Why did China impose the new national security law on Hong Kong now?

My guess:

The CCP fear that their grasp is slipping. They struggle keeping people's minds captive now that information is harder to contain and control.

There's a reason why photos from 1989 of the unarmed man facing down a column of armored tanks in Tiananmen square are banned.

Any dissent is seen as a grave danger to their one-party authoritarian state. It is swiftly beaten down to firmly "discourage" critical views in fear of "infecting" people with a notion of freedom.

Citizens of Hong Kong enjoyed many freedoms denied the rest of the Chinese people. Like freedom of expression. Freedom to criticize the CCP. etc.

Then this law went into effect, and now masses of protesters get arrested for wanting the right to speak their mind freely.

To add to bytebuster's answer, it seems that even China scholars fail to see a specific reason for timing, besides the obvious taking advantage of the pandemic crisis.

The CCP surely knew there would be repercussions of the likes of US removing special status to Hong Kong, but the current situation might allow Chinese government and businesses to compensate for the outflow of capital in HKSE and markets in general. Only time will tell, but it seems to work thus far .

This question comes from an assumption that Chinese government acts on its own free will, "not needing anyone's permission".

In fact, China is (and was, one year ago, and will be, 27 years after today) bound by its Constitutional principle colloquially known as "One country, two systems" introduced by Deng Xiaoping.
This principle is based on the internationally-acknowledged agreement signed as part of The transfer of sovereignty over Hong Kong back in 1997 and is valid till 2047.

The newly introduced National Security Law contradicts provisions of this constitutional principle:

China’s decision to impose the new national security law on Hong Kong lies in direct conflict with its international obligations under the principles of the legally-binding, UN-registered Sino-British Joint Declaration. The proposed law would undermine the One Country, Two Systems framework.
— Joint statement from UK Foreign Secretary Dominic Raab, Australian Foreign Minister Marise Payne, Canadian Foreign Minister François-Philippe Champagne, and US Secretary of State Michael Pompeo.

It is not publicly known why exactly China chose to obey its Constitutional principle before and broke it only this time, so the rest of the question will probably remain unanswered unless some official statement is released.