Cablegate: Hong Kong Moving to Create World-Class University

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RR RUEHWEB

DE RUEHHK #2177/01 3310805
ZNR UUUUU ZZH
R 270805Z NOV 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 9053
INFO RUEAUSA/DEPT OF EDUCATION WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS HONG KONG 002177

SENSITIVE
SIPDIS

STATE FOR EAP/CM

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD HK CH
SUBJECT: HONG KONG MOVING TO CREATE WORLD-CLASS UNIVERSITY
SYSTEM

1. (SBU) SUMMARY: Education is one of "six pillar industries"
the Hong Kong Government (HKG) has identified for financial
incentives and other government support, in a policy effort
to diversify the economy away from financial services and
foreign trade. The post-secondary education system is
arguably the most important component of the education
pillar; it has received significant government support. The
government-funded, semi-autonomous University Grants
Committee (UGC) has been coordinating Hong Kong's efforts to
create a world-class post-secondary education system. Under
its guidance, the HKG, Legislative Council (LegCo) and the
leaders of Hong Kong's seven public universities have agreed
to implement three key initiatives: (a) shifting all
universities to four-year undergraduate degree programs in
2012; (b) increasing funding for university research
programs; and (c) doubling the percentage of non-local
students at Hong Kong's universities (currently 10%). The UGC
recently established a higher education review committee to
deliver an analysis in 2010 and recommend additional steps to
improve Hong Kong's university system. END SUMMARY

2. (SBU) Comment: Most HKG announcements of support for the
six pillar industries came during the depths of the global
economic downturn. They were largely devoid of details
regarding funding and program development. Media sources
have noted the paucity of significant, tangible HKG efforts
to support the six pillars. Whether the overall strategy
gathers steam will depend on many factors. However,
observers expect the education pillar to continue garnering
political support and funding, as Hong Kong's public
universities strive to move up the global rankings. Hong
Kong's political and business leaders understand the economic
benefits from a world-class university system. With larger
budgets, strategic guidance from the UGC, and continued sound
management practices, Hong Kong's universities should benefit
from Asia's economic rise and the associated "redistribution
of brains" toward the region. End Comment

HKG To Support "Six Economic Pillars"
-------------------------------------

3. (U) The HKG in April 2009 identified "six pillar
industries" for government support, as a means to diversify
the local economy away from financial services and foreign
trade. The six pillar sectors are: education services;
medical care; environmental protection; cultural and
creative; innovative science and technology; and product
testing and certification. The HKG's promotion of the six
pillars - announced during the depths of the global economic
downturn and financial services industry crisis - marks a
departure by the HKG from its traditional non-interventionist
approach toward economic development. Details of the
strategy and specific support programs are in embryonic
stages, but analysts see higher education as one of the most
promising areas for further development.

Tectonic Shifts in Higher Education
-----------------------------------

4. (SBU) To date, the most visible and significant government
support for the six pillar concept has been targeted at Hong
Kong's post-secondary education system. In a move announced
several years ago and fully supported under the education
"pillar," Hong Kong will change its undergraduate university
degree programs from the British three-year model to a
four-year system more closely resembling that of the U.S. and
mainland China. This major shift will begin in 2012 when the
last year of secondary school is converted to a freshman
university year. To successfully establish the extra
university year, Hong Kong's seven public universities will
have to hire an additional 1,000 professors, along with
hundreds of instructors and administrative staff, according
to Education Bureau Principal Assistant Secretary (PAS) Amy
Wong. She told Econoff on November 12 that the HKG and LegCo
would support increased budgets and research grants for Hong
Kong's publicly-funded universities to ensure they attract
top-notch foreign professors with competitive compensation
packages. Hong Kong's public universities will also need to
build thousands of additional dorm rooms. "The student
housing shortage will worsen in 2012, despite current
construction programs," she noted.

5. (SBU) The University Grants Committee (UGC) will continue
to play a critical role in these developments. The UGC is a
non-statutory, semi-autonomous body that advises the HKG on
higher education matters and controls the allocation of
almost all government funds to Hong Kong's public
universities. It also provides institutions with

developmental and academic advice, and monitors their
performance to ensure cost-effective attainment of high
academic standards. The UGC makes funding allocations every
three years, based on its review of each university's
spending plans. UGC funding for the 2009-2012 triennium
totals USD 1.45 billion per year, or almost five percent of
the HKG's current annual budget. Each public university
enjoys operating autonomy, including control of curricula,
academic standards, staff recruitment, and selection of
students. The HKG's Chief Executive appoints UGC members.
The 27 members currently include ten non-local individuals
(two from the PRC, two from the U.S., and others from the UK,
Australia and other nations) and seven non-academics.

