The total fertility in Hong Kong SAR fell continuously below replacement in the past two decades and reached a level of 0.98 in 1998. The rate in 1981 was close to replacement at 1.93. In this paper the theoretical outcomes of long-lasting below-replacement fertility are identified with a view to gaining some analytical insight into the situation, where the population is experiencing such a striking demographic trend. In the absence of migration, Hong Kong SAR will see its population start to decline between 2008 and 2038, if the future course of fertility falls within these 'bounds'. Concurrently, the aging of population will be reaching unprecedented proportions. Should fertility remain at the present below-replacement level, i.e. the worse-case scenario, the proportion of population aged 65 years or older would increase to 44 per cent, and those aged under 15 years would decrease to six per cent, by 2048. As a result, the potential labour supply (those aged 15-64 years) would dwindle to only 50 per cent of the population, suggesting that there would be less than one person potentially working to support one dependent (who is likely to be a person aged 65 years or older). The socio-economic consequences of population aging are discussed. By analysing net immigration in the demographic process in the past, the way in which replacement migration would help alleviate the problem of population decline and population aging is also discussed.