Hong Kong has signaled its intention to develop itself as a regional education hub for a decade. However, the policy is being criticized because Hong Kong has neither diversified its student population ethnically and culturally nor expanded its share in the global higher education market. This chapter explores the significance of the education hub concept in the development of higher education in Hong Kong. It begins with a brief examination of the existing approach to the concept of education hub and internationalization of higher education. It then looks into the main initiatives made by the Hong Kong government to implement its education hub strategy. This is followed by a critical examination of the effects of the hub strategy with a focus on the tensions between Hong Kong and mainland China. It also explores the special status of Hong Kong’s higher education sector in China under the “one country, two systems” constitutional framework. The chapter concludes by arguing that a capitalist and instrumentalist interpretation of internationalization of higher education is not a sufficient condition to underpin an effective education hub notion. Instead, it sees cosmopolitanism as a better ideological rationale for the development of internationalization of higher education in the city.[Copyright © 2016 Springer Science+Business Media Singapore.]