Higher Education in Strong, State-driven Economies

Regardless of the country and the nature of the state, refining higher education systems in the 21st-century era of economic globalization and technological acceleration has meant expanded enrolments and institutional differentiation as well privatization, internationalization, quality assurance, accountability and more institutional autonomy, among other alterations and enhancement.Footnote ¹ How higher education systems respond also depends on national differences.Footnote ² Some research emphasizes global market forces and a cult of efficiency in the nature of responses by colleges and universities.Footnote ³ Other research views the response of higher education systems as driven by global isomorphism or world polity.Footnote ⁴ Still other research, especially about China, points to the ubiquitous role of the state in shaping the response to global forces.Footnote ⁵

To be sure, multiple forces and factors shape and limit institutional and system-wide responses. In much of East Asia, the state plays the dominant role in how top-tier institutions act.Footnote ⁶ Policies that promote wide-scale reform are steered by excellence initiatives and financial incentives. In many cases, these incentives exert control over how universities react to global competition driven by world rankings.Footnote ⁷ In making the transition from elite to mass higher education, states also mediate between competing interests and demands from different sectors of the population. Variations in state styles of mediation influence the extent of innovation in the race for excellence, variously defined by relative improvements in benchmark indicators of quality in areas such as student learning, research publications, commercialization of research output and social impact.Footnote ⁸ This is useful to keep in mind when examining state-led initiatives for excellence in Chinese higher education during massification.

In an era of globalization, universities have become far more than institutions for the creation and dissemination of knowledge. They have become instruments of national competition as well as a powerful force for international integration and geopolitical stability through shared human understanding.Footnote ⁹ As massification takes hold, research universities lead their higher education system by providing evidence-based solutions that shape policies for economic growth and social equity. China's party-state recognizes this and expects universities to anchor globalization primarily for the benefit of economic development. State narratives also include the goals of nation building, political stability, civilizational rejuvenation and national identity. Research universities are instruments of the party-state used to rebalance the economy by addressing problems of quality and innovation. In the year of Covid-19, this also means integrating 8.7 million college and university graduates into a hard-hit labour market.Footnote ¹⁰ Of course, states that drive university development are more successful when they can appeal to the core values of the academic profession.Footnote ¹¹ Despite internationalization, Confucian values associated with the pursuit of knowledge for social and national interests still weigh heavily, as academic pursuits follow a desire and responsibility to support the state.Footnote ¹²

Authoritarian states also make use of leveraged incentives for upgrading universities through partnerships with the private sector, especially as universities deepen their international engagement for achieving higher standards through professional management and academic accountability. For developing countries like Brazil, South Africa and China, the level of quality and efficiency at second- and third-tier institutions remains a serious concern, even as their top-tier universities continue to excel.Footnote ¹³ With the exception of China's relatively new Westlake University (Xihu daxue 西湖大学), its private sector of colleges and universities are generally in the lower tiers, even though the best among them provide quality programmes that are well-geared towards graduate employment.Footnote ¹⁴

Higher education systems during massification become differentiated and stratified.Footnote ¹⁵ Institutions in the top, middle and lower tiers differ in their orientation towards teaching, research (basic, applied, developmental) and service to the communities they serve.Footnote ¹⁶ Top-tier research universities have more resources for creating new knowledge, and they are ahead in developing new modes of instructional delivery, curriculum innovation and partnership with industry, business, commerce, foundations, development agencies and cross-border educational institutions.

China's higher education system has to meet increasing domestic demands during its transition from elite to mass education, including the demands of rural households for their children to access higher education; the demands of urban, middle-class families for status culture to be conferred on their children by name-brand universities; the demands of industrial enterprises for graduates with skills to drive productivity and innovation; and the demands of the state for social stability, national unity and global civilizational standing.Footnote ¹⁷

