China's major public universities and colleges are encumbered by huge debts, according to a survey by Peking University.
The one-year survey covered 76 universities and colleges affiliated to the Ministry of Education. It showed that the institutions rely heavily on bank loans and government funds.
Most of their income goes to paying interest on the bank loans, according to the Chinese-language 21st Century Business Herald, which published part of the survey yesterday.
The 76 universities and colleges had a total income of 65.67 billion yuan ($8.42 billion) in 2005. Most of the income was derived from government funds and tuition fees.
In the same year, they had a total debt of 33.6 billion yuan, which means an average debt of 440 million yuan for each institution.
Their debt-to-asset ratio was 16 percent on average in 2005. But for the largest borrower - Jilin University - the ratio was 55 percent.
The university had a debt of 3 billion yuan, and had to pay an annual interest of more than 100 million yuan.
Those in a relatively good financial situation include Peking University and Tsinghua University in Beijing; Shanghai Jiao Tong University; Fudan University; Tongji University and East China Normal University in Shanghai; Nanjing University and Southeast University in Nanjing; and Zhejiang University in Hangzhou.
The survey showed government funds remain the top source of funding for universities. More than 49 percent of their income was from the government.
Foreign language universities rely less on government money because they have more ways to generate funds, such as publishing books. Government funds accounted for between 23 and 36 percent of their income in 2005.
Universities and colleges with a focus on agriculture and forestry are most dependent on the government.
Government funds accounted for up to 81 percent of their income in 2005.
A report released by the Chinese Academy of Social Sciences in March said that all of China's public universities and colleges had a combined debt of between 15 billion and 20 billion yuan in 2005.
Universities became big borrowers when the government merged them into super-sized universities. These universities launched a number of building projects to accommodate more students.
Because the number of young people reaching college age keeps growing, the government has been encouraging universities and colleges to expand their enrollment. There were 5.56 million undergraduate students in China in 2000, and the number was 15.62 million in 2005.