Executive Summary

In 1977-78, the Chinese government made a conscious effort to shift its attention to constructing itself economically, implementing a policy of reform, and opening up to the outside world.  The goal of this national program was to transform China into a powerful nation with modernized agriculture, industry, science, technology and defense (Lianqing, 1996).  To correspond with this shift in focus, the nation’s leaders began a major reworking of the country’s higher education infrastructure.  Beginning in 1977, it passed a series of legislative acts with the intent of expanding, increasing quality, and increasing accessibility to its higher education system. Continued enhancement of its higher education system has played a leading role in its emergence as a key player in the global marketplace. In order to move from a 11.2% participation rate of traditional college age (18-25) individuals in higher education to a 15% rate in 2005 (Ross & Lou, 2005) and a target of a 45% rate by 2020 (Whitman, 2004), China will have to continue to aggressively focus on higher education reform.

This paper identifies some of the major legislation that has been enacted since 1977 to support reform of the higher education infrastructure.  It looks at the initiatives and legislation that have been enacted within the context of some current trends in higher education, such as: the emergence of Chinese “Multiversities;” the creation of a binary education system; universities as engines of development; the emergence of private higher education providers; the impact of western-style educational techniques, and; the role of the government in the future of higher education. The paper recognizes that enhancement of China’s higher education system needs to continue.  It proposes a vision for higher education in the next ten years and beyond.  This vision includes increased types of higher educational institutions, modification of teaching methods and introduction of international faculty, continued progress on the “211” and “985” initiatives, creating entrepreneurialism in targeted higher education institutions, increased partnerships between education and industry, and continued diversification of funding streams.  The paper concludes with implications of these changes in the Chinese higher education system on the American higher education system.

Government Initiatives and Higher Education Legislation Since 1977

The legislative trajectory in China’s higher education system is characterized by a move from “state control” to “state supervision.” (Neave & van Vught, 1994) The higher education was implicitly assigned an instrumental role in supporting the aggressive economic goals that were set for the country.  Legislation to support higher education in its role had to recognize that changes would need to be made in an increased environment of international competition, financial constraints, increasing requirements from society, political ideology, patriotism, and traditions (Cai, 2004).

One of the first changes in higher education after the end of the Cultural Revolution was the restoration of the national unified college entrance exams in 1977.  In addition, two major pieces of legislation were passed in 1977 (Surowski, 2000).  The first piece of legislation was the “Decision on Unifying Management in the Higher Education System.”  It called for the setting of academic standards, and empowered the Ministry of Education as the final authority and facilitator. The second was the “Sixty Articles of Higher Education.” This legislation was a resolution that higher education institutions were to train the experts needed for socialist construction, and that the instructors should be relatively unencumbered by political constraints as provided education.  For the first time since Communist rule in China, the State loosened its control over the pedagogy that was being delivered in the higher education classroom.

In 1978, the Chinese government decided to shift its focus of attention to economic construction.  It began implementing a policy of reform driven by the spirit of opening up to the outside world in a way that would convert China by the end of this century into a powerful nation.  The policies focused on modernizing agriculture, industry, science, technology and defense – what have generally become known to be the “Four Modernizations” (Lianqing, 1996).

The 1985 “Decision of the Central Committee of the Chinese Communist Party on the Reform of the Education System” reformulated earlier decrees and became the guiding document of reform, not only for higher education, but for all levels of education during the post-Mao years (Dong-chang, 1987).  While it generally devolved ownership of all aspects of managing education to local communities, it called for the central state to retain the charter to establish the necessary framework for higher education to meet technological and professional knowledge required to allow China to modernize.  Among the specifics of this comprehensive legislation, it called to continue to support the Four Modernizations, to increase state funding for education, to insure that the education system supply a sufficient number of highly qualified personnel to support the growth of the economy, to institute a 9-year compulsory education policy, to expand the system of technical and vocational education schools, to change the system of job-assignments to graduates, to grant the colleges and universities more decision-making powers, and to strengthen educational leadership by establishing a State Education Commission (SEC) - roughly equivalent to that of the State Economic Commission - which had a higher status than the previous Ministry of Education and establishing the president of a college or university as the chief executive officer of the unit.

