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China is set to overtake the US as the world\’s largest economy in 2016 and to be a dominant force in terms of economic and political power. It is now a highly visible country, but not much is known of the workings of the Chinese Communist Party and its current thinking on developing the Chinese higher education sector.

Perhaps this has to do with stereotypical attitudes. When we think of Chinese higher education, for example, competition against UK and American universities is the first thing that comes to mind. They have ambitions to be the best, they have a plan and they have the money to do it. But this mindset misses a basic truth about the old Celestial Empire: China is vast and domestic rivalries are sometimes more important than external ones. Chinese universities have to compete, first and foremost, against each another before making it into the international market.

Not that competition was a trait of the way the Chinese higher education system worked. Until the early 1990s ideology was more important than results. That changed in May 1998, when Jiang Zemin, the then General Secretary of the CPC and President, made clear that modernisation and economic growth would come through reform, particularly large-scale reform of the Chinese higher education system. That proved to be a tipping point for Chinese universities, as it signalled the launch of the ambitious programme known as ‘Project 985’ (from the fifth month of 1998). Its goal, since shared by other Asian governments, was to boost the prospects of Chinese universities and transform them into world-class institutions.

This seemed over-ambitious at the time and Chinese authorities themselves acknowledged that there was a long road ahead for Chinese higher education institutions to be competitive on the global stage. In fact, when the programme was announced only Peking and Tsinghua universities were considered good enough to reach the target. They each received about RMB 1.8bn ($277m) from the Ministry of Education (MoE). The others received lesser but substantial subsidies.

Today, 39 Chinese universities are part of Project 985. The number is telling: there are now some 3000 universities in China, and even for a country this vast there is a limit to the number of academic institutions which can aspire to academic excellence in the long term. Indeed, senior figures in the Chinese establishment have stated publicly that Project 985 has overstretched. In March this year the Minister of Education, Yuan Guiren, repeated earlier statements that Project 985 would not admit other universities, though he specified no reasons. Yang Deguang, former President of Shanghai Normal University, also argued that it was ‘unnecessary and impossible’ for China to have ‘thirty or forty top research-based universities’.

He felt that about twenty universities in Project 985 should focus on research, while others should become ‘applied universities’ (a middle tier, between research universities and technical institutions).

In addition to the scope of the programme, its quality is under scrutiny. Xu Zhihong, a prominent member of the Chinese Academy of Science and former President of Peking University, stated in April 2010 that China had no world-class universities, in spite of the fact that several have made it onto the world rankings lists. What’s more, Xu urged Chinese authorities to reform as quickly as possible the basic principles of Project 985, though it is unclear what he meant.

With the establishment of Project 985 (and the wider and less exclusive Project 211), the MoE is committed to allocating tens of millions of RMB every year. This drives domestic competition and perhaps opens opportunities for foreign institutions. Those Chinese universities operated directly by the state ingratiate themselves with the MoE in the hope of maintaining funding levels. A potential side-effect of the tightened grip is the reduction of the capacity of universities to produce world-class research.

C9: A Chinese Ivy League?

This may go a long way to explaining why some Chinese universities decided to coordinate their policies. In October 2009 nine Chinese universities from Project 985 set up a new grouping known as C9. The scope of C9 cooperation is broad. It includes student exchange programmes, joint training programmes, summer schools and cooperation in curriculum development. These universities aim to implement the formula that has driven the Chinese economy to its present position: ‘do what the West does, but do it the Chinese way’.

Would more independence from the MoE be the next step? A participant at the Observatory’s recent Global Forum in Vancouver noted that the MoE lacks sufficient staff to process all the paperwork for the international partnership activities of Chinese universities and that more of this activity was consequently conducted independent of state scrutiny.

C9 represents a further attempt at differentiation from the mass. The establishment of an elite university league signifies that domestic competition for state funding, which is now fierce, has been given formal expression and is accepted and even sanctioned by the authorities. But on the current trajectory the MoE goals of both academic excellence and equal access will increasingly have to be realised by separate parts of the sector.

Things are different further down the food chain. Chinese higher education reflects the more general trends of the Chinese economy. The Wall Street Journal reported in 2009 that China was suffering from ‘a higher-education equivalent of the global credit bubble’. During the previous decade the government had ordered a campus building spree and enrollment was increased by up to 30% per year to pay off the loans that funded the expansion. But the plans were optimistic and hundreds of universities across China went into debt. University World News reported last week that 1100 universities had run up a total debt of $41bn by the end of 2010. But it is also hard to see how quality can be maintained under these conditions.

This only reinforces the position of Project 985 and its C9 elite. This is the end of the spectrum that is visible to the rest of the world, and investment for success will continue apace.