Study On Chinese Non-State/Private Higher Education Investment Mechanism

Shortage of funds is a common problem facing higher education in the world, with privatization being one of its development trends in contemporary epoch. Chinese non-state/ private higher education is developing vigorously with the requirement of the deepening of the reform and opening-up policy and socio-economic development. It has contributed a lot in easing the pressure of university/college entrance examination, meeting the needs of the community to improve people's quality, promoting the development of market economy as well as in pushing forward higher education system and enhancing the quality of higher education. Hence it is already an important component of Chinese higher education system. Its development with great efforts is not only an inevitable choice of Chinese socio-economic development, but also a necessary choice for China to realize popularization of higher education and the natural selection for Chinese universities to develop into world-class ones. The fact is, however, Chinese non-state/private higher education has very limited financial resources, which, too much extent, hinders its further development. To solve the financial issue existing in non-state/private higher education, a sound and complete investment mechanism should be established to stimulate investors'enthusiasm and interest in the investment. This thesis focuses on issues concerning investment mechanism in not-state/private higher education.Studies on the history and current status of investment in non-state/private higher education are conducted on the basis of previous research. Meanwhile, the characteristics of the investment in developing no-state/private higher education in such countries as the United States, Japan and India etc. are analyzed. The frame of investment mechanism for non-state/ private higher education is put forward based on the study, which includes: the mechanisms for investment property right, for government financial investment, diversified financing, and legal person governance structure. It is pointed out that in non-state/private higher education, the core of investment property right mechanism is to clarify the main body of the property right and to establish a complete property right structure, being the perquisite for investment and development ; the core of educational financial mechanism is to reform government financial investment system and to reinforce financial support, being the basis for developing educational investment; the core of the diversified financial mechanism is to establish a diversified financial system, being the driving force for the investment; the goal of legal person governance mechanism is to perfect the structure of legal person governance structure and to improve its competitiveness, being the guarantee for investment and development.The thesis is divided into nine chapters:Chapter I: IntroductionThis chapter expounds the background, aims and significance of the study and then reviews research trends of home and abroad, and introduces the thoughts, methods, contents and possible innovations.Chapter II:Defining of concepts concerning private higher education investment mechanism.This chapter defines such basic conceptions as private higher education, the industry category of private higher education, its product's category, the industrialization, mechanism, education system and the investment mechanism of private higher education.Chapter III: Current status of investment mechanism in Chinese non-state/private higher education investment.The current status of non-state/private higher education is explored from the perspective of organization evolution and legal status. Then the major modes and development process of investment are studied, followed by the conclusion that there are four stages in Chinese non-state/private higher education investment, and the present day being diversified financing stage. Based on this basis, main problems in China'non-state/private higher education investment are investigated, namely, a single source of the funding channels, difficulty in obtaining bank loans, little social donation, insufficient investment from the Government, excessive reliance on tuition fees, yet existing limited space for tuition increases.Chapter IV:Investment mechanism of private higher education in other countries and their enlightenments.This chapter deals with investment mechanism of private higher education in other countries and the enlightenment from their experience. History and investment features of private higher education for the United States, Japan and India are analyzed. Though having their own characteristics in economy, society and population, the three countries can lend China experience in the investment, which includes: the establishment of sound legal system and regulations to support private education, increase of the Government's finances for private higher education, support and encouraging of the community for donations, diversifying channels for financing, and distinction between the profit and non-profit private.Chapter V:Property mechanism of non-state/private higher education investment. This chapter elaborates on property mechanism of non-state/private higher education investment. With the development of private higher education, property rights become a serious constraint in non-state/private higher education investment in practice, and in the sustainable development of non-state/private higher education. On the analysis of property right theory and its nature and characteristics, the current status of property right is studied. The lack of clarity of property rights and irrational property rights structure are the core issues related to property right, which affect the investor's initiative and profits. Major ways to clarify the property right in non-state/private higher education include: To reinforce law-making concerning non-state/private higher education, to clarify nature and legal status of non-state/private higher education, to strengthen the Government's supervision on its property management, to separate investors'property ownership and legal right, to make clear the disposition on private higher education, and to determine the ownership of non-state/private higher education properties.Chapter VI:Financial subsidize mechanisms of non-state/private higher education investment.This chapter centers on financial mechanisms for non-state/private higher education. Based on the third sector (the third sector) theoretical analysis, it is considered that the private higher education belong to the third sector, which provide a theoretical framework of reference for the Government to invest for non-state/private higher education. It is pointed out that the current Chinese higher education investment is diversified, the existing problems and reform orientation are guided by"fairness first while taking into account of efficiency", existing re-weighing of the concept of fairness and efficiency; there are certain problems direct investment, indirect investment and personal investment in China's higher education financial investment. To increase the Government's finances to non-state/private higher education, to trial securities school system, to perfect tax credit system for non-state/private higher education, and to set up a well-established financial assistance system for private higher education students.Chapter VII : Diversified financing mechanisms of non-state/private higher education investment.This chapter explores the diversified financing mechanisms for non-state/private higher education. Theory on education cost-sharing and compensation principle provides a theoretical basis for diversified financial system for non-state/private higher education. The significance of modern financial theory to the structural optimization of non-state/private higher education is analyzed. Four principles including the minimum cost, risk control, respect for the law of the education industry, and being in line with state are summarized based on the study on financial mode selection. The main role of non-state/private higher education should be played in carrying out a diversified financing outside the education. The multi-path selection of financing is also studied, which includes: distribution of educational debt financing bonds, the establishment of educational banks, to strengthen the bank-school co-operation efforts to increase commercial loans, lease financing; private equity financing of higher education including private colleges and universities internal joint-stock, full stock; the operation of private higher education investment fund; to attract donations, the establishment of private higher education development fund; to issue private higher education lottery; private higher education asset securitization; the use of overseas capital financing etc.Chapter VIII:Corporate governance mechanism of non-state/private education investment.This chapter focuses on mechanisms of corporate governance structure in non-state/ private education. Modern university system is lagging behind, especially the corporate governance structures is the key factor affecting the sustainable and healthy development of non-state/private higher education. The investment process is also the change of education system and the perfection of the modern university system. The basic features and framework of requirements are analyzed, existing problems in governance structure of private colleges and universities are explored, and theoretical basis and governance structural modes of corporate governance are studied. It is believed that the construction of corporate governance should be centered on corporate governance checks and balances, which can be realized by such measures as reforming institutions, improving the implementing agencies, strengthening the monitoring institutions, and the introduction of derivative litigation etc.Chapterâ…¨: Conclusion and Suggested policyThis chapter main conclusion of the thesis and the issues for further research are summarized, summed up the note and the corresponding policy advice and guidance.