Two pieces of legislation were enacted in 1993 that impacted the direction and delivery of higher education (Lianqing, 1996).  The “Mission Outline for Education Reform and Development in China” reaffirmed decentralization and actively supported social institutions and citizens to establish schools according to laws and to provide right guidelines and to strengthen administration. It called for the diversification of financial resources, less administrative interference, termination of graduates’ job assignments and growth of private institutions. The “Provisional Regulations on the Establishment of Private Universities and Colleges” were a series of regulations that worked in unison with the “Mission” and represented an effective measure for breaking the former single pattern of governmental management of institutions of higher education and encouraged non-governmental organizations and individuals to invest in higher education.

1995 represented the next major stage in higher education reform.  Once again, the government felt it was necessary to consolidate the legislation that had been enacted in the years leading up to 1995.  The National People's Congress passed the “Education Law of the People's Republic of China” which codified many of the previous policies and decrees, especially those of 1985 ("Education Law of the People's Republic of China", 1995).  In addition, the “211” plan was inaugurated (Ross & Lou, 2005).  This ambitious program consolidated government resources to groom the one hundred 100 most prestigious institutions in China to form the core of their higher education system.  The plan called for creating distinguished chairs that would be paid increased salaries and the establishment of high-tech parks and research grants to promote scholarship.

1998 saw a number of initiatives to strengthen China’s higher education system.  First, the “211” plan was expanded.  Building in its success, the “985” plan was introduced as a further expansion of the “211” plan to provide assistance to a broader group of institutions for projects in higher education, but with more emphasis on the second tier of quality institutions (Whitman, 2004).  To achieve that goal, the government promised to increase the educational allocation in the national budget by 1 percent a year for each of the five years following 1998 (Duan, 2003).  Second, the “Higher Education Law” was passed to reaffirm that education was meant to serve social needs ("Higher Education Law of the People's Republic of China", 1998).  It called for more diversified modes of educational services and allowed far more flexibility for provincial and local governments to run education in their jurisdictions. Third, and complementing the “Higher Education Law,” the government passed the “Action Plan to Revitalize Education into the 21^st Century.” This legislation recognized needs of lifelong learning, encouraged every sector in society to create educational opportunities, and endorsed private, people-run institutions, called “min ban.” Another major aspect of this legislation was that control was granted at the local institution level.

Rationalization of institutions and disciplines was also a major theme in 1998. The government initiated a major program of consolidation to merge many of the single discipline colleges and universities that had been set up in the early 1950s along the Soviet model of single discipline institutions. Official government statistics show that between 1996 and 2000, 387 colleges and universities were merged and/or combined into 212 institutions.  With these university mergers, by 2001 the Ministry of Education had reduced from about two hundred to around seventy the number of institutions it operated (Ross & Lou, 2005).  Additionally, work that was begun in 1997 to rationalize the number of recognized disciplines of study in higher education was completed.  The number of disciplines available for study in the “discipline catalog” was reduced from 504 to 249 ("Higher Education In China", 2005).

1999 ushered in reforms which built upon the major reforms inaugurated in 1998.  The “Plan to Build up Key National Bases in Humanities and Social Sciences Research in Regular Higher Educational Institutions” identified 100 leading research institutions to create multi-disciplinary programs to study some of China’s most pressing social needs ("Higher Education In China", 2005). The "Action Plan to Vitalize Education in the 21st Century" report issued by the Ministry of Education called for a participation rate in higher education by the year 2020 to be 45% of college age individuals (Yang, 2002).  Additionally, some of the reforms passed promoted quality-oriented education aimed at improving the creativity of students and emphasizing the power of competition.

2002 marked the year that the government once again turned their attention to the growing body of private, people-run institutions – min ban - that had started to emerge in the prior ten years.  The last time the government had focused their attention on the min ban was in 1998 with the “Action Plan to Revitalize Education into the 21^st Century.”  Although min ban universities and schools received no state subsidies and were not eligible for research funding, they had been provided with royalty-free land use and tax exemption (Whitman, 2004). “The Law on the Promotion of Non-State Schools” was issued in 2002 and represented China’ first major private education law.  The intent of this legislation was to clarify the rights and responsibilities of non-state institutions.  The government higher education agencies needed to start focusing on these schools as they had now begun to create an element of competition to the public institutions.  This represented an opportunity to the higher education student population, as some of the programs that these private institutions offered were innovative and more market relevant but also represented the opportunity, if left unchecked, to offer substandard programs. In 2002, there were 133 min bans accredited by the Chinese government that enrolled 320K.  There were an additional 1,200 institutions that were unaccredited that had enrollments representing over 1.4M students (Ross & Lou, 2005).