The student profile of top-tier research universities differs across countries, but recruitment generally favours mid- to upper-social strata more than poor and marginalized communities. Countries like Brazil and India, more than Russia and China, emphasize inclusion.Footnote ¹⁸ Although top-tier research universities veer towards recruitment of students from well-off families, their institutional missions espouse upholding values of equity and social justice. Top-tier universities tend to accentuate a socially uniform student cohort. Selectivity becomes an indicator of the capacity to attract wealthy high fee-paying students, and global rankings tend to promulgate deeper inequalities.Footnote ¹⁹ Preferential admission and financial assistance are the ways by which universities redress problems of equity.Footnote ²⁰ China maintains a longstanding preferential policy in higher education for ethnic minority students, most of whom attend second- and third-tier institutions.Footnote ²¹ It has also instituted quotas to reverse the rapid decline of students from impoverished rural areas in top-tier universities.Footnote ²² The government frequently cautions against increasing college tuition fees and charging extra fees.Footnote ²³ The State Council instituted a five-year prohibition in 2007 on raising tuition and accommodation fees.Footnote ²⁴ Tuition fees for public universities were 4,000 yuan in 1999, 5,000 yuan in 2001 and, since 2005, have remained at 6,000 yuan.Footnote ²⁵

Excellence initiatives acknowledge strong state intervention and consist of massive doses of extra funding to lift the performance of flagship universities and establish centres of interdisciplinary research.Footnote ²⁶ China instituted incentives for high-risk basic research and finding interdisciplinary solutions to challenges set out in national five-year development plans. Excellence initiatives can also have implications for teaching and learning quality, curriculum diversification and measures that improve graduate employment. Aside from China, several governments (Denmark, France, Germany, Japan, Russia, South Korea and Spain) have launched major excellence initiatives.Footnote ²⁷ Their intent is essentially about improving external efficiency and boosting national competitiveness. The case of China is illustrative, and this paper attempts to address the question: what are the main features and key challenges of the reforms put in place by China to strengthen the place and performance of its universities in the era of massification in higher education?

The Race: Expansion and Excellence

In the People's Republic of China, the central government has always been the primary force behind the reform of higher education, including major excellence initiatives. After 1949, higher education operated under a centrally planned economy which set targets and controlled resources. Soviet influence in the early 1950s brought universities under a Ministry of Higher Education that separated research institutes from teaching institutions and followed a nationally unified instruction system. Universities periodically became launching pads or objects of destructive political struggles.Footnote ²⁸ It was not until after Deng Xiaoping 邓小平 launched the economic reform and opening-up to the outside world at the end of 1978 that academic standards were re-emphasized as the state moved from a hard to a softer authoritarianism.Footnote ²⁹ Residue from the pre-1979 era left higher education with excessive departmentalization, segmentation and over specialization. Party-state control began to permit market forces to play a stronger role, and universities gained limited autonomy in admissions and curriculum matters.Footnote ³⁰

As economic reforms took hold, enrolment rates grew from 2 per cent in 1981 to 8 per cent in 1994. From 2000 to 2015, the number of universities grew from 1,400 to 2,553. The 2016 enrolment rate hit 42.7 per cent, a 12.7 per cent increase from 2012. Among urban residents of major cities, China approached universal access to higher education. In 2019, the national enrolment rate reached 51.6 per cent. This contrasts sharply with 0.26 per cent in 1949, and 1.55 per cent in 1978. China's postgraduates numbered 667,100 in 2016, an increase of 22,000 on the previous year. Colleges and universities employ 2.4 million academic staff (including 1.6 million full-timers). Recruitment into higher education draws on 32.4 million secondary school students from across 229,800 schools.Footnote ³¹ In 2019, China outstripped other countries, with 40.02 million university students in 2,688 colleges. In 2020, 8.7 million graduated with a bachelor's degree. As of June 2020, 26 per cent were still seeking employment. The number of graduates is nearly ten times the figure in 1997 and more than double the number in the US.

The government introduced its first excellence initiative, known as the “211” project, in 1995. This programme provided extra resources to those universities that could show promise in attaining a higher standard in academic and scientific disciplines and develop the human resources needed to support the national strategy for economic and social development. Such resources included a major upgrading of university infrastructure with funding of 37 billion yuan from both central (19 billion yuan) and local governments, as well as various grants between 1995 and 2005. Priority was given to key disciplinary areas (about 600) in the first five years for teaching, research and managerial efficiency. In the second five years, the number of 211 universities increased from 100 to 110, with 777 disciplinary areas.Footnote ³² The result of the 211 project was an identification of key universities, disciplinary construction as the core of university development, the sharing of resources across institutions, and better planning and management. This occurred while China was in the process of evolving a framework for its higher education system. That framework moved towards the transfer of authority over many universities from central government ministries to provincial governments as well as the merging of universities to achieve economies of scale.

