Higher Education Strategy Associates

The Fractured Chinese Higher Education Market

We often casually refer to China as being a single higher education market, but that’s really not true.  It’s probably more accurate to say that it is 32 different markets (34 if you want to include Macau and Hong Kong), one for each of the 23 provinces, 5 autonomous regions, and 4 major municipalities (Beijing, Shanghai, Chongqing and Tianjin).  That’s not just because most higher education funding is local rather than national; it’s also because student mobility is significantly restricted, especially among top universities.

Let’s start with economics.  Broadly speaking, the coastal provinces  Inner Mongolia are fairly rich (on par with Greece and the Baltics by GDP per capita), the middle provinces such as Hubei, Heinan and Shanxi have GDP/capita roughly half that of coastal ones, and then further west GDP per capita drops by another 50% when you get to Yunnan, Sichuan, and Gansu.  It’s not quite as simple as that – Anhui and Jangxi are close to the coast but relatively poor, Xianjing is as far west as you can go and yet is part of the middle-band, Shanghai and Beijing are relatively wealthy, etc.  But the rule of thumb is: coastal provinces are rich, inner provinces are poor.

This matters to higher education for a couple of reasons, the main one being that for the most part, higher education is funded provincially.  There are, however, a few dozen universities which are primarily  administered and  funded from Beijing, most of which report to the Ministry of Education but some to other ministries (e.g. the Telecoms Ministry or the Army).  The 38 research-intensive “985” universities (so named because the policy which governs them dates from May 1998) receive massive amounts of central government funding. The 110-odd “211” universities (apparently a reference to having 100 21st Century universities…21-1(00)…no, I don’t get it either) also get some central funding despite being largely dependent on local funding.

The second reason this matters is that these “top-tier” universities (especially the 985s) are unevenly distributed around the country.  Beijing has seven of them, Shanghai 4, and Tianjin and Chongqing another 3 between them – meaning that nearly half of the top universities are in just four cities.  Indeed, fourteen provinces and regions have no 985 universities at all, and Tibet has neither a 211 nor a 985 university.  That wouldn’t be a major issue if it weren’t for a second important factor: student mobility in china is strictly limited.

Because universities are mostly funded locally, the local government gets to determine the number of spots at each university.  Unsurprisingly, poorer provinces have fewer spots than richer ones.  Which means cut-offs have to be higher; and since every state has control of its own gaokao exam, it’s become the case that different provinces have different levels of gaokao difficulty (there is a helpful service which compares them all and ranks them on difficulty – for the last couple of years it has been Jiangsu).

But despite regional differences in the difficulty  of the gaokao, universities treat all the provincial scores as equal.  This matters enormously because each province reserves spaces for local students – and limits spaces for out-of-province students.  Pretty much everyone in the country wants to get into one of the top Beijing universities, and yet these policies keep these institutions largely the preserve of locals.  Which is absolutely fine for the privileged few who live in Beijing (mainly public servants and party apparatchiks) but not so good for anyone else.  A student from Jiangsu not only takes a tougher gaokao than one from Beijing, but s/he has to obtain a much higher score in order to get into Tsinghua or Peking.  It’s considered a truism in those schools that the students from outside Beijing are of a much higher calibre than the locals.

This problem isn’t going away any time soon.  As Damian Ma and William Adams say in their excellent book In Line Behind a Billion People, this policy of reserving little educational plums for Beijing parents is one of those things that keeps the elite population behind the regime: in a democratic system there is simply no way that benefits would be concentrated this tightly (their chapter on education is called “Give me Equality: But Not Until After My Son Gets Into Tsinghua”).  So even as the central government tries to open spaces at top-tier (i.e. 985 or 211) universities for people from provinces where top-tier universities are scarce or non-existent, they are doing their level best not to put that burden anywhere other than Beijing or Shanghai.  This year, most of the growth in spaces for students from the western provinces fell on Hubei and Jiangsu, much to the anger of local residents who feared their own children would lose out as a result.

There is a lesson here for people interested in recruiting students in China, and it is this: ignore the coastal provinces.  Find the provinces with the hardest gaokaos and the fewest 985/211 institutions (Jiangxi is not a bad place to start).  There are a lot of frustrated families there.  Go talk to them.  They will be more price-conscious than the students on the coasts, but they will also probably be of higher quality.

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