Hong Kong¡¯s ¡°incredibly well-funded¡± universities have been tipped to weather looming higher education spending cuts.

Hong Kong is facing a growing financial deficit, prompting the island¡¯s policymakers to look at cost-cutting measures. In the upcoming budget, set to be published on 26 February, the government is expected to slash higher education funding for the next three years.?

¡°With fiscal pressures on Hong Kong¡¯s public finances apparent since the pandemic, as well as moves by the administration on doubling the cap on non-local students and the increase in local tuition fee levels, the writing has been on the wall for some time that this is on the way,¡± said Laurie Pearcey, adviser to the president at the Chinese University of Hong Kong¡¯s (CUHK) Shenzhen campus and a former CUHK associate vice-president.?

Last year¡¯s increase in domestic tuition fees was the first in 27 years.?

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The extent of the planned reduction was not yet known, but Paul Chan Mo-po, Hong Kong¡¯s financial secretary,?.?

¡°Whether university operations will be affected significantly by the proposed funding cut depends very much on the level of cut,¡± said Ka Ho Mok, provost and vice-president of the Hang Seng University of Hong Kong. ¡°If the proposed cut is a modest one, say two to three per cent, I think all eight universities will be able to make use of their reserves to cover the cut.¡±

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Hong Kong¡¯s eight public universities collectively had nearly HK$140 billion (?14.44 billion) in reserves in the 2023-24 academic year, according to the?. However, in most cases, this money is earmarked for specific projects.?

Nevertheless, the expectation was that Hong Kong¡¯s universities would remain relatively well-funded despite any cuts.?

The University of Hong Kong, the?territory¡¯s highest-ranked university, received HK$7.04 billion in government funding in 2024.

¡°There¡¯s no doubt that if you compare the balance sheets of Hong Kong¡¯s university sector with many other peer systems around the world, you¡¯d much rather be a [publicly funded] institution in Hong Kong than just about any public institution in the UK and most of the English-speaking world,¡± said Pearcey.?

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¡°It¡¯s still incredibly well funded by the taxpayer and cuts would have to be extremely draconian for the sector to resemble, say, an Anglo-Australian style funding model where governments expect international students to basically fund indirect research costs or upgrades to campus infrastructure.¡±

The government has?already ruled out?increasing international tuition fees to help bolster university finances, saying it would make the region uncompetitive as an international education hub ¨C a decision?on which?some have cast doubt.?

¡°Comparing Hong Kong universities¡¯ non-local [and] international tuition fees with other major university systems in the UK and Australia, for instance, Hong Kong universities¡¯ fee charges are relatively lower than international student fees in the UK and Australia,¡± said Mok.?

Allowing more mainland Chinese students to attend Hong Kong¡¯s universities could also help universities¡¯ finances, he said.?

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¡°The gradual increase of non-local students from the mainland, together with international students choosing Hong Kong as a destination for higher education, will facilitate universities in Hong Kong to generate additional funding to sustain the future development of higher education institutions.¡±

helen.packer@timeshighereducation.com