Diversifying Funding Sources for Public Higher Education in China during Massification

Abstract

China has provided the world with a new distinctive higher education financing model that emerged out of its unique socio-political conditions. This article investigates the fluctuation of revenue sources during the process of China’s higher education massification. Based on abundant data from Chinese official yearbooks and an extensive analysis of policy documents, the article explores the changes in each revenue source of Chinese public universities. It concludes that as Chinese higher education expanded, its financial system shifted from a single funding channel that relies solely on government to various funding channels. Of these, government funding and tuition together provide the largest share of revenue for public higher education. The proportion of funding derived from entrepreneurial activities, philanthropy and donations is increasing, but still relatively low. The article reveals that the operating revenue of public higher education still depends largely on government funding, which reflects Chinese wisdom about the relationship between government and the market. In China, the diversification of funding sources is closely linked to higher education governance reform. On the whole, cost-sharing means that more market-related fundraising mechanisms and stakeholders are brought into higher education.