As the economy grew, the state launched a more far-reaching excellence initiative. In front of an audience that included world-class university presidents and other international guests (including the author) in May of 1998, President Jiang Zemin 江泽民 declared that China would establish world-class universities.Footnote ³³ This become the basis for the “985” project. A select group of 39 universities received substantial funding from national and local governments, allocated in phases, for new research centres, campus facilities, international conferences, influential visiting scientists and world-renowned talent, and overseas academic events. The 985 project aimed to build centres of excellence within ten to twenty years and drive innovation by instituting personnel reform, improving internal management, combining talent training with scientific research, and building academic platforms through disciplinary strengthening. From 1999 to 2007, the 39 selected universities received 30 billion yuan.Footnote ³⁴

As China inched closer to becoming the world's largest economy, it reverted to a hard authoritarianism and set forth a 2010 strategy to strengthen its universities and facilitate a national economic restructuring.Footnote ³⁵ The third major excellence initiative, known as the “double first-class” (shuangyiliu 双一流), called for a series of world-class universities and disciplines with stronger performance management.Footnote ³⁶ This initiative, costing over 100 billion yuan, is expected to address the “solidified status, redundant construction and lack of competition” in the wake of the 985 and 211 initiatives, so that by 2020, a number of universities and disciplines would reach the “world's very top tier” and even more will do so by 2030. By 2050, the aim is for the quantity and quality of top universities and disciplines to be among the front-runners of the world. Third-party assessment will monitor spending and performance.Footnote ³⁷

With these three major initiatives (211, 985 and double first-class), the government invested heavily in the elite institutions.Footnote ³⁸ Several universities climbed the league tables by boosting their presence in global scientific publications.Footnote ³⁹ Other ranking indicators such as funding from industry – primarily from state-owned enterprises – also uplifted their ranking. The Academic Ranking of World Universities (ARWU) indicates that the number of Chinese universities in the world's top 500 increased from 14 in 2003 to 22 in 2010 and 51 in 2018.Footnote ⁴⁰ There are only three Chinese universities (not counting those in the Hong Kong Special Administrative Region) in the AWRU's top 100. Most universities trail far behind the front runners. The high number of scientific publications masks the low citation rate of articles by Chinese scientists (4 per cent compared to 30 per cent for the US), but that is changing quickly. From 2007 to 2017, Chinese scientists were cited 19 million times in Web of Science.Footnote ⁴¹ Although that is far behind the 66 million citations attained by US-based researchers, the pace is notable – a ten-year citation count that has increased by almost 30 per cent.

By the second decade of the 21st century, China's universities are virtually unrecognizable compared to their former selves. The general upward trajectory is nothing less than impressive, including the increasing number of academic papers, patents, investments and advances in fields like biotech and computer science, to name just a few. Universities have helped China become a global leader in green technology, super computers (with the world's fastest computer in 2017), digital payments systems and teleporting subatomic particles into outer space. That very rapid rise has been accompanied by a number of problems including widespread plagiarism and a research culture where personal ties influence the awarding of research grants. The academic scientific research enterprise receives very generous support from the government but has to endure a weighty bureaucracy.

Experimentation, Liberal Studies and Institutional Differentiation

Despite China having several world-ranked universities, it is common to hear that its universities produce fewer independent thinkers than their international competitors.Footnote ⁴² As China's labour costs increase, maintaining the country's economic ascent depends on boosting innovation and the quality of its human resources. Generating new products and services will require universities to foster creative talent as well as carry out cutting-edge research. Access to higher education has expanded but the key challenge is to enliven the academic culture, assess and raise quality, and better align university curricula with the changing workplace.

