Examines the extent to which social policy adopted by the colonial government in Hong Kong (prior to its hand‐over China in 1997) has set the agenda for the government of the newly formed Special Administrative Region (SAR). Chronicles the historical development of social policy in Hong Kong since the inception of the colonial government in 1842; identifies that, with the exception of a short‐lived period of expansionism (stimulated by social unrest in the mid‐1960’s) social welfare provision appears to have been low on the government’s agenda and incremental in nature ‐ the emphasis being on economic growth, rather than public spending on welfare programmes. Examines the strengths and weaknesses of this incremental approach; outlines the commitment of the SAR government to the market economy and its proposals for a modest increase in welfare provision, essentially building on the legacy left behind by the colonial government.