Hainan FTP Allows Qualified Foreign Universities to Run Independently in the Province
The Chinese government places great importance on the education sector, particularly in the STEM fields. The recent decision to allow foreign universities to operate independently and run schools in the Hainan FTP demonstrates this. Known as China’s version of Hawaii, Hainan Province has multiple preferential policies in place to facilitate foreign investments, ease of mobility, support for R&D, and technology transfer to transform the island economy.
The Ministry of Education (MOE) and the provincial government of Hainan, located in southern China, have collaborated to introduce new regulations that allow foreign universities to independently operate their institutions within the Hainan Free Trade Port (FTP).
On April 23, 2024, the MOE published a notice on the Interim Regulations on Overseas Institutions of Higher Education running Schools in Hainan Free Trade Port (hereinafter referred to as the “Provisions”) on its website.
This is the first time that China has allowed overseas universities and colleges to operate independently within its mainland jurisdiction, without the need for local partners. Indeed, the Provisions represent a significant departure from the previous requirement that foreign universities collaborate with Chinese entities to operate in the country.
We illustrate the key points of the Provisions and their significance for the higher education industry in Hainan and China as a whole.
What are the key points of the provisions?
The Provisions, which comprise 30 articles, apply to overseas universities and vocational colleges, including those from Hong Kong, Macao, and Taiwan.
These guidelines permit foreign institutions of higher education to establish independent schools or campuses to offer professional education in science, agriculture, and medicine within the Hainan FTP.
Within the Provisions, it spells out issues, such as who can apply, what are the qualifications, what authority is in charge, how to establish foreign institutions how to operate and manage them, and so on.
Who can apply to establish independent universities and colleges in the Hainan FTP?
The Provisions set out guidelines for how foreign universities and colleges in Hainan should be organized. These institutions are allowed to be solely sponsored by overseas higher education institutions, namely, high-level universities and vocational colleges from foreign countries, Hong Kong, Macao, and Taiwan.
To qualify, foreign universities and colleges need to satisfy certain conditions, including:
- Having a good reputation for running a school and a high international reputation.
- Having disciplinary advantages in science, engineering, agriculture, and medicine.
- Record of graduates having high employment quality and good industry evaluation.
Qualified universities and colleges can establish an independent legal entity and offer courses in one or more of the following four disciplines:
Based on the Provisions, foreign universities and colleges in Hainan are permitted more flexibility in school governance, academic management, teaching staff, and fee collection systems.
Specifically, they are not required to involve Chinese educational institutions in running the school, and can receive resources such as land, school buildings, and funds from other organizations or individuals inside and outside China.
These institutions are allowed to offer undergraduate and higher education in science, engineering, agriculture, and medicine. They also have greater autonomy in decision-making bodies, enrollment, teaching, and academic governance.
How to apply for the establishment of an independent higher education institution in the FTP?
According to Article 9 of the Provisions, the establishment of independent educational institutions is divided into two stages: preparatory establishment and formal establishment. Those meeting the conditions for formal establishment may directly apply for formal establishment.
After accepting the application for the preparation or formal establishment of a school, the approval authority shall organize an expert evaluation and provide advisory opinions and make a decision on whether to approve it in accordance with the law.
If the preparatory establishment is approved, a letter of approval for the initial establishment shall be issued. If the formal establishment is approved, a license for the establishment of a school shall be issued. If approval is not granted, a written explanation of the reasons shall be provided.
After obtaining the license for the establishment of a school, the educational institution shall register as a legal person in accordance with Chinese Law.
Who is the authority in charge?
The Provisions clarify the organizational power structure of the institutions, which include the following:
- The Ministry of Education and the People’s Government of Hainan Province share responsibility for overall planning, coordination, macro management, and policy formulation.
- The education administrative department and other relevant departments under the Hainan Provincial People’s Government are responsible for managing specific educational institutions within their jurisdiction.
- The establishment of undergraduate and higher education institutions requires approval from the Ministry of Education, following the input of the Hainan Provincial People’s Government. On the other hand, vocational education institutions need approval from the Hainan Provincial People’s Government and must be reported to the Ministry of Education for record-keeping.
What are the materials required to apply?
