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Abstract In the 1970s, as the now compact, mature economies in East and Southeast Asia were industrializing, their governments had claimed that they saw no need for the kind of welfare programmes developed in Western “welfare states”. Notwithstanding this claim, a study of social welfare development in these economies in the last three decades, particularly when Hong Kong is taken as an example, shows that they have gone for universal social welfare, largely as a result of the growing prosperity and the rising expectations of the people. This trend has, however, been reversed since the start of the Asian financial crisis in the latter part of 1997, with the resultant slowing down of the economy, rising unemployment and surging fiscal deficits. Governments of the compact, mature economies in East and Southeast Asia found that they must rethink their social commitments and in order to return to balanced budgets, the former selective approach is now adopted by concentrating social welfare resources on the most needy people. While it is not in dispute that there is a close and positive relationship between industrialization and social welfare, the case of the compact, mature economies in East and Southeast Asia shows that as they are more vulnerable to world economic vicissitudes, the relationship may not be as steady as it has been in the Western industrial states. [ABSTRACT FROM AUTHOR]