The demand for higher education in China captured the interest of higher education institutions from countries all over the world.  Many foreign schools and for-profit companies began to develop joint-venture and stand-alone operations to offer higher education in China.  The Chinese government saw the need to establish rules to protect their citizenry, the established public higher education institutions, and the foreign institutions entering the country.  They passed the “Regulations of the People's Republic of China on Chinese-Foreign Cooperation in Running Schools for Chinese-Foreign Cooperation in Running Schools” in 2003.  The purpose of this legislation was to adopt the policies of opening wider to the outside world, standardizing the running of schools, exercising administration according to law, and promoting development of foreign and domestic-foreign joint ventures ("Regulations of the People's Republic of China on Chinese-Foreign Cooperation in Running Schools", 2003).

Legislation in the Context of Higher Education Trends

Legislation that have been enacted within the context of some current trends in higher education, such as: the emergence of Chinese “Multiversities;” the creation of a binary education system; universities as engines of development; the emergence of private higher education providers; the impact of western-style educational techniques, and; the role of the government in the future of higher education.

From University to Multiversity

Higher education institutions in China from the onset of Communism in 1949 through the Cultural Revolution were more like the original concept of the university – a cloistered community of masters and students (Kerr, 1963).  All decisions were made centrally and the institutions were kept very much under the direct control of the Ministry of Education (MOE).  Beginning in the late 1970’s, the momentum of higher education shifted towards decentralization.  Rather than all universities continuing to be directly controlled by the Communist Party of China (CPC), the MOE identified three kinds of higher education institutions: state (i.e., federal), provincial, and city (Billington & Li, 2000).  Kerr recognized the roles of many constituencies in a multiversity but singled out the president as the key driver of the multiversity (Kerr, 1963).

Whereas the multiversity president in an American institution has one governing system and within that one governing system must play equally to many constituencies, the multiversity president in a Chinese university has dual governing systems to accommodate.  The multiversity president operates within the administrative governing system (the governing system akin to an American University in which s/he takes on the role of which Kerr speaks) as well as the political governing system whereby s/he is responsible solely to the Party Secretary of the University Party Committee.  This political layer is overlaid to make sure all aspects of the university are run in alignment with CPC mandates (Billington & Li, 2000).  Similarly, there is a dual governance structure for the university dean’s and department heads who report to the university president in a Chinese University, although the roles of the parallel CPC functionary for deans and department heads are much less diminished than their counterpart at the level of the university president (Billington & Li, 2000).

The course of legislation continued to move power away from the centralized governmental body into the hands of the institution’s president, deans and department heads.  The legislation provided more and more autonomy to set curriculum, determine funding, and select a student population.

Establishment of a Trinary Educational System

Many countries outside of China have been experimenting with binary education systems (i.e., two competing paths for academic and professional studies).  In the 1980’s, Australia and the United Kingdom consciously moved away a binary system of higher education structure because they had become obstacles to progress in both countries (Williams, 1992).  This was due to a variety of reasons: increased retention rates in secondary schools which provided more entrants to higher education; dependence on government grants to fund higher education (albeit unequally between types of institutions); disparity in research objectives between the government and higher education institutions, and; increased academic strength of polytechnics in the UK and institutes of technology in Australia (Williams, 1992).

In China, however, with the movement towards decentralization, a three-tiered (i.e., trinary) system emerged.  In the first tier are the National Key Universities which are directly run by the MOE.  As of 1995, the 36 National Key Universities represent approximately 12.7% of higher education enrollments.  The second tier consists of 316 universities and colleges under the various ministries of the Central Government.  They are controlled by both the Education Commission and the Ministries concerned (but mainly by the latter) and represent 31.3% of higher education enrollments.  The third tier consists of 723 institutions.  They are mainly controlled by local governments – provincial or municipal – and represent 56% of higher education enrollments (Lianqing, 1996). 

This movement to a trinary system was able to occur because unlike in the UK and Australia, where one of the drivers for disassembling the binary system was the government’s movement towards more universal underwriting of higher education, the movement towards decentralization in China explicitly called for more self-funded education. The CPC encouraged University’s to seek additional funding through income generating activities - research contracts, donations, and other kinds of industry outreach (Mok, 2002).