Steps Toward Creating World-Class Universities
--------------------------------------------- -

6. (SBU) UGC Deputy Director General Dorothy Ma told Econoff
on November 13 that the UGC paid close attention to the
annual Times Higher Education-QS World University ranking of
global universities. Of the top 15 universities ranked in
October 2009, eleven were American and four were British.
Hong Kong University was the highest-ranked local university
(24th in the world), with two others in the top 50
(University of Science and Technology - 35; and Chinese
University of Hong Kong - 46). For regional comparison, the
PRC's top university (Tsinghua University) was ranked 49th,
while the top universities of South Korea and Japan were
ranked 47th and 22nd, respectively.

7. (SBU) Ma said the UGC intended to boost the international
rankings of Hong Kong's public universities by achieving
three main goals: (1) lengthening undergraduate degree
programs to four years beginning in 2012; (2) obtaining
increased HKG funding for the growing number of
university-sponsored research proposals; and (3) doubling the
proportion of "non-local" students enrolled in undergraduate
and post-graduate degree programs.

Mainland Students Dominate Among Non-Local Post-Grads
--------------------------------------------- --------

8. (SBU) Ma said "non-local" students accounted for only ten
percent of Hong Kong's 62,400 students seeking undergraduate
and post-graduate degrees at public universities. Non-locals
accounted for a much higher percentage at the post-graduate
level. According to UGC statistics for the 2008/09 academic
year (latest available information), over 95 percent of
non-local degree-seeking students were from Mainland China.
(Note: An additional 12,000 post-secondary students are fully
self-funded at private institutions in Hong Kong.) Beginning
in May 2008, in an effort to boost the proportion of
non-local post-secondary students, the HKG allowed non-local
students to work part-time and take summer jobs while
pursuing their degrees. The HKG also enabled them to remain
in Hong Kong for up to one year after graduation to seek
employment. Ma said these measures have not appreciably
boosted enrollment of international students. "Our marketing
efforts have been insufficient," she said.

Only 45 AmCits Studying Toward Degrees in Hong Kong
--------------------------------------------- ------

9. (SBU) Education Bureau PAS Wong said the UGC and the
universities needed to increase their efforts to market the
attractiveness of Hong Kong's universities to non-Chinese
students. She noted that few international students
considered Hong Kong for their university education, despite
the city's growing reputation for academic excellence,
reasonable tuition fees for foreign students (approximately
USD 13,000 per year), and the use of English as the standard
language of instruction. Citing an example of the paucity of
foreign students, Ma told EconOff that while hundreds of U.S.
citizens participated in exchange programs at Hong Kong's
public universities, only 45 Americans were seeking degrees
in Hong Kong. Hong Kong University is the only public
university with more than 100 non-Asian degree-seeking
students (it has approximately 150).

10. (SBU) Both Wong and Ma acknowledged the lack of
affordable housing (whether in the form of dorm rooms or
off-campus lodgings) remained perhaps the biggest constraint
on efforts to attract foreign students. For example, Hong
Kong University currently had a 2.5 year waiting list for its
very limited supply of student housing. Local parents and
"many LegCo members" have criticized UGC lobbying efforts to
attain government funding for additional foreign student dorm
spaces, according to Ma. "They often view student housing as

a zero-sum game between local and international students, and
as for now, they are unfortunately correct," she said.

Review Committee to Recommend Way Forward
-----------------------------------------

11. (SBU) Ma said the UGC recently established a Higher
Education Review Committee, headed by Colin Lucas (former
Vice Chancellor of Oxford University and current Chairman of
the British Library). The committee will produce a "forward
looking analysis" by 2010 year-end focusing on "world trends"
in higher education. It will recommend specific steps to
develop a world-class post-secondary education system in Hong
Kong. Ma said the report will serve as the UGC's analytical
basis to lobby for additional funding from the Education
Bureau and LegCo.
MARUT

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