The Financial System of Chinese Small and Medium-sized Institutes of Higher Learning and Models for Funding the  Construction of Schools 

            Wang Tiejun

Abstract:

As a country with an population of as exceptionally huge as 1.3 billion, China boasts the most extensive and richest resources of higher education industry in the world. Chinese parents never hesitate to pour as much money as it takes to give their children the best education, which has become the biggest household investment, followed by housing and automobile purchase. This obviously shows the definitely urgent demand of the society for education, which is what’s now stimulating the expansion of higher education industry and the rapid blossom of medium and small-sized institutions in China. Rosy picture as current China’s higher education leaves an impression to the world, the development of medium and small-sized higher education institutions is faced with three bottlenecks, namely inefficient educational system, misplaced rules and regulations and shortage of financial resources.

As far as I am about to put it, some cases in reforming the corporate system could be identified as lessons to be drawn and experiences to be absorbed when we are conducting the reform in educational system. We do not lack successful policies like “focusing on large enterprises while giving a free hand to small ones” and “withdrawing the shares of the state while encouraging more private shareholders”, which are worth imitating in educational reform. Mixed ownership, which has been proved unquestionably successful in corporate restructuring, can also be introduced in reforming medium and small-sized higher education institutions, so that diversified financing channels can be provided, though which all kinds of capitals, both domestic and abroad, to reach these schools would reach these schools by means of legitimate investment and holding the shares of universities. As a result, we are sure to yield accelerating growth of higher education industry.

Research must be conducted to seek new model of economic system framework of ownership for medium and small-sized universities. State capital, collective capital and non-public capital (including natural person capital, managements’ capital and staff shares), in this way, can be combined as a reasonable investment portfolio with diversified investors. Universities can be financed by a dozen of means like lending money from domestic and international banks, civil trustees, credit sponsion or through channels of financial renting and shares remising.

Through the leadership of the president Sunming and other leaders’ arduous work, Beijing United University has stroke a leapbouncing development, keeping itself with the pace of time and always ready to innovate. The successful experiences of running this university are worth elaborating and learning from.