Universities as Engines of Development

Universities can be seen to represent dynamic systems of contradictory functions (Castells, 1994).  At the same time, universities provide generation and transmission of ideology, serve as a selection mechanism for the formation of dominant elites, produce and apply knowledge, and train the skilled work force(Castells, 1994).  This phenomenon is now starting to appear in China.

Under the old system of centralized control, there was limited access to free higher education. Chinese university students were willing to take whatever jobs the government assigned to them upon graduation and all graduates received the same salary (Duan, 2003). There is now a tradeoff between access to higher education and guaranteed employment.  While only 8% of high school graduates enrolled in colleges and universities before 1998, as many as 19% are enrolling today (Craft, 2005) under a more liberal enrollment environment.  With increased enrollment, however, the system faces the potential for stagnation and potential unrest as the higher education system is now producing millions of graduates who cannot find jobs or find jobs for which they are overqualified (Delaney, 2005a).

There is also the tendency of a developing country to focus its efforts on engineering, science, and technology (Castells, 1994).  This is true in China; in no other society does the engineering discipline so thoroughly dominate the public and private realms as it does in China. President Jian Zemin and every member of the nine person central committee are engineers by profession, as are hundreds of other influential political and industry leaders (Craft, 2005).

The Introduction of New Education Providers

Decentralization has also given rise to “new scenes in the landscape of higher education.” (Mendivil, 2002) Most particularly, there has been an emergence of private educational providers.  By 2001, eighty-nine private institutions of higher education had been accredited by the MOE (Duan, 2003) and in 2002, that number increased to 133 (Ross & Lou, 2005).  A recent report also indicated that a draft on the promotion of nongovernmental education has been submitted for deliberation to the Standing Committee of the CPC (Duan, 2003). The draft states that private schools should enjoy the same rights as public ones.  Experts of the Chinese higher education system predict that this law will serve to enhance private higher education.  In 2002, it was estimated that private universities educated 1.72 million of the 10.4 million students enrolled in the regular higher education sector (Ross & Lou, 2005)  Although more students are seeking education outside of government institutions, this option is usually available to only middle class families, as the tuition’s charged are higher than those charged by the three tiers of public institutions.

The Role of Government in the Future of Higher Education

In a major government report presented by the Secretary of State for Education and Skills in Great Britain in 2003 ("The future of higher education, a white paper", 2003), three major areas for university improvement were identified: (1) the expansion of higher education had to more equally address students from all backgrounds; (2) knowledge had to be more closely related to wealth creation, and; (3) the system for supporting students’ education had to be more fair. Development of higher education in China can be seen to share the second imperative of this Report, but diverges as it relates to the first and third areas identified in this report.  This is related to the differences in the stage of maturity for higher education systems between Britain and China - 43 per cent of 18–30 year olds in England enter higher education ("The future of higher education, a white paper", 2003) compared with only 19% in China (Craft, 2005).

Both China and Britain share the goal that knowledge has to be more closely related to wealth creation (area 2 of the British report).  This was made manifest in the late 1970’s when the Chinese higher education system began its renaissance in support of the stated goal to construct itself economically within the global sphere. However, while there has been increased access to higher education through the promulgation of government and private institutions, there does not appear to be any stated policy that access needs to be provided to students from all backgrounds (area 1 of the British report). 

While 52 percent of the 5.27 million Chinese university candidates who took National College Entrance Examination in 2002 compared to 2.4% in 1981 (Duan, 2003), this relies more on the fact that there are now more educational options.  It is not because the government is making sure that there is equality in placements into higher education institutions.  As it relates to the system for supporting students’ education being fair (area 3 of the report), the Chinese government has actually moved away from the tenets of equality and fairness and into more of a free-market model, whereby individuals are now required to fund their education through tuition payments while institutions have been mandated to develop their own funding streams and become less reliant on government underwriting(Mok, 2002).  In addition, a working group for the country’s tenth Five Year Plan for national education found that China’s city and town dwellers are significantly better educated than the rural population (Delaney, 2005b).  The government is not taking action to address this.

Vision for Future

There was an unprecedented expansion in opportunities for higher education in China since 1977.  With it, however, have come some major questions of policy and practice, such as how to balance expansion and quality, how to properly share administrative authority, how to regulate private initiatives, and what is fair and feasible in the sharing of cost between government, institutions, individuals and other organizations.

