of freedom”.

Benedict Rogers, co-founder and chair of the NGO Hong Kong Watch, said: “Hong Kong used to be a window onto China, a sanctuary for books that tell the truth about the mainland. But freedom of expression and of the press have been significantly eroded in recent years, and the closure of bookshops selling banned books is a further example of this.”

The former British colony has preserved much of its autonomy since its return to Chinese rule in 1997, including its own laws on liberal publication rights. Several publishing houses and bookshops flourished selling works that a couple of miles away were forbidden, attracting buyers from all over the mainland.

Tang discovered the niche market in 2004 and the boom came right after. “It was a crazy time,” said the bookseller, who attracted mainland customers with a portrait of Mao at the entrance of his shop. “Publishers printed a title after the other, and we were selling a hundred books a day,” he said.

High on the best-seller list of forbidden books were taboo topics such as politics, religion, and sex. From the private life of President Mao to the history of the cultural revolution, mainland customers could leaf through books supporting the 1989 Tiananmen Square movement or essays on the struggles within the Communist party, as well as bluer topics such as oral sex bibles and sadomasochism guides.

When the Chinese government increased its pressure, “the industry experienced a significant turndown and banned book are not published any more,” said Malinda Ye, Acquisition Editor at the Chinese University Press.

“This is a very worrying situation,” said Agnes Chow Ting, social activist and member of the pro-democracy party Demosisto, who was recently banned from running for Hong Kong’s legislative council. “A lot of chained bookstores and book publishers in Hong Kong are controlled by liaison office of the Chinese government,” she said.

The closure of the shop leaves Hong Kong with no outlet that challenges censorship. Albert Cheng, renowned Hong Kong political commentator, said the concern was that “the ‘one country, two systems’ principle will gradually fade, while Hong Kong will become simply another Chinese city.”

The Chinese Liaison Office did not respond to a request for comment.