Hong Kong universities have been warned to prepare for stiffer challenges from elite mainland institutions that have more money and bigger pools of talent.
While attention has focused recently on how the city's position as China's primary financial centre may be under threat from Shanghai, a leading academic said it was also in danger of losing its standing as top choice for the nation's brightest students.
The vice chancellor of the University of Science and Technology, Tony Chan Fan-cheong, said the likes of Peking University and Tsinghua University were working hard to raise their standards.
"They have global ambition and great students. That's the long-term competition we're up against. We have to keep running to stay in place."
His warning comes ahead of the release tomorrow of a new global ranking of universities by Times Higher Education.
Chan said Hong Kong's universities cannot compete with the mainland on money or talent. "These I think they have in abundance. But how to use them efficiently and in a proper way so that you don't corrupt your core values? That is another question."
Chan, giving his first interview since renewing a contract that will run until 2019, said Hong Kong must play to its unique strengths: free flow of information and a robust rule of law.
"Here you can get any information. You can access Facebook, Google, Twitter or weibo. Everything is available," he said.
Hong Kong's universities constantly rank among the best in Asia and have become the preferred choice of the mainland's best students.
At the same time, they have been criticised for not working closely enough with the business and commercial sectors. A survey in August by Times Higher Education ranked the city's universities behind those in Korea, Singapore, China and even Turkey in terms of collaborating with business in research efforts.
Chan said local universities should strive for more support from business communities.
"I often envy our counterparts in Korea, because they have scholarships and labs sponsored by companies like Samsung and LG, and when their students graduate, they can get into these companies."
Chan noted that many mainland-based companies, such as Lenovo or Huawei, were setting up labs in Hong Kong.
He said the city must seize these opportunities.
"The government has a role to play in this," said Chan. "It needs to offer [more] initiatives and incentives. We have all the right ingredients. We just need a leader with a vision."