Hong Kong's economic fortunes have always depended on trade with China. By the mid-1980s, the colonial higher education system was catering to only 6% of the 18-20 age cohort and there was a backlog of adult learners who had been denied access. The Open Learning Institute of Hong Kong was launched in 1989 to overwhelming public response. It established distance education as a viable and respectable delivery mode in the territory and gained university status in 1997. Since 2001, however, the Open University of Hong Kong (OUHK) has lost market share to local and international competitors and has had to diversify to survive. In 1997, Hong Kong became a Special Administrative Region (HKSAR) of the People's Republic of China (PRC) and the OUHK has been working to demonstrate how its adapted model of supported distance education can meet the challenge of providing accessible, cost-effective, and flexible learning opportunities to enhance economic and social development in the PRC. (Contains 1 table.)