While it is not in the nature of the Chinese system to set autonomy as a high priority, the need to promote independent thinking is widely recognized. Former premiers Zhu Rongji 朱镕基 and Wen Jiabao 温家宝 have acknowledged that maintaining economic competiveness depends on it.Footnote ⁴³ Qian Xuesen 钱学森, the father of Chinese rocket science, saw universities as failing to encourage creativity, multidisciplinary breadth and innovative thinking: “none of our institutions of higher learning is running in the right direction of cultivating excellent talent and is innovative enough.”Footnote ⁴⁴ To address this issue, flagship universities have introduced initiatives in their common core curricula. Peking University's Yuanpei College (Yuanpei xueyuan 元培学院) hosts an experimental undergraduate programme to foster creativity, multidisciplinary thinking and leadership. Stanford University has established a centre at Peking University to expand its role in global education and research, including social science programmes which share ideas about social change. Tsinghua University's Xinya College (Xinya shuyuan 新亚书院), a residential college which aims to reform the undergraduate curriculum, intensifies students’ engagement in learning and group problem solving, and works towards improving the quality of communication between students and teachers.Footnote ⁴⁵ The Schwarzman Scholars Program at Tsinghua University brings future Chinese leaders together with their counterparts from all over the world as part of a master's degree programme. Tsinghua University has also established a campus in Seattle. Branded as the Global Innovation Exchange, it delivers programmes that aim to foster innovative research in new technologies.Footnote ⁴⁶ Other top-tier universities are experimenting with models of learning that break away from the lecture, textbook, memorization and exam cycle. Nevertheless, below the top tiers, most colleges and universities still operate with fewer resources, less qualified academic staff and less attention from the central government. A president of a university in a poor province in the west of China remarked that the university's funding from the central government from 1949 to 2012 was equal to three years of his salary at top-ranked Zhejiang University.Footnote ⁴⁷

Massification is untenable without private (minban 民办) colleges and universities.Footnote ⁴⁸ There are now hundreds of these institutions to meet the growing demand, relieve financial pressure on the government and provide opportunities for those who can pay for it. Independent colleges (duli xueyuan 独立学院), set up and run by regular colleges and universities, have absorbed some of the demand. Over 300 have enrolled some 400,000 undergraduates. The number of students in private higher education increased from 5.3 million in 2012 to 6.3 million in 2016 (22 per cent of all students in higher education) and is expected to reach 8 million in 2021 (24 per cent of all students).Footnote ⁴⁹ The revenue produced by private higher education increased from 69.6 billion yuan in 2012 to 95.4 yuan in 2016 – 9.6 per cent of the total revenue for Chinese higher education – and this figure is expected to increase to 139 billion yuan. By 2020, more Chinese will have a college education than the entire workforce of the US.Footnote ⁵⁰

Reform of University Governance

The system and institutions of higher education are managed through dual leadership, Party schools and leadership appointments. The dual-governance structure, referred to in Article 13 of the Higher Education Law of 1998, is the “presidential responsibility system under the leadership of the Party committee” (dangwei lingdaoxiade xiaozhang fuzezhi 党委领导下的校长负责制). A president and Party committee chair the administration system of public universities. In Article 44, the president and the administrative system have “overall responsibility for the institution's teaching, research and administrative affairs.”Footnote ⁵¹ The Party committee (referred to in English as the University Council) exercises unified leadership and supports the president who ensures that the university operates in line with Party principles and policies.

The relative influence of the Party secretary and president shifts with the individual profile and power that each person brings to the post, or by changes in the orientation of Party central through its policies and opinions. The Party secretary and president are similar to a board chairman and CEO of a Western corporation in that there are ways to ensure collaboration but also cases of conflicts between them. Conflicts are settled internally or by career mobility. The power of the Party secretary has been in ascendance. In December 2016, President Xi reaffirmed the claim that universities “must adhere to correct political ideologies” and become “strongholds that adhere to the Party's leadership.”Footnote ⁵²

The governance of Chinese higher education has moved from direct control to indirect supervision and from an interventionist to an evaluative approach. The instruments of governance are legal, financial and informational. Laws reduce capriciousness and policies influence particular practices. The state is no longer the only source of finance, opening up the potential of universities to generate revenue from other sources. While global isomorphism pushes universities towards shared governance, performance funding and knowledge exchange, it is a challenge to keep them mission focused, market smart and margin conscious. Autonomy is more evident in areas such as fund raising, student selection and the disciplinary and curricular structures. The party-state remains the essential power and authority in university governance. It has also adapted to the acceleration of technology by using it in the supervision of finance and management, admissions, curriculum and ideological supervision.