To apply for the establishment of an independent educational institution, the following materials should be submitted during the first assessment phase:
- The application report for the preparation of the establishment
- The educational agreement signed between the foreign institution and the government of Hainan (where the institution is to be located
- The proof of investment in high-quality resources
- The situation of educational capital assets shall be submitted
In addition, if the foreign institution needs to obtain approval from the government of their country (region) to establish educational institutions in Hainan FTP, they should also provide the approval documents with their application.
During the second phase, to apply for the formal establishment of the institution in Hainan, the following materials will be needed:
- Application report for the formal establishment
- The school agreement signed between the overseas higher education institution and the Hainan provincial government or the local government of the city where the school is to be located
- The articles of association of the institution, the situation of school buildings, facilities, and equipment
- The funds and assets for the school
- Educational and teaching arrangements
- The composition of decision-making institutions
- The situation of teaching and management personnel
What are the requirements for the structure of the organization?
The educational institution shall establish a decision-making body to review and decide on major matters in the education process. The decision-making body should be composed of representatives of the foreign institution, presidents of the institution, party organization leaders, representatives of faculty and staff, and representatives of the public.
Organizations or individuals, whether from within or outside China, who contribute land, school buildings, funds, or other resources to education, can appoint representatives to participate in decision-making bodies.
What are the requirements for the principal?
According to the Provisions (Article 16), the principal of the school is responsible for executing the decisions of the decision-making body, undertaking the education, teaching, scientific research, and other administrative management work of the school, and serving as the legal representative of the school.
The principal should have good character, educational and teaching experience, and the corresponding ability and level to fulfill their duties. They can be selected by overseas higher education institutions or organized by decision-making bodies.
Moreover, the principal should reside in China for no less than six months per year.
What do the Provisions say about curriculums, teaching language, course materials, and student exchange?
Regarding course content, foreign educational institutions are encouraged to introduce courses and teaching materials that are considered “advanced” globally and meet the urgent needs of China.
However, it is required that foreign educational institutions offer courses covering the Chinese constitution, laws, civic ethics, and national conditions, adhering to the same standards applied to domestic universities and colleges in China.
Regarding the teaching language, foreign educational institutions can use foreign languages for instruction, but they are required to include a certain proportion of courses taught in standard Chinese.
To ensure teaching quality, the Provisions stipulate that foreign higher education institutions must recruit an adequate number of teachers according to staffing standards that are at least equal to those of their overseas institutions.
Furthermore, these institutions are encouraged to establish student exchange programs and engage in mutual credit recognition with foreign universities and colleges.
What kind of treatment can be enjoyed by these independent entities?
Foreign educational institutions operating independently in Hainan FTP are protected by Chinese law, which safeguards their legitimate rights and interests.
Additionally, these institutions are eligible to benefit from preferential policies available in the Hainan FTP.
For instance, they may enjoy tariff exemptions when importing teaching and scientific research instruments and equipment for their own use. They can also take advantage of preferential corporate income tax and individual income tax policies offered within the Hainan FTP. (For more details, please refer to our specific article on how to benefit from Hainan FTP’s preferential tax policies.)
Furthermore, the Hainan Provincial People’s Government and relevant departments are responsible for providing support to foreign teachers and other personnel in terms of entry and exit procedures, residence arrangements, children’s enrollment in schools, and professional qualification certification, in accordance with relevant regulations.
Hainan: Center for international education by 2025
Hainan is being positioned as a major international center for education and innovation by 2025, according to a strategy for the development of education on the island during the 14th Five-Year Plan (2021-2025). The plan includes the construction of over 4,500 new schools, including international institutions, with the necessary infrastructure.
Special education zones are also being created, including the Lingshui Lian International Pilot Innovation Education Zone, Yazhou Bay Science and Education City, and Jiandong Education Zone in a new district in the province’s capital Haikou.
The Boao Lecheng International Medical Tourism Pilot Zone and several technology parks in various districts of the province are also being positioned as important platforms for promoting education.
The Education Development Program 2025 aims to establish not only international universities and colleges but also educational institutions in partnership with foreign organizations, as well as international schools and kindergartens. The program also emphasizes the creation of companies and enterprises that focus on innovation and recruitment.
All of these initiatives are considered integral to the development of the FTP.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at firstname.lastname@example.org.
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