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Gov't asked to repay universities' $73b debt
Posted: March-12-2009Adjust font size:

 The government should take responsibility for repaying the debts of Chinese universities, which stand at over 500 billion yuan ($73 billion), the top official of one of the most renowned educational institutes said yesterday.

"Universities have no reason to pay back their debts," said Zhou Qifeng, president of the Peking University, on the sidelines of the National People's Congress (NPC) session.

"Colleges cannot make money nurturing talents. The government should take the responsibility of paying all our debts," said the NPC delegate.

Zhou has become the person in the news since he was president of Jilin University, which owed banks 3 billion yuan in 2007.

Due to the lack of adequate funds from the government, universities have had to borrow money from banks for their development over the past three decades.

By the end of 2006, colleges across the country had taken loans worth 500 billion yuan, according to the 2007 Blue Book of China's Education, prepared by the Chinese Academy of Social Sciences.

"The major reason for the huge debt is that the government has not invested enough in higher education," Zhou said.

"The government in fact encourages us to borrow money from banks to build dormitories, canteens, libraries and labs."

Colleges in the country have developed rapidly both in size and quality in recent years. The rate of college enrollment has increased from 9.8 percent to 23 percent between 1998 and 2008. There are 180 million students studying in Chinese colleges, which is the highest in the world.

"China spends about 4 percent of its gross domestic product (GDP) on education, out of which only 2.5 percent comes from the government," said Zhao Han, vice-president of Hefei University of Technology and a CPPCC National Committee member.

"Chinese universities have no option but to take loans from the banks."

Zhou also asked the country's high-income group to donate money towards education. "I hope more and more wealthy people can make donations to schools or sponsor students from poor families," he said.

But education expert Yang Dongping warned that some universities "might squander the government fund" if it agrees to pay off all the debt.

"Some may use the money to build extravagant office buildings," he said. "But public colleges are owned by the government, so the debt belongs to the government as well."

Source: China DailyEditor: oulin
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