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In response to public concerns over the huge debt owed by Jilin University, officials from the Ministry of Education (MOE) said at a press conference held on Monday that the financial difficulties faced by some universities would affect their further development and promised to take measures to control the loan scale of universities.

According to a report by Peoples Daily on March 26, Jilin University in northeast China recently posted a notice on its school website to solicit suggestions from teachers and students to solve the financial difficulty the school is facing.

The notice posted by the Financial Department of Jilin University pointed out that since the financial difficulties began in 2005, the school has to pay an annual bank interest of 150 to 170 million yuan (US$19.4-22 million).

The situation continues to worsen, and the university is now 3 billion yuan (US$388.2 million) in debt.

Han Jin, chief of the Development Planning Department of the MOE, said that the ministry has noticed the financial pressure faced by some universities, and is working together with the Ministry of Finance to control the loan scale of the universities.

Han believes that solving the financial risk depends not only on strengthened financial management and improvement on the use of loans, but also on greater investment from the government.

He explained that in recent years, facilities have been unable to accommodate the volume of students as universities race to expand. In addition to government assistance, universities should pay more attention to important aspects of education, such as scientific research, qualified teachers, and innovation rather than construction of new buildings.

According to a report by the 21st Century Business Herald, Jilin University is not the only educational institution facing great financial difficulties. By the end of 2005, the total loans of universities from banks were about 150 to 200 billion yuan (US$19.4-25.8 billion), said 2006 China Social Trends Analysis and Forecast. By the end of 2006, the figure had increased to 450 to 500 billion yuan (US$58.2-64.7 billion).

Provinces with strong economies have started to subsidize the universities using government financing, while some universities in Liaoning, Henan, and Shandong provinces are selling land to pay for the debt.

(China.org.cn by Wang Qian, March 29, 2007)