Why China’s super-rich are spending billions to set up universities

Even for China’s richest man, it was a bold investment. Last month, beverage magnate Zhong Shanshan raised eyebrows when he announced plans to spend 40 billion yuan (US$5.5 billion) over the next decade to set up a private university called Qiantang University. Zhong, the founder of bottled drinks giant Nongfu Spring, said the new institution would have a clear vision: to advance scientific research, drive the application of new technologies and cultivate top-tier talent in strategic fields. His initiative is the latest in a growing wave of entrepreneur-funded universities in China, a product of a shift in how the country’s business elite channels its wealth amid Beijing’s intensifying push to develop national self-sufficiency in a slew of hi-tech industries. Just days before Zhong’s announcement, the Ministry of Education granted approval to Fuyao University of Science and Technology (FYUST) – a new institution founded with a US$10 billion donation from Cao Dewang, the chairman of glass manufacturer Fuyao Group – to begin enrolling students this year. Meanwhile, the Eastern Institute of Technology (EIT), a university in the eastern port city of Ningbo funded by semiconductor mogul Yu Renrong, is preparing to welcome its first undergraduates later this year, after admitting its first batch of doctoral candidates in 2022. The 2024 China Philanthropy List, a report from the Hurun Research Institute that tracks the donations of wealthy Chinese, found that 70 per cent of the country’s top donors prioritised education last year, up from 58 per cent in 2023. Other billionaire-funded institutions, such as Beijing Geely University and Westlake University, paved the way for this trend. The universities share a common goal: to support national strategy, address technological bottlenecks and produce talent that can propel China’s industries forward. Li Mingbo, deputy dean at the Guangzhou Institute of the Greater Bay Area, said China urgently required skilled talent in science and technology to drive its industrial transformation, as China’s traditional university system had struggled to keep pace with rapidly evolving industries. “Without a new generation of experts, China risks falling behind in the global tech race,” Li warned. “Today, technological innovation is increasingly driven by enterprises rather than universities, so it makes sense that entrepreneurs are stepping in to fill the gap.” Zhong’s Qiantang University aims to cultivate 15 top-tier experts per year, attract 500 leading researchers and educate 350,000 students, according to a plan released by the Hangzhou government in late December. During a speech at his company’s annual conference last month, Zhong said the university’s mission was to push forward the frontiers of knowledge and drive scientific breakthroughs “from zero to one”. Similarly, Cao’s vision for FYUST is to “benchmark it against Stanford University”. The university is structured to support China’s industrial strategy, with faculties dedicated to materials science, artificial intelligence, mechanical engineering and digital economics, according to previous official announcements. Yu, the chairman of Will Semiconductor with an estimated fortune of 42.5 billion yuan, has pledged to invest 30 billion yuan into EIT, transforming it into a research powerhouse specialising in applied technology. Economist Ma Guangyuan, a thought leader with over 5 million followers on the microblogging platform Weibo, said China needed more entrepreneur-backed universities to drive innovation. “We need a second Fuyao, a third Fuyao – more universities that can solve China’s innovation challenges and enhance industrial competitiveness,” he wrote in a Weibo post last month. It’s politically correct to invest in science and technology. The top leadership won’t overlook those who contribute to strategic national development Donald Dai, Chinese tech executive For Chinese billionaires, setting up a university is a relatively good investment, as China’s economic climate remains uncertain and traditional investment opportunities are risky, said Simon Zhao, an associate dean at Beijing Normal University-Hong Kong Baptist University United International College. “Founding universities has become a win-win solution – it aligns with national strategic goals while offering long-term social and economic benefits,” Zhao said. “In China, establishing and operating private schools is usually profitable, plus there is relatively lenient government regulation on the private education industry, which incentivizes entrepreneurs to devote themselves to education.” Donald Dai, an executive at a Shenzhen-based technology company, believes these donations also carry political weight. “It’s politically correct to invest in science and technology,” Dai said. “The top leadership won’t overlook those who contribute to strategic national development.” The rise of billionaire-backed universities also comes amid increasing calls from the top leadership for entrepreneurs to make greater social contributions. During a visit to eastern China’s Jiangsu province in 2020, President Xi Jinping encouraged entrepreneurs to learn from Zhang Jian, a late Qing dynasty industrialist who founded over 300 schools. The following year, use of the term “common prosperity” – defined as prosperity for all, rather than the few – surged in official propaganda, triggering concerns among wealthy families in China.

Why China’s super-rich are spending billions to set up universities

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}For China’s billionaires, founding new universities offers a chance to make money – and demonstrate they are ‘politically correct’

For China’s billionaires, founding new universities offers a chance to make money – and demonstrate they are ‘politically correct’