Well, that wouldn't account for the mainlanders to Hong Kong traffic both in and out. That can't be insubstantial.
The way I see it, if the HK Government has carte blanche right to set its own aviation policy, then it can elect to do this on a case by case basis if it wants to. So, for example, grant rights for JQHK, but deny any applications from the mainland. Of course, the mainland may not like this kind of "discrimination". Plus, if it was going to not grant rights to mainland Chinese carriers, why make one small, insignificant exception for a non-Chinese / non-HK carrier like JQHK?
Although Cantonese continues to be a de facto language of Hong Kong and lingua franca, the rise of the prevalence of Mandarin since 1997 has been rapid.