The path of higher education trends in China recognize developments that are specific to the development mission that the Chinese government has established for its higher education infrastructure as well as trends that are occurring in higher education outside of China.  In some senses, it is easier for China to affect changes because it is not held captive to an entrenched legacy higher education system.  In other senses, it is more difficult because the gap is so large between where the system is now and where the government feels it needs to take it.  A number of challenges and opportunities lie ahead.

Institutional Diversity

China needs to continue to increase the number of types of higher education models it currently has in its higher education portfolio, what Jorge L. I.  Mendivil calls “new providers of higher education.” (Mendivil, 2002) This speaks to both institutional type and institutional ownership.  Currently, the large majority of higher education students in China are enrolled in the approximate 111 state run universities, 1114 provincial/municipal and 100 private universities, colleges and vocational schools (Whitman, 2004).  In order to achieve goals established for college age participation, China needs to not only increase the number of these types of institutions, but it also needs to recognize alternative higher education models. Institutions such as junior colleges, online and distance learning institutions, corporate universities, continuing education institutions, and executive education programs need to be added to the portfolio of higher education options available to students. 

For example, adding two year associates degree to the existing academic system that now offers mostly Bachelor's, Master's, and Doctoral degrees would more closely reflect global educational standards and enhance adult education, continuing education, and vocational education.  In addition, business would welcome these graduates who would become secretaries, technicians, nurses, or professionals in various fields. These graduates would be welcome particularly in rural areas.  In order to insert this layer into the higher education infrastructure, a transfer system needs to be created to help transfer these associate's degrees to bachelor's programs at the university level. Strategically, a system consisting of two- to three-year colleges and four-year universities that offered degrees ranging from associate's to doctoral degrees would help integrate the Chinese colleges and universities and greatly increase access to higher education (Duan, 2003).

The number of private institutions also needs to increase.  These institution’s can serve to meet the needs of students who fail to attain the prestigious seats in the public education system, provide “hot skills” that students desire, meet parents’ expectations to give their children a privileged position among the increasing number of students entering the higher education system, provide rural parents a less expensive alternative to compulsory public schools, and meet the increasing inability (or unwillingness) of the state to pay for quality education.  As noted above, of the approximately 1400 min ban, only 133 were accredited as of 2002 (Whitman, 2004).  While the government did address the issue of min ban with the “Law on the Promotion of Non-State Schools,” few have been willing to risk establishing min ban because of the uncertainty around accreditation.  One of the major complaints potential operators of min ban have is that the government legislation has made it easier for public institutions to establish second-tier private schools (Whitman, 2004).  While the participation of the non-state min ban will continue to increase, if this sector is really to make a significant impact in providing alternatives to the public sector, the government has to make the environment more open.

Modification of Teaching Methods

The Chinese higher education system has relied upon teaching methods grounded in rote and memorization through much of its educational history.  These methods are particularly useful in a totalitarian state where political ideology plays such an important role.  However, these teaching methods do not prepare graduates to compete in both an internally tight labor market and an externally global economy. 

A vision of teaching methods will move China’s higher education system away from the classic lecture-dominated model.  Lecture-dominated teaching methods and passive learning environments are inadequate to achieve China’s current higher education development objectives. A more modern andragogy needs to be adapted.  This is particularly the case when the learning objectives of today’s higher education go beyond fulfilling the immediate career ambitions of the students and the competence requirements of the employers. In addition to teaching theory, higher education must also attempt to teach and develop the students’ ethical values, self-learning capacities, and competencies around innovation. (Ross & Lou, 2005)

Some of the new androgogies that need to be adopted are case study methodology, small group learning, experiential learning exercises, asynchronous learning through online or distance learning, reflective journaling, and recognition of different learning styles.  Expanding upon simple rote memorization needs to be an integral part of the vision for China’s higher education future.

Challenges of Massification

Any vision for China’s future has to balance the goal of massification – increased access to higher education for all students – with commitment to the political, economic, social, and cultural vision for the country (Cai, 2004).  China has made a commitment to have 45% of its college age students in some form of a higher education institute by 2020 (Whitman, 2004).  They have made significant progress in this area.  Enrollments of 16M students in higher education represents two and a half times the enrollments of 1997 (Ross & Lou, 2005).  Some of the reasons attributable for this increase include better feeder schools, increased options (including min ban), wider distribution of governmental funds, and increased support from parents who want to have their children have more opportunity and get better jobs.

