Hong Kong and Macau, like many other East Asian countries, have been experiencing significant economic hardships as a result of rapid economic restructuring in the last decade, especially after the Asian financial crisis in 1997 and 1998. Without satisfactorily dealing with the consequences resulting from the economic restructuring, ‘deep-seated conflicts’ have driven the governments of Hong Kong and Macau very hard to try to devise new and appropriate measures to tackle these economic and social problems in recent years. Before the 1997 Asian financial crisis, both governments strongly believed rapid economic growth would eventually resolve social and economic problems, particularly when the citizens had primarily relied upon themselves rather than relying on the government’s help in resolving the issues related to their livelihood. However, such a growth-driven economy strategy, together with the ‘productivist welfare regime’ which was typically characterized by attaching heavy weight to economic growth but ignoring the importance of social protection, has been exposed to challenges of rising unemployment and growing poverty (Lin, 2010). Wilding (2008) has rightly raised the question whether the ‘productivist welfare regime’ is still productive in addressing heightened welfare expectations from people and handling social and economic prob-lems resulting from rapid demographic and socio-economic changes in Asia. Moreover, political changes after the handover have also affected the development of welfare policies, as the mantras of ‘Hong Kong people are to run Hong Kong’ and ‘Macau people are to run Macau’ have raised the public expectation for better governance and higher living standards.