This research explores the understanding of Chinese words (commonly used in normal surroundings) by Hong Kong children aged between 4 and 6 in their surrounding. Children were interviewed and were given thirteen objects which they come across in their daily lives. They were then invited to identify these objects, think of some related words and name their functions. Findings show that there is no significant difference in scores on Chinese words understanding of boys and girls. This indicates that children aged between 4 and 6 in Hong Kong can identify Chinese words in their daily lives and understand their meanings. Many of their parents (72%) and teachers (48%) have taught them these words before. However, not many children (42%) are really willing to guess the meanings and pronunciations of words they do not know. This shows that even children have the ability to read many words, though their awareness of language is not very strong. This may hinder development of their reading ability in the future. On the basis of the major results, this study makes some suggestions on the basis of conclusions of the study.