From an economic perspective, the higher education system needs to sustain and stimulate national economic development by training highly qualified citizens and by providing innovation in science and technology.  However, there may be some problems with private universities in that they may pursue “hot” majors and thus become one dimensional, and not really true universities.  From a political perspective, growth in higher education must make sure that it creates citizens with both a sense of strong national identity and world perspective.  From a cultural perspective, higher education must engage its student-citizens in the knowledge of its civilization and of humanity to identify what is worth knowing.  Currently, this is being highly conflicted between global and local as communications technology allows Chinese students see what their peers in other countries have attained.  Higher education needs to integrate future political elites into current political system, thus ensuring its future.  Lastly, from a social perspective, the vision of higher education needs to make sure that - to quote Andrew Carnegie – it “create ladders upon which the aspiring can rise.” (Ross & Lou, 2005) Although access to higher education has increased, Chinese society has become less equal. Between 1978 and 2002, the GINI coefficient ("GINI Coefficient", 2006) – where 0 indicates perfect equality (where everyone has the same income) and 1 (where one person has all the income, and everyone else has zero income) – has moved from a farily equal distributio index of .18 to a much unequal distribution of .51 (Ross & Lou, 2005).  This places China in the bottom third of the world’s population.

Administrative Infrastructure

A vision of China’s higher education needs to look at reforming the internal administrative mechanisms of colleges and universities and reforming the enrolment system. A dual administrative system of higher education needs to be established. That is, both the Central Government and governments at the provincial level will need to have jurisdiction over, and take responsibility for, higher education. Some key universities will be financed and developed by the Central Government, some by both the Central Government and local governments, and some by local governments alone. While movement has been made in this area, there is still much progress to be made (Lianqing, 1996).

The unified enrolment system administered by the Central Government should also be replaced by a new one, with co-ordination between the state, local governments and institutions of higher education. Under the proposed system, apart from the National College Entrance Examination, local examinations need to be held for high school graduates. Universities and colleges need to be able to enroll college applicants independently.

Continued Progress on the “211” and “985” Initiatives

China’s two focused initiatives – the “211” and “985” initiatives - to build world class competence in its higher education system need to be continued and expanded.  In 2004, China’s education budget amounted to a relatively low 3.41% of GNP, compared to and OECD average of 5.8% of GDP (Whitman, 2004).  Enhancing these programs need to be an important part of China’s higher education vision. 

Similar programs have been employed in the United States through the issuance of research grants from the federal government.  The government does not try to distribute research funding based on an equal distribution across a number of higher education institutions, but rather to where the expertise lies.  As a result, a small number of institutions are the beneficiaries of a large percentage of these grant monies.  This focus of research money in turn causes these institutions to become centers of excellence in their particular fields, thus attracting the highest quality researchers and students.

Creating Entrepreneurialism in Targeted Higher Education Institutions

China needs to continue to encourage its higher education institutions to be entrepreneurial, a popular trend in higher education. A popular model for transforming universities combines many elements to create a truly entrepreneurial institution (Clark, 1998).  The first element of this entrepreneurial model is to create what is called a strengthened steering core (the core mission of the university).  Building upon this core, an institution can then take on more progressive, and potentially riskier, joint ventures with either private business or other institutions to provide for an expanded development periphery.  This will then help to develop a diversified funding base.  These three elements, in combination, will create an integrated entrepreneurial culture.

In order to embrace globalization, China’s higher education institutions need to reach out to industry.  A higher education vision needs to recognize the strength of combined research rigor (as found in the university environment) and the realities of an external market (as found in industry).  Faced with constant changes in the social, economic and political environments, higher education needs to be more proactive in its direction, balancing the need to adapt to the continuous changing requirements of professional competencies, to maintain academic/scientific rigor in research, to keep pace with the scientific developments of the world, and to serve the nation’s political and social objectives (Whitman, 2004).

Just as many entrepreneurial higher education institutions in Europe had discovered (i.e., Warwick, Twente, Strathclyde, Chalmers, and Joensuu), establishing relationships with industry can provide an environment to focus research in specific areas and perpetuate their relevance within the educational and economic landscape (Clark, 1998).  The combined academic focus on basic research with the private sector focus of applied research can strengthen the universities’ position as a provider of economic and social benefit.  China needs to identify universities that can follow the lead of these entrepreneurial European universities.  In addition to serving the nation’s political, economic, and social objectives, this strategy will attract an international faculty that will bring in new ideas, increase the credibility of China’s higher education system, and potentially introduce new teaching androgogies.  Focus in areas such as engineering and science, while important, should not be the sole area of focus in these endeavors.

