Private Higher Education Development in China

Abstract

difficulties in maintaining their own services. As a result, their participation in supporting and influencing private institutions is decreasing---a significant problem in cities where private colleges are the only higher education institutions. Further, there are no clear incentives for local businesses to invest or sponsor these schools, as their higher education sponsorship entitles them to only a limited tax deduction. A substantial part of foundation school budgets is generated by tuition fees. Per semester tuition fees are autonomously determined by each school, the highest reaching about 200 percent of the average monthly salary. According to the 1996 Personal Income Tax Code, students or parents may deduct 30 percent of the amount state institutions charge as tuition from their taxable incomes, irrespective of whether tuition is paid in private or public schools. Private colleges do not pay taxes on tuition, but do on other revenues. The 1997 white paper on higher education describes a coherent government development policy over the medium term (1997--2002). The paper assigns an important role to the development of private higher education, which should greatly contribute to an expansion of enrollments as well as competition in market-oriented fields of study. Nevertheless, only time will determine whether present or future governments can collect enough political leverage to implement these goals.