Party schools and administration academies are sites for preparing senior managers. They confer status and certification as well as provide social and political capital. There is a close relationship between university senior management and the Ministry of Education (MOE) or provincial equivalents (and, in some cases, other ministries). University heads have a civil service rank equivalent to a deputy head of the civil service branch. The governance issue is more than merely granting greater autonomy to universities. Universities must be ready and willing to take greater responsibility for their own governance. Some university heads are as interested in retaining their civil service rank as they are in making universities more autonomous. President and Party posts at top-tier universities have become more professionalized. Some presidents and Party secretaries earned their doctorates in the US or UK, some even remain overseas for work experience before returning.

Governance prioritizes political socialization and “political discipline” to the detriment of academic freedom, thereby causing a role split among academic staff and students.Footnote ⁵³ This is of direct relevance to economic restructuring through innovation as well as to aligning with the values of mainstream international universities. In 2009, China's C9 group of top-tier universities – the Chinese equivalent of the US Ivy League or the UK Russell Group – included Peking, Tsinghua, Fudan, Zhejiang, Nanjing, Shanghai Jiaotong and Xian Jiaotong universities, plus the China University of Science and Technology and the Harbin Institute of Technology. In October 2013, the heads of the C9 group signed a statement that commits to upholding academic freedom. In 2019, however, Fudan University amended its byelaws by removing “academic independence and freedom of thought” and adding language that pledges the school to follow the leadership of the Party. Other top universities followed suit. Those affiliated with NYU Shanghai and Duke Kunshan, namely East China Normal University and Wuhan University, did not revise their charters, presumably to avoid controversy. In May 2013, the government ordered universities not to discuss seven topics (qibujiang 七不讲): universal values, press freedom, civil society, civil rights, the Communist Party's historical mistakes, crony capitalism and judicial independence.Footnote ⁵⁴ The second international survey of the academic profession data indicated that only about one-fifth of Chinese academics think their university administration does not support academic freedom.Footnote ⁵⁵

It is not surprising that an authoritarian system would impose such restrictions and that academics would find ways to handle themselves in an atmosphere of increased internationalization with surveillance to ensure the protection of the state's educational sovereignty. The “Outline of China's national plan for medium and long-term education reform and development” for 2010–2020 calls for the government to release its monopolistic control on universities and permit autonomy by allowing presidents and faculty to run their institutions.Footnote ⁵⁶ While the government will continue to provide funding for a portion of state universities and provide policy frameworks at the macroscopic level, institutions will have to take a greater role in governing themselves than in the past.

International Cooperation and Sovereignty

China's universities have to juggle limited autonomy with internationalization and the government's concern about the protection of educational sovereignty. There are hundreds of Sino-foreign joint ventures in higher education on Chinese soil. At least two Chinese universities have campuses overseas, one in Malaysia and one in the US. Only the US and UK surpass China in their number of foreign students. The number of Chinese students leaving for overseas study still tops that of any other country. Many do not return, especially those earning doctorates, but the proportion of returnees completing a master's degree overseas has risen as China's economy has opened new job opportunities and as overseas job opportunities in the US have become less accessible. The Covid-19 era and the continued deterioration in Sino-American relations have not only slowed economic cooperation but also put Sino-US academic and educational exchanges at risk, in what David Shambaugh has characterized as “a race to the bottom.”Footnote ⁵⁷

The 2003 “Regulations on Sino-foreign cooperation” increased the number of approved partnerships.Footnote ⁵⁸ The MOE records each agreement and studies the results in order to evaluate the quality of any programme. By 2013, there were 1,060 approved Sino-foreign joint ventures in higher education, involving 450,000 students.Footnote ⁵⁹ In 2018, the MOE terminated more than 200 Sino-foreign cooperative education programmes and jointly managed institutions in what the ministry framed as a move to improve quality and regulatory control.Footnote ⁶⁰

