China resumed sovereignty over Hong Kong on I July, 1997. After being a British\ud colony for more than 150 years, Hong Kong became a Special Administrative Region\ud of China following the "one country, two systems" policy. This dissertation is\ud concerned with the examination of the market changes in Hong Kong's university\ud distance education in the transition period.\ud Information about respondents' demographics, evaluation and intention to pursue\ud further study through distance education programmes was collected by sending\ud questionnaires to two types of subject: current students using distance education\ud programmes and potential adult students in Hong Kong. A total of five groups were\ud identified as representing the first type of subject: students of the Henley Management\ud College/Brunel University (UK) - MBA programme, the Curtin University of\ud Technology - Bachelor of Commerce and Master of Accounting programme\ud (Australia), and the Open University of Hong Kong - Bachelor of Business\ud Administration and MBA programmes. The second type of subject comprised Hong\ud Kong adults who were interested in studying via distance education programmes. One\ud group of subjects were visitors to the Hong Kong Education Expo 1996, and they\ud were classified as potential students who wished to study in distance education\ud programmes in Hong Kong.\ud All the data were processed using the Statistical Package for Social Science software\ud programme. The research questions were tackled by the resultant data and analysis.\ud The important findings obtained from the subjects are:\ud a) The need for higher-degree-level programmes is very great among Hong Kong's\ud distance learners. The decision to undertake further study to distance Master\ud degree level after completing a distance Bachelor degree aptly demonstrates this\ud situation. Consideration should, therefore, be given to developing distance Master\ud degree programmes for students currently studying distance Bachelor degree\ud programmes, and distance Doctorate degree programmes for students currently\ud studying distance Master degree programmes. The majority of distance students,\ud particularly at the higher-degree-level, tend to be in the higher-income bracket.\ud b) Hong Kong adults who are interested in distance education programmes come\ud from different occupation segments. Their choice of further study varies according\ud to their needs and occupations. Consideration should be given to repositioning the\ud current distance education programmes, particularly at Bachelor's degree or\ud Diploma level. In addition, a segment comprising housewives has been identified\ud as potential students for Bachelor's degree programmes by this study.\ud In the further discussion about Hong Kong during the transition period, Fägerlind and\ud Saha's Dialectical Model is used to examine the development of Hong Kong's higher\ud education system with three important dimensions: political, economic and social\ud forces. Finally, this analysis provides three possible alternatives of development for\ud the integration of Hong Kong's and China's higher education systems in the post-transition\ud period: "One Country, One System", "One Country, Two Systems", and\ud "One Country, Many Systems"