As China loses its labour cost advantage, maintaining the country’s economic ascent rests heavily upon boosting the quality of its higher education system. Generating new products and services will require universities to foster creative and innovative thinking, in addition to carrying out cutting-edge research. What happens in higher education over the next ten years will determine to a great extent China’s position at mid-Century – whether it will lead the world economy or become stuck in the middle-income trap. The first challenge is to create world class universities. The second challenge is as crucial – to raise quality throughout its higher education system – the world's largest.

Most of China’s higher education institutions are under local govern¬ment control, but the top-tier 73 universities are directly under the Ministry of Education. The so-called “211” and “985” projects pump investment into these elites to create internationally competitive universities.  The 211 project provides extra financial support for 112 universities selected to spearhead national economic development, while the 985 project aims to transform 40 top institutions into world-class universities. Flagship universities – such as Peking and Tsinghua in Beijing, and Fudan and Jiaotong in Shanghai – have begun to jockey for position in world university rankings. In 2010, two mainland Chinese universities were ranked in the top 200 globally in the Academic Ranking of World Universities (also known as the Shanghai Jiaotong ranking, which bases its findings on objective criteria such as the numbers of citations in international journals) and six in the World University Rankings published by Times Higher Education (which placed a greater emphasis on subjective peer review).

Chinese universities have climbed the league tables by boosting their presence in global scientific publications. In 2008, they published 204 000 papers in peer-reviewed journals that had an abstract in English. China’s global share rose from 4.4% in 1999 to 10.2% in 2008, with a very strong showing in engineering subjects, including nanotechnology. Only the United States (US) had a higher share. Spending on higher education has grown by 20% per year since 1999, and is now over USD 100 billion (EUR 77 billion). Most of the funding is funnelled to the elite institutions, which helps explain why the number of Chinese universities in the Jiaotong global 500 increased from 14 in 2003 to 22 in 2010.

A Higher Education System is more than Flagships

Yet a few world class flagship universities alone cannot carry the whole system of higher education. And even high numbers of scientific publications cannot mask the fact that quality remains a problem. This is reflected in the low frequency with which the world’s scientists cite China’s scientific publications – only 4% of the time compared to 30% for the US, placing China sixth in the rankings. Research funding has rapidly increased, but most goes to projects proposed by senior members of a department or those who are politically connected.

Critiques of the current system are increasingly acknowledged and discussed. Chinese businessmen and scientists alike bemoan a lack of entrepreneurial spirit among graduates. Qian Xuesen, the father of Chinese rocket science, says China’s universities’ failure to encourage creativity, multidisciplinary breadth and innovative thinking is an obstacle to scientific progress. Even Premier Wen Jiabao acknowledges that the ability of the mainland’s higher education system to enhance China’s economic competiveness will depend on fostering more creative, independent thinking.

A handful of top universities are responding. Peking University is experimenting with a liberal arts education programme, mod¬elled on Harvard’s, which aims to foster creativity, multidisciplinary thinking, and leadership. Tsinghua University has intensified the degree of student engagement in their learning by introducing classes in group problem solving and improving communication between students and teachers. Other star institutions are experimenting with models of learning that break the lecture, textbook, memorization and exam cycle still common in many universities. But the bulk of China’s universities and colleges operate with fewer resources, less qualified academic staff, and less attention from the central government. The government has to identify policy levers to improve the responsiveness of the larger higher education system.

Yet, policy makers appear to be as consumed with handling the burgeoning num¬bers of students as with root and branch reform of teaching and learning. The recently promulgated National Outline for Medium and Long-term Education Reform and Development (2010-2020) targets a higher education enrolment rate of 40% by 2020, by which time 20% of the working-age population should have university degrees. Given China’s demographic profile, China must spend the next decade fostering talent in the shrinking proportion of youth who will have to support an increasingly ageing population in the future. That should mean shaking up the current system and encouraging greater independence among both professors and students.

Gerard A. Postiglione is Professor and Head of the Division of Policy, Administration and Social Science, and Director of the Wah Ching Centre of Research on Education in China, at The University of Hong Kong.