Over the past 15 years, digital technology has ubiquitously penetrated societies around the world, while e-learning is a key driver of widening participation and knowledge transfer in Chinese higher education. As a vibrant, Chinese society in Asia, Hong Kong's new generation of university students, perhaps digital natives, have been learning with e-learning since their basic education. So far, primary to secondary education has embraced the advantages of e-learning capacity to advance learning of different subject knowledge. E-learning capacity in higher education is yet to be fully examined in Hong Kong. This project reviews the government's policy of Information Technology in Education which has largely been put forward since 1998. The study reported in this paper is the findings of the policy analysis as a qualitative case study of Hong Kong on potential e-learning capacity to be developed in higher education. In respect of the e-learning capacity developed in schools, this study focuses on: 1) the ICT settings in institutional learning environment; 2) the pedagogic responses to e-learning; and 3) the potential use of e-learning for learning. The findings will inform university senior management, enabling them to effectively enhance institutional e-learning capacity for effective learning and teaching and new knowledge acquisition. Policymakers will be aware of potential development of e-learning capacity for the preparation of future talents for new opportunities in the twenty-first century.