Hong Kong’s “incredibly well-funded” universities have been tipped to weather looming higher education spending cuts.
Hong Kong is facing a growing financial deficit, prompting the island’s policymakers to look at cost-cutting measures. In the upcoming budget, set to be published on 26 February, the government is expected to slash higher education funding for the next three years.
“With fiscal pressures on Hong Kong’s public finances apparent since the pandemic, as well as moves by the administration on doubling the cap on non-local students and the increase in local tuition fee levels, the writing has been on the wall for some time that this is on the way,” said Laurie Pearcey, adviser to the president at the Chinese University of Hong Kong’s (CUHK) Shenzhen campus and a former CUHK associate vice-president.
Last year’s increase in domestic tuition fees was the first in 27 years.
The extent of the planned reduction was not yet known, but Paul Chan Mo-po, Hong Kong’s financial secretary, said public universities had reserves to fall back on.
“Whether university operations will be affected significantly by the proposed funding cut depends very much on the level of cut,” said Ka Ho Mok, provost and vice-president of the Hang Seng University of Hong Kong. “If the proposed cut is a modest one, say two to three per cent, I think all eight universities will be able to make use of their reserves to cover the cut.”
Hong Kong’s eight public universities collectively had nearly HK$140 billion (£14.44 billion) in reserves in the 2023-24 academic year, according to the South China Morning Post. However, in most cases, this money is earmarked for specific projects.
Nevertheless, the expectation was that Hong Kong’s universities would remain relatively well-funded despite any cuts.
The University of Hong Kong, the territory’s highest-ranked university, received HK$7.04 billion in government funding in 2024.
“There’s no doubt that if you compare the balance sheets of Hong Kong’s university sector with many other peer systems around the world, you’d much rather be a [publicly funded] institution in Hong Kong than just about any public institution in the UK and most of the English-speaking world,” said Pearcey.
“It’s still incredibly well funded by the taxpayer and cuts would have to be extremely draconian for the sector to resemble, say, an Anglo-Australian style funding model where governments expect international students to basically fund indirect research costs or upgrades to campus infrastructure.”
The government has already ruled out increasing international tuition fees to help bolster university finances, saying it would make the region uncompetitive as an international education hub – a decision on which some have cast doubt.
“Comparing Hong Kong universities’ non-local [and] international tuition fees with other major university systems in the UK and Australia, for instance, Hong Kong universities’ fee charges are relatively lower than international student fees in the UK and Australia,” said Mok.
Allowing more mainland Chinese students to attend Hong Kong’s universities could also help universities’ finances, he said.
“The gradual increase of non-local students from the mainland, together with international students choosing Hong Kong as a destination for higher education, will facilitate universities in Hong Kong to generate additional funding to sustain the future development of higher education institutions.”
