Li Ka-shing: to build a new Silicon Valley in China

A new university backed by Hong Kong billionaire Li Ka-shing and co-founded by partnering institutions in China and Israel is on track to bring Israeli-style innovation and more overseas influence to the Chinese educational system.

A US 130 million grant from the Li Ka-shing Foundation and a combined 900 million yuan (US 147 million) in subsidies from the governments of southeast China's Guangdong Province has allowed the city of Shantou to set up the Guangdong Technion-Israel Institute of Technology (GTIIT), which will start recruiting students in December.

Based in Shantou as a partnership between Haifa-headquartered Technion-Israel Institute of Technology and Shantou University, GTIIT is the ninth Chinese partnership between a mainland and an overseas institution of higher learning. These partnerships, which began in 2004 with the launch of the University of Nottingham Ningbo in eastern Zhejiang Province, are designed to introduce foreign learning styles to China's schooling system and advance educational reform.

Unlike other partnerships around the country, GTIIT has a unique goal: It aims to encourage the kind of innovative spirit that's marked the success of modern-day Israel and its many high-tech companies.

"I hope that, through this collaboration, we can introduce Israel's advanced teaching models and creative thinking to China," said Li Jiange, the new school's chancellor, in an interview with Caixin. "We hope to build a Chinese Silicon Valley, backed by the university, to promote economic transformation in Guangdong and across the country."

Li is an economist and former chairman of China's first Sino-foreign joint venture investment bank, China International Capital Corp. Ltd. He was named the new university's chancellor in October.

GTIIT is the first overseas venture for Technion-Israel, which was founded in 1924 and helped Israel win its first Nobel prizes in the natural sciences jointly held by Avram Hershko and Aaron Ciechanover in 2004, according to the school's website. The school is best known for excellence in science and engineering.

The partnership can be traced back to September 2011 when Li met Technion-Israel Chancellor Peretz Lavie. At the meeting, the Hong Kong tycoon proposed that Technion-Israel open a Guangdong campus as a "beacon of light" for China's education system, according to Lavie. Li proposed a tie-up with Shantou University, which his foundation and the Guangdong government co-launched in 1981.

"Before that, I had never thought about opening a branch in China," Lavie told Caixin. "But we eventually decided to accept the challenge."

Under the 2013 agreement, the Guangdong and Shantou governments would provide not only start-up cash but also 42 hectares of land for an all-new campus.

"In addition to academic research, we also want to bring Israel's innovative and entrepreneurship spirit to China," said Lavie.

Ingenuity and Capacity

Li Ka-shing told Caixin that he considers Technion-Israel one of the best partners a Chinese university could have, based on its contributions to science and technology as well as the nation of Israel. Through the years, the school's more than 100,000 graduates have started more than 1,600 companies and thus helped bolster the nation's economy, according to Li.

"Capital investment is important to promote China's educational development," Li said. "But that's not the only thing. I have been advocating education reform and building new (education) models to improve (student) intelligence, ingenuity and capacity, generation after generation."

A source close to the GTIIT said local officials expect the new university to help change Guangdong's higher education system in ways that support the province's economic development.

A GTIIT statement said the school plans to offer 10 undergraduate programs in English to 2,365 students by 2025, with undergraduate classes starting in 2016. One-third of the faculty members would be Technion-Israel instructors.

It's hoped Israeli companies will follow Technion-Israel's lead by setting up shop on the mainland. Paul Feign, the university's deputy chancellor, has described plans to build new industrial parks near the Shantou campus that could attract Israeli company research and development facilities.

Feign said he's concerned about China's Internet restrictions and bureaucracy, arguing these could have a negative impact on university operations. Internet access rules "will definitely challenge GTIIT's operation," he said.

However, optimistic GTIIT officials are currently negotiating Internet restrictions with the Guangdong provincial government.

Reform Partners

Foreign-Chinese partnership universities have become increasingly popular destinations for Chinese students, as evidenced by skyrocketing enrollments.

As many students see it, partnership universities offer a superior education with curriculums that are more balanced than those at purely Chinese schools, said Yang Dongping, director of the 21st Century Education Research Institute, a Beijing-based non-governmental organization focusing on educational development.

Students also like partnership schools because they emphasize critical thinking, problem solving and cross-discipline studies which are now considered "inadequate in China's educational system," said Denis Simon, vice president of Duke Kunshan University, a joint venture between Duke University in the United States' state of North Carolina and Wuhan University in east-central Hubei Province.

The number of students applying to study at Wenzhou-Kean University has "exploded" in recent years, said the university, which is a tie-up between Kean University in the U.S. state of New Jersey and Wenzhou University in the eastern province of Zhejiang. Some 500 undergraduate students were admitted in 2015, up from 300 the previous year.

Many education experts hope these partnership schools will eventually shake up China's higher education system. But in fact, the nine existing institutions account for less than 1 percent of the 2,845 universities in China, according to the Ministry of Education.

China has too few partnership universities, and those operating are too small, to affect the higher education system overall, said Gu Xianlin, an education professor at Beijing Normal University.

Moreover, although Technio-Shantou is starting out with solid financial support, many partnership universities lack easy access to government funds. Some are feeling the heat of capital pressure. Funding is considered the biggest long-term development challenge facing Duke Kunshan, said the university's President Liu Jingnan, since tuition covers only about 40 percent of a student's education costs.

"The more students we admit, the more subsidies we need to bridge the gap between the actual cost and the amount that can be recovered through tuition," said Liu. "It is hard to break even by relying on tuition alone."

Duke Kunshan, like many partnership schools, relies on subsidies from Duke University and the city government in Kunshan. It also receives funds from private donors.

Liu is calling for a new financing structure.

"We must learn from major U.S. universities about how to build a strong fundraising model so that we can rely on private and alumni donations," he said. "It will be a long process that likely takes 15 to 20 years."