Diversification of Funding Streams

China’s education budget amounted to a relatively low 3.41% of GNP, compared to and OECD average of 5.8% of GDP (Whitman, 2004).  As recently as 1997, government support provided for approximately 51% of costs of higher education (Whitman, 2004).  If China is to expand its higher education infrastructure to accommodate 45% of college age students by 2020, it will have to expand both its GDP percentage contribution for higher education and expand its funding base.  While it is unreasonable to expect that all higher education institutions will be provided the same opportunities to expand their funding bases, the top universities will need to.  Top Universities will need to secure significant additional income from other sources including: non-degree programs; research projects; technology transfer; facilities rental; consultancies and other services, and; gifts and endowments.  These are all strategies that were employed (in different degrees) by the entrepreneurial universities in Europe (Clark, 1998). 

Student contribution also needs to be addressed.  Currently, tuition is now only charged in undergraduate institutions.  It can represent up to 20% of total costs.  Graduate programs, however, are fully funded.  In order to accommodate this, admittance to graduate programs are highly selective (Whitman, 2004).  Additionally, student loans, while available, are not readily utilized by Chinese students.  One way to increase acceptance of student loans would be to adopt a program similar to the British higher education system ("The future of higher education, a white paper", 2003).  This report established reasonable and staged payback periods for students based on the existence and type of employment secured upon graduation.

Another key source of funding that needs to be incorporated into the vision for China’s higher education system needs to be accessing international funding sources.  With WTO membership, China will most likely experience an even greater participation by international agencies in funding the growth of their higher educational system.

Impact on the American Higher Education System

A stronger higher education system in China has the potential to impact the American higher system.  The pressure that an enhanced Chinese higher education system will have on American higher education will carry both positive and negative consequences.

The United States has moved from a manufacturing-based economy to a service-based economy.  While the United States has built up a record $700B trade gap with China, there seem to be fewer goods or services that the United States can provide to China from the position of national comparative advantage.  Higher education, however, is one of these areas.  There has been an increased demand in importing higher education expertise into China, especially in the field of business, finance, and management.  Many top American universities already have established relationships with Chinese universities and offer either stand-alone or joint-venture programs in China.  It is anticipated that this demand will continue to grow.  It is for this reason, that China felt compelled to address this issue in 2003 with the passage of the “Regulations of the People's Republic of China on Chinese-Foreign Cooperation in Running Schools.”

A strengthened Chinese higher education system also has the potential to draw international students from American institutions.  The United States’ status as a “preferred provider” in many fields – most notably science and engineering – has diminished as the number of international students coming to the United States has decreased.  While there are many reasons that can be attributed to fewer international students seeking study in the United States (including more stringent national security concerns and comparatively more expensive tuitions), the increased integrity of the Chinese higher education system has contributed to reduced numbers of Chinese students coming to American universities to study.

The trend whereby fewer international students are seeking American universities is having some positive, unintended consequences, however.  It has caused an increased focus on the state of the feeder systems – the primary and secondary education systems - into American higher education institutions.  This increased focus is beginning to benefit science and math education in the college-bound American students to make them better prepared to attend higher education, whether it is in the United States or abroad.

Conclusion

In 1978, the Chinese government began reworking of the country’s higher education infrastructure.  They have made significant progress to date by rationalizing providers of higher education institutions (i.e., consolidating and selectively shuttering), increasing the quality throughout the system, and expanding in a controlled fashion.  They have great aspirations to increase participation of college age individual’s to a 45% participation rate by 2020.

In order to do so, they need to develop a vision that increases the types (and numbers) of higher educational institutions than are currently available today, modifies of teaching methods to be more contextual and modern, continue progress on their focused “211” and “985” initiatives, and create an entrepreneurial environment in targeted higher educational institutions.  While the government will need to revisit its overall monetary commitment to support this goal, it must also look for additional, more market-oriented funding sources.

As the integrity of China’s higher education system increases, it will put more pressure on the American higher education system.  The international flow of students studying science and engineering to the United States will decrease.  The United States’ status as a “preferred provider” of science education will diminish.  On a positive note, this reduced dependence on international students entering higher education has the potential to increase the integrity of the primary and secondary school systems in the Untied States.  The increased demand, however, also offers opportunity to the United States to become a net exporter of higher education delivery to China.

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