Interest continues regarding the question of whether foreign-partnership campuses have any significant impact on the higher education system. The hundreds of partnerships constituted a laboratory for innovative formats in higher learning. The jury remains out on the long-term sustainability of Sino-foreign campuses. Only a few of the partnerships are full campuses. Johns Hopkins University School of Advanced International Studies was the first major university to establish an identity on the campus of Nanjing University in 1986. The University of Michigan runs an engineering campus at Shanghai Jiaotong University. Several universities have established campuses including Nottingham University in Ningbo (partnered with Ningbo University), Liverpool University (partnered with Xian Jiaotong University) in Suzhou, New York University in Shanghai (partnered with East China Normal University), Kean University (hosted by Wenzhou University) in Wenzhou, and Duke University in Kunshan (partnered with Wuhan University).Footnote ⁶¹ Three of Hong Kong's research universities have established mainland base campuses in the nearby cities of Shenzhen, Zhuhai and Guangzhou. No doubt both host and guest universities have learned a great deal from running a partnered university.Footnote ⁶² These campuses are popular with middle-class parents because they offer the cachet of a foreign academic degree without the added costs, security concerns and separation from the domestic labour market.

The Sino-foreign joint ventures in higher education prompted stern warnings. A former minister of education remarked: “Tough tasks lie ahead for China to safeguard its educational sovereignty as it involves our fundamental political, cultural and economic interests and every sovereign nation must protect them from being harmed.”Footnote ⁶³ An influential professor cautioned against majority ownership by foreign entities because it would mean an “infiltration of Western values and cultures at odds with current Chinese circumstances.”Footnote ⁶⁴ A former deputy director of the Shanghai Education Commission directed that it was necessary to “make sure China's sovereignty and public interests are not harmed at any time.”Footnote ⁶⁵ An MOE official pointed to the size of China's education market and instructed that “we must safeguard China's educational sovereignty, protect national security, and guide such programs in the right direction.”Footnote ⁶⁶ The debate about liberal studies and science education is inseparable from the debate about the establishment of universities with Chinese characteristics. The issue remains embedded within an unambiguous paradox, namely the seeming incompatibility within the university system of internationalization, institutional autonomy and educational sovereignty.

Nevertheless, Sino-foreign universities manage to secure a higher degree of institutional autonomy than do their Chinese counterparts. They must still adhere to regulations set out by provincial-level education bureaus, who exert control over student admissions and financial issues and require a great deal of reporting, more than would be the case at their home campuses. The US Congress asserted that American universities in China emphasize academic freedom but face internet censorship.Footnote ⁶⁷

Another initiative, the “thousand talents programme” (qianren jihua 千人计划, TTP hereafter), established in 2008, brought more than 7,000 top-level scientists to China over ten years. It became a victim of the pronouncement that it was a means to transfer sensitive technology. China sees the attack on the TTP as an effort to contain its progress in science and technology, business and manufacturing. The US television news programme, 60 Minutes, revealed how over-zealous investigations by US authorities damaged the academic careers of innocent Chinese-American scholars.Footnote ⁶⁸ China insists that the TTP was an initiative to recruit top scientists, something that the US has always done.Footnote ⁶⁹ After decades of goodwill in academic exchanges between China and the US, the Trump administration threatened to deny study visas to Chinese graduate students in STEM (science, technology, engineering, mathematics) and related fields, especially robotics, aviation and high-tech manufacturing. The university established by Trump himself did not enrol students from China and closed after multiple lawsuits.Footnote ⁷⁰

The New Abnormal: Acceleration and Obstacles

As China inches towards becoming the world's largest economy, there are indications of an economic slowdown that could affect the funding of excellence initiatives in higher education. The higher education system has more students than any other country, a larger budget for research and development than any country except the US, and several world-ranked universities, but as a whole it does poorly on quality indicators. The debate continues about how to build a unique Chinese model. There is a desire to elevate Chinese thinkers to arrest the lingering concern that university education has not been sufficiently shaped by indigenous ideas, especially ideas that discuss how to engage with a changing world.Footnote ⁷¹ These efforts to shape universities with Chinese indigenous ideas fall victim to the race for global rankings. Meanwhile, colleges and universities struggle with uninspiring teaching and media reports that too many students are asleep during lectures.Footnote ⁷² Students spend their final year of undergraduate study doing an internship or looking for employment.

