The British colonial government took the development of higher education in Hong Kong very seriously. Today, the government of the Special Administrative Region of the People's Republic of China (HKSAR) does likewise. However, there are many differences in the sector before and after 1997. A great deal has been written about the spectacular growth of this sector during the final years of colonial rule, but little has been written on the efforts to reposition it in the face of changing social and economic conditions after 1997. 2 Thus, this article aims to discuss and account for the current state of higher education in Hong Kong, and to examine the implications of major issues raised in Higher Education in Hong Kong: Report of the University Grants Committee.