BEIJING: Contrary to their opulent look with sprawling campuses, most of the universities in China are running in huge losses raking up a total debt of USD 40.69 billion until last year, an official has said.
Over 1,100 universities in China had racked up a total debt of 263 billion yuan (USD 40.69 billion) by the end of 2010, a senior official with the country’s auditing authority said on Sunday.
High indebtedness has over the years become a common dilemma at universities across the country, Liu Liyun, deputy director of the research institute of the National Audit Office of China told China National Radio.
A similar report by national auditors few weeks ago revealed that the local governments in China raked up to USD 1.66 trillion which most of them were not in a position to pay back.
The main reason for the huge debts by the varsities was the over-expansion of university enrolment and campus construction over the past 10 years, Xiong Bingqi, vice president of the 21st Century Education Research Institute said.
Many universities are forced to borrow money every year to pay back their old debts, which encumbers the development of the universities, Liu said.
The 40 provincial level universities in north western China’s Shaanxi Province alone had accumulated debt of more than 10 billion yuan (USD 1.5 billion) in 2009.