For culturally and linguistically diverse children, early second language (L2) development is important for school achievement and social inclusion. These children face challenges in acquiring L2, especially in Hong Kong, where the dominant Chinese language contrasts strongly with their home languages. Studies that compared the language abilities of first language (L1) and L2 students in English-speaking contexts have reported young L2 learners’ disadvantage in using the dominant language in oral language and comprehension at school entry. The findings raise the question of whether L2 learners who fall behind their L1 peers in language abilities will be further disadvantaged, showing a weaker development gradient. This study used the Chinese Character Acquisition Assessment (CCAA) to compare character acquisition of 491 L2 children aged from 3 to 6 years against that of 240 of their L1 peers from Hong Kong kindergartens. The CCAA is comprised of six subtests and assesses children’s abilities to make associations among character written form (orthography), sound, and meaning. Results showed that L2 learners had greater development in meaning and sound associations across class levels, implying that they may first develop oral language related abilities. In addition, results indicate that diverging gaps between L1 and L2 learners’ Chinese character acquisition existed across class levels for the associations involving written character form, but not in regard to associations between character meaning and sound. This study highlights the Chinese learning needs of L2 preschoolers and provides understanding of their abilities in mapping among character written forms, sounds, and meanings. The findings suggest the importance of supporting L2 children’s oral language at earlier stages of Chinese learning, and the need to provide instructional support to compensate for their relative weakness in literacy at school entry.