VZCZCXYZ0000
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