In Singapore, wearing the tudung (Muslim headscarf) to public schools is not allowed because, the Singaporean government argues, this will jeopardize Singapore’s racial balance. Wearing the hijab to state schools is also prohibited in France, given secularism as state policy. The Hong Kong government, in contrast, does not ban wearing ethnic/religious clothing to public sector schools, and claims that accommodating diversity is a manifestation of ethnic harmony. Why such difference? This paper examines Hong Kong’s embracing multicultural education as an institutional response, under the threat of student shortage, to the new challenge of neoliberal marketization of education, and argues that this has resulted in empowering ethnic minority students to enjoy a niche of freedom in religious and cultural expressions.