Jilin University is crying for help from whom?

Zhao Mu

Jilin university is in financial crisis. It cried for help a few days ago.

A few days ago, the finance office of the Jilin University put up a notice on campus internet: “Notice: A consultative conference on the solution to the financial difficulties of the Jilin University ”

Although this notice is on campus website and “collecting proposals of financial solution” targeting all teachers and students, all people know that the Jilin University's revelation of its embarrassing problems will certainly become a nationwide topic when the notions about higher education institutions' bankruptcy has been circulated widely and hotly debated. And all know who could save these universities who are so indebted that they could not afford to pay interest.

How much money has the Jilin University borrowed crazily from bank? What did they spend the money on?

Let's take a look at the information provided by this notice: “Since 2005, the Jilin University has paid loan interest as high as 150 million to 170 million each year. The university increasingly suffers from expenditure over revenue. The debt is mainly used in two areas. The first one is infrastructure. Another one is salary. We have increased salary to the high level.”

From the annual interest payment as high as 150 million to 170 million yuan, one can estimate the huge amount of loan (it is estimated 3 billion yuan). The crazy loan is for infrastructure and raising salary.

This year, in the National People’s Congress and Chinese People's Political Consultative Conference, Zhou Ji, Minister of Education, responded to the notion of “Bankruptcy of Higher Education Institution” by saying “far away from reality”. He asserted that Chinese universities would not become the “next state-owned enterprise”.

I can understand why Zhou Ji felt so confident in China universities although he failed to provide any convincing reason to argue against the notion of the bankruptcy of China universities. About half year ago when this notion firstly came out, I thought so. But Zhou said that China higher education institutions are not “next state-owned enterprise”. I don't think it is so accurate. From my perspective, the status of China higher education institutions is much higher than general state-owned enterprises. They are “special state-owned enterprises” that should be carefully protected.

Recently, as more and more experts said, according to a strict financial standard, a lot of China universities are bankrupt. The Jilin University revealed its own scandal. It seems to support this viewpoint. Yet, if you think carefully, even though the Jilin University, the most famous university in Jilin province, could not afford the annual interest of 100 million yuan, what could you do to it? Are the banks, who went so crazy that they lent such a huge amount of money to the Jilin University, really brave enough to force the university to apply for bankruptcy through legal procedure? Would the court close down this university and liquidate its asset? Would the banks sell the campus by auction to get back their huge amount of money?

Ah... ah. I can prove to Minister of Education Zhou Ji and the supporters of “bankruptcy” theory that this possibility does not exist at all. And I strongly believe that our great state-owned bank will write off most debts of colleges. Despite without complete statistics, this huge debt already reaches as high as 400 billion yuan.

Now the Jilin University cries for help. Our great state-owned banks have certainly heard that. The leaders of our great state-owned banks have certainly heard that too. If there is no way to force the Jilin University to repay its debt, what should be done? Just cry for help.
In fact, allowing our state-owned banks to write off the debts is not totally unreasonable.

We have known it as early as the year of 2000. The World Health Organization ranked its members according to their ability to mobilize and distribute resources for public health. China was ranked as the 188 th. Among the 191 members, China was ranked as four to the last. China's expenditure in education is even lower than Uganda.

If the state-owned banks write off the debts of these colleges, the excessive loan to so many universities is a correction to the extremely constrained budget. At least, the government enormously increases the per capita investment in “higher education”. This is barely a contribution.

I certainly believe that even though “all Jilin University students and teachers” racked their brain, they could not come up with any solution to this “nearly bankrupt” Jilin University. But I also believe that there is no need for this university to be anxious about its financial crisis.

Be relaxed. Somebody will come to this baby. No matter whether our Chinese taxpayers care about it, they need to pay the debt for this university. The Jilin University is not the only one.

Interestingly, according to the news article about the Jilin University's disclosure of its scandals, a young teacher (Jilin?) said that the Jilin University's confession on its embarrassment is such a “brave” act.

Such a “brave” act.

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Guangzhou University City

Another Megaproject in China! Guangzhou University City! Last Saturday and Sunday, I visited there with my colleague and students.

Zhang Dejiang, the Secretrary of Guangdong Province Party Committee, decided to launch this project in 2001. He was not happy about the ratio of university students and university in Guangdong was below the national average despite its huge wealth. He felt compelled to turn Guangdong into a "Big Cultural Province"(文化大省). The construction of the Phase I began in 2003 and finished in 2004. A very typical way of building city in China. The provincial government invested 30 billion yuan. Now ten higher education institution have already came in and it accomodate about 150,000 students.

Yet this project, covering a total area of 17 square kilometre, is also a part of the new wave of "Enclosure" in China. The site was an isolated island in Panyu, the southern part of Guangzhou metropolitan area. The indigenous inhabitants were peasant and fishermen. The provincial government expropriated their land and demolished their homes. A big conflict over demolition and compensation was caused a few years ago. Now there are only four villages left. You still can see some traces of people struggle there, including the banners, posters and their ancestral halls.

The government boasted of its planning idea of "learning community" which integrates all universities together and enables them to share public facilities. But it turns out that it's more like an industrial district of higher education than a community. The city is separated by circular roads and universities occupied their own turf without much connections with others. The scale of this city is so big that walking between different institutions is not quite feasible and sometimes bicycle does not work very well. The transportation within the campus is also not enough.

University student and regional disparity

According to an investigation of the working condition of 14,000 white collar workers in Beijing, 52% of respondents answer “always work overtime” and only 4% answer “rarely work overtime”. 73% are not paid for overtime by their employers who violate labor law stipulating it as 150% of the basic salary. Some argue that there is an oversupply of university degree holders.

In 1998, only 1.084 million people were admitted to university. There were 2.158 million university students. Since 1999, there has been a rapid expansion of university enrollment. From 2004-2006, the intake increases from 4 million to 5.3 million. In 2006, about 1.24 million university graduates failed to get a job. In 2006, of a total of 4.13 million university graduates, 66.10% earned 1000-2000 yuan monthly.

Yet the expansion of tertiary education sector is not the main cause for the gloomy labor market. In the national population, the number of university students and graduates is not that high, only about the sixtieth in the world.

According to a survey conducted by the National Statistics Bureau, half of the university graduates receive an income lower than their expected salary. Among them, 60% refuse to look for jobs in remote area and medium and small size cities. As Li Zhi Jie and Hu Feng argue, there is a three-tier structure in China: Formal sector of large cities, informal sector and rural village. The gap between them is huge and increasing.

Sun Li Ping, a sociologist at Tsinghua University, argues that since the 1990s, resource and opportunities have been highly concentrated in big cities such as Beijing and Shanghai. Regional disparity becomes so serious that a university graduate might feel hopeless in the less developed region. That is why many people squeeze into the developed areas.

Photo: scribeoflight