Debt said to be taking toll on universities
Spiralling debts have begun to take their toll on the daily operation of universities, the National Development and Reform Commission has warned.
In a social development report, the top planning agency said universities had amassed 200.1 billion yuan in debts by the end of 2005.
It was the first time mainland authorities had revealed such figures and offered a rare insight into the scale of debts that universities on the mainland face, the Beijing News reported yesterday.
Soaring debts faced by universities and colleges have become a growing concern on the mainland in recent years. Some universities are beginning to feel the pinch as a result of their worsening financial situation, and analysts fear many could go bankrupt if the problem persists.
In a desperate move, Jilin University asked its students and teachers in March to offer suggestions on how to cope with more than 3 billion yuan in debts it had incurred over the years.
Pan Maoyuan, a professor with Xiamen University's Institute of Education, said many mainland colleges were struggling with excessive debts.
'Some colleges have already cut back benefits available to teaching staff to deal with the debt crunch,' Professor Pan said. 'But the schools are no longer capable of dealing with the debts on their own and it's not fair to let them do so.'
Mainland universities have been accused of reckless borrowing practice to fuel blind expansion since 1999.
But Professor Pan said the central government and the banks were also to blame because universities were encouraged to continue their building binge as a way of helping the country out of economic stagnation in the wake of Asian financial crisis in the late 1990s.
Professor Pan added that governments, banks and universities should sit down together to come up with an arrangement to tackle the problem.
'Among other solutions, universities could be allowed to restructure their debts and pay them back over a longer period,' he said.