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China's universities falling heavily into debt
2007-08-15
Most of China's big universities have fallen heavily into debt in their race to expand and now spend vast amounts of their income paying off bank loans, state press reported on Wednesday. A one-year survey by Peking University of 76 major higher learning institutions around the country found they were relying heavily on government funding and bank loans to survive, the China Daily newspaper reported. In 2005, the 76 universities and colleges had a combined income of 65.67 billion yuan (8.42 billion dollars), but their debt totalled 33.6 billion yuan. Jilin University in China's far northeast, one of the most indebted institutions, has to pay more than 100 million yuan a year in interest, according to the China Daily. The paper said China's big universities, previously funded totally by the government under the old Communist economic model, had fallen heavily into debt partly due to a program that saw them merged into "super-size" institutions. "These universities launched a number of building projects to accommodate more students," the paper said. "Because the number of young people reaching college age keeps growing, the government has been encouraging students and colleges to expand their enrollment." The number of college students rose from 5.56 million people in 2000 to 15.62 million in 2005, according to the paper.
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