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Abstract
This article discusses issues that challenged the principles of policy development in the Hong Kong Special Administrative Region (HKSAR) after the transfer of sovereignty. It first examines the traditional paradigms of public administration in Hong Kong and assesses their strengths. Then it analyses the problems and pressures confronted by the new HKSAR government, focusing on eight problem areas and five dilemmas in the two-year period after 1997. Challenges and adjustments in policy principles in the new political setting are identified, and the critical success factors for public administration are re-visited.