CHINESE universities boasting the largest number of students in the world are endangered by a severe financial crisis, the result of the rapid enrollment expansion since 1999, deputies to the National People's Congress (NPC), have warned the top legislature.

To cater for students flocking to campuses for higher education in expectation of finding a good job on graduation, universities have to borrow huge sums of money.

"As a far as I know, there is one university that owes banks 5 billion yuan (US$641 million). This means it must pay 300 million yuan in interest each year," said Hu Sishe, an NPC deputy.

"I don't know how many students they have to enroll if they want to repay the money in tuition fees," said Hu, also president of the Xi'an Foreign Studies University based in the northwestern province of Shaanxi.

Hu did not give the name of the debt-ridden university nor did he disclose where the campus is located.

According to other NPC deputies, universities' debt has exceeded 10 billion yuan in both Shandong and Jiangsu provinces on China's fast developing eastern coast.

As for the total amount of debt owed by Chinese universities, no one knows.

China's higher educational institutions have been expanding rapidly following the government's decision to enroll more university students in 1999. Now 5 million students are admitted on campuses annually, compared with fewer than 1 million a decade ago, according to the Ministry of Education.

The number of colleges and universities also rose from 1,000 to nearly 2,000.

To cope with the rapid expansion, many universities resorted to banks for huge loans to support construction of dormitories, dining halls and classrooms, said Wang Bintai, an NPC deputy and director of Jiangsu Provincial Education Department.

Universities had to cover 90 percent of the construction costs themselves as investment from the government was not in place, said NPC deputy Wang Wu, who also serves as vice president of the Southern Yangtze University.

The university, based in Jiangsu Province, an economic powerhouse in East China, has seen a drastic increase in the number of students, from around 4,000 to 40,000 in just a few years.

It is reported that short-term loans account for more than 60 percent of universties' debt.

Under the mounting financial burden, many universities are unable to focus on teaching and research, which poses a threat to their future development and even to the qualityof the country's higher education as a whole, said deputies at the ongoing NPC annual session.

Hu was worried some colleges and universities, especially the understaffed ones in remote areas, might go bankrupt as had happened to some debt-ridden state-owned enterprises.

"The government must take the issue seriously and work out measures to solve the problem as early as possible," said Hu.

NPC deputy Zhou Hongxing, also a professor in Shandong University, even called on the government to pay most of the bills of indebted universities.

"Colleges and universities in China have made great contribution to the overall improvement of education in the country, and they deserve financial support from government," said Zhou.

Some local governments have taken action to deal with the crisis.

In Jiangsu, the provincial government recently made a decision to allocate 3-4 billion yuan to fund indebted universities in the province.

For most NPC deputies, it is a pressing job to help universities overcome the financial crisis no matter who is going to pay their bill.

(Xinhua)