One year after the establishment of the University in 1912, the Faculty of Arts with two Chinese Hanlin 翰林 scholars lecturing on Chinese was set up. In 1927, with generous endowments from overseas Chinese in the Straits Settlements and Federated Malay States, the Chinese Department was formally established. Dr. Lai Tsi-hsi 賴際熙太史 was appointed Reader and became the Head of the Department, which was also known as the Institute of Chinese Studies.

The Chinese Department began in a small way, but with the help of the Government and private personages in Hong Kong, its curriculum was gradually expanded and its teaching staff strengthened. At first, the Department was without its own building and library because of lack of funds. In 1927, a sum of ten thousand dollars from the funds contributed by overseas Chinese was used to buy Chinese books. The library thereby established was named Chen Yung Library 振永書藏 in memory of Chan Wing 陳永 from the Strait Settlements who had contributed twenty thousand dollars. In 1931, Mr. Tang Chi Ngong 鄧志昂, a local philanthropist, contributed a building for the promotion of Chinese studies known as the Tang Chi Ngong School of Chinese 鄧志昂中文學院. In 1932, Mr. Fung Ping Shan 馮平山, father of Sir Kenneth Fung Ping-fun 馮秉芬, contributed a building for use as Chinese Library and has since been known as the Fung Ping Shan Library 馮平山圖書館. The number of books steadily increased, and this has benefited not only the teaching staff and students of the University but also the public as well.

In 1935, Professor Hsu Ti-shan 許地山 from the Yenching University, Beijing, was appointed the Foundation Professor of Chinese. At that time, the curriculum consisted of Chinese literature, Chinese history and Chinese philosophy. Professor Hsu passed away in 1941 and Professor Chen Yin Ko 陳寅恪 was invited to take over the vacant chair, which he held for only a very short time. In 1945, Mr. Ma Chien 馬鑑 was appointed Professor of Chinese and remained in that capacity until his retirement in 1950. Professor J.K. Rideout from the University of Sydney took over the mantle. In 1952, he was succeeded by Professor F.S. Drake from Chee-loo University 齊魯大學, who was appointed Professor of Chinese. From 1966 onwards, the Chair's occupants included Professor Lo Hsiang-lin 羅香林, Professor Ma Meng 馬蒙, Professor Ho Peng Yoke 何丙郁 and Professor Chiu Ling Yeong 趙令揚. Professor Sin Chow Yiu 單周堯, successor to Professor Chiu, has been Head of the Department since 1998.

In 2006, the Chinese Department was renamed the School of Chinese consequent on the restructuring of the Faculty of Arts.

Sir Charles Eliot, the first Vice-Chancellor of the University, who himself was a noted scholar of Oriental studies, was the first to envision that the University would play an important role in the development of Oriental studies and related subjects. Later, Sir Cecil Clementi 金文泰, Governor of Hong Kong and Chancellor of the University, in his address to the Royal Empire Society in London towards the end of 1935, said,

It is clear that those who attach great importance to the University's development have placed high priority on the study of Chinese since its inception. Our mission is to ensure that the School of Chinese will continue to play an important role in promoting Chinese studies at home and abroad.