To avoid the middle-income trap, the state expects higher education to sustain economic growth and ensure that graduates find rewarding careers.Footnote ⁷³ Within a few decades, government policies evolved from a centrally planned system of job allocation for university graduates to an open-choice job market. Despite university students seeking internships or related work during their final year of study, about 20 per cent are unemployed upon graduation. That number shrinks to about 10 per cent within a few months of graduation. Households have become more sensitive to the costs and benefits of higher education for graduate employability.Footnote ⁷⁴ To improve the match between higher education and the labour market, especially in second- and third-tier colleges and universities, the MOE has accelerated the reform of application-oriented bachelor degrees in about 600 provincial-level universities.

As two sources of growth – labour force expansion and heavy capital investment – continue to fade, the quality of universities must improve in order for innovation to contribute up to half of GDP growth by 2025. Even with multiple excellence initiatives, the challenge is formidable. University teaching must prepare more students to be able and willing to adapt the knowledge they acquire. Accelerated learning programmes need to drive engineering-based innovation across industries such as wind and solar power, pharmaceuticals, medical equipment, semi-conductor design, internet software, communication equipment, high-speed rail and airlines. University research must align closely with key sectors: advanced information technology, digital control machine tools and robotics, airplanes, ocean equipment and shipbuilding, rail transportation equipment, agricultural equipment, new materials, and biopharmaceuticals and medical equipment. China's science-based companies can only catch up with global competitors if they have access to a large portion of university graduates who can accelerate experimentation and the discovery of new products. Finally, it is not enough to address domestic demands to be a global leader in higher education: research universities must aim at solving global problems.

The state has been strategic in making investments in university research capacity. It permits many companies to compete in each sector. The best competitor in each sector attracts the most talented graduates and goes global with government backing. This system produced leading companies such as Alibaba, Tencent, Huawei, Baidu, Xiaomi and DJI, despite a censored internet. Amid such success, issues of intellectual property and the bending of global trade rules dog the government. It can do more to remove barriers for innovative start-ups for graduates. High value-added jobs for graduates have to balance the increasingly consumption-driven economy by strengthening the expanding service sector.

Despite the massive number of graduates in science and technology fields, many industries still struggle to find talented graduates. The “double first-class” initiative places science-based innovation as a top priority in building universities capable of discovery, invention and commercialization. The TTP initiative guaranteed professorships (with a relocation allowance of one million yuan), which attracted more than 4,000 returnees from 2009 to 2014 who had made significant contributions to industries such as biotechnology, clean energy and sustainable urbanization.Footnote ⁷⁵

The World Economic Forum reported that China produced 4.7 million STEM graduates in 2016, compared to 568,000 in the US.Footnote ⁷⁶ Obstacles remain to improving global competitiveness, especially in basic research and the commercialization of research results. Investments in major initiatives have led to a rapid rise in scientific publications, patents and a science-oriented workforce – but without the impressive breakthroughs and commercialization of results to match. According to McKinsey, “Chinese companies have less than one per cent of global revenue in branded pharmaceuticals, three per cent in biotech, three per cent in semiconductor design, and three per cent in specialty chemicals. And despite the quantity of patents and research papers, the quality of Chinese research still lags in terms of measures of innovation impact.”Footnote ⁷⁷ In the area of drug discovery, Chinese researchers wrote 17 per cent of all global life science journal articles and filed 10 per cent of patents, but produced only 2 per cent of new drugs. In artificial intelligence, Chinese scientists achieved significant progress but about 40 per cent of data scientists have less than five years of work experience, compared to over half of US data scientists, who have more than ten.Footnote ⁷⁸ In 2017, China had fewer than 30 university AI research labs, less than enough to meet the talent needs of the industry. Scientists disproportionately specialize in some areas, creating a gap in others.Footnote ⁷⁹ Higher requirements and keeping up with global developments will be difficult in the deteriorating environment of Sino-US relations.

The way that the state regulates universities is cumbersome for academics. Oversight is ineffective at discouraging fraudulent applications for research grants. Like elsewhere in the developed world, the “publish or perish” pressures have come to dominate the lives of many Chinese academics. This has made them choose projects that are attractive to publishers instead of innovators. There is a black market for papers and many instances of plagiarism and fabrication of research.Footnote ⁸⁰ The government has taken this seriously and has announced a plan to reform research funding with multiple channels to review research grants and policies that remove obstacles to research productivity, quality assurance and international recognition.