Beruflich Dokumente
Kultur Dokumente
March 2003
Table of Contents
Foreword
Executive Summary
Chapter
1 Introduction
2 Global Competition
3 Quality and Quantity: Aspiration for Growth
4 Alternatives
5 Goals
6 Models of Integration
7 Issues, Pros and Cons
8 Recommendations
Appendices
The Task Force to Advise on Institutional Integration hereby submits its Report to
the University Council.
The Task Force is grateful to all members of the University who have provided
comments and views. Prof. Leslie Lo and Prof. David Kember of the Faculty of
Education have helped to direct our attention to works in the academic literature on
university mergers. Colleagues in various administrative units have helped with the
collection of data.
Our gratitude goes to Mr. Jim Luk and Mr. Wen Zhonglin, Ph.D. students in
Education, for helping with the research that has gone into Chapter 3 and Appendix C.
Editorial support and translation was provided by Miss Amy Leung and other
colleagues in the University Secretariat.
Executive Summary
1. Introduction
The Task Force is asked to advise on the desirability and feasibility of
integration between CUHK and HKUST. It has deliberated on the issues with
care in 10 meetings, and has sought views from staff, students and alumni
through a wide-ranging consultation.
2. Global competition
The Task Force begins with the proposition, put forward in the Sutherland
Report and accepted by the Government, that our universities must strive for
excellence and compete globally, and that the only way to do so is to focus
resources on a small number of outstanding universities. CUHK should aim to
be among these elite institutions. The status quo is not sustainable.
4. Alternatives
While there may be other possible avenues for improvement, and for securing
resources for improvement, most of these have relatively limited potential, are
already exploited, but most importantly should be pursued whether or not there
is integration; in this sense these factors are not relevant in weighing the pros
and cons of institutional integration.
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5. Goals
The goals that CUHK wishes to pursue are examined. While the impact of
integration with a strong partner that shares our vision and standards will be
positive in many dimensions (e.g., research, diversity of offering, influence),
there are also areas of concern (e.g., intake quality, general education).
6. Models of integration
Various models of integration are examined. It is argued that a voluntary
alliance will have limited effect, while a federation will achieve modest
efficiency gains at relatively little cost and pain. It is suggested that the model
to be explored should be a federation evolving towards a unitary university.
Groups of subjects could be placed on the two campuses; the need for student
travel should be small, but a price will be paid in the diversity of informal
contacts for students.
On the other hand there would be costs: more bureaucracy, less personal care,
dilution of traditions, and segregation of subjects across two campuses. More
onerous will be the cost of transition in both financial and human terms.
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enhanced support, provisions for the transition and most importantly a stable
and nurturing policy.
8. Recommendations
In the light of all these considerations, the Task Force recommends to the
University Council that it should affirm its wish to pursue discussion with the
Government and HKUST on the way forward, in order to come to an
understanding on the many issues that need to be resolved before a decision
can be made; and that the Council Chairman and the Vice-Chancellor should
be authorized to initiate formal dialogue with the Government in the first
instance and to report to the Council thereon, within the following parameters:
(i) that the Government should first formally affirm that the purpose of the
proposed integration is to improve quality and create a university
capable of competing at the highest international levels, rather than to
reduce cost, and that, in particular, the unit of funding per student will
not be adjusted downwards for increased size or efficiency gained, so
that the integrated institution can have the resources to achieve its goals;
(ii) that in addition, the Government and the UGC agree to consider the
integrated institution, provided it satisfies certain conditions to be
agreed, as the primary candidate for the focused and enhanced public
and private support cited in the Sutherland Report, with such public
support to start once integration plans are accepted by all parties;
(iii) that the Government further pledges to support, in principle, the added
administrative cost incurred during the transition (as front-end loading
for a new university) and the capital spending needed to build extra
teaching and office space for decanting of departments and
programmes, with the level of such support to be negotiated;
(v) that the Government recognizes the issues and concerns presented in
this Report, and pledges that these will be seriously addressed in any
integration plans.
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The Task Force further recommends that, subject to favourable indications
from the Government on the above issues and at a time judged by the Council
Chairman to be suitable, the Council Chairman and the Vice-Chancellor
should be encouraged to initiate dialogue also with HKUST on any and all
matters concerning a possible integration between the two universities, with a
view to improving communication and mutual understanding, and where
appropriate also with a view to joining hands in discussions with the
Government on the way forward.
The Task Force also recommends that the University should at appropriate
intervals report on and account for the progress of discussion to staff, students,
alumni and other members of the University, whose views should be heard
throughout the process.
The Task Force further recommends that, having submitted its Report, it
should now be dissolved.
____________________
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Chapter 1 Introduction
The formation of the Task Force and its work leading up to this
Report are described.
1.1 This Report is submitted by the Task Force to Advise on Institutional Integration
of The Chinese University of Hong Kong (CUHK) to the University Council, in
discharge of its duties under the Terms of Reference to advise on the desirability
and feasibility of a proposed merger or institutional integration between CUHK
and the Hong Kong University of Science and Technology (HKUST).
BACKGROUND
1.2 The idea of some form of collaboration between CUHK and HKUST was first
raised in the late 1990s by the then heads of the two universities after
consultation with their respective senior colleagues. Both universities wished to
establish closer links in order to cooperate in making greater contributions to
tertiary education. In September 1999, the two universities agreed to form a
strategic alliance to carry out the following activities:
1.3 To a limited extent, the two universities have cooperated in academic exchange
(e.g. teaching in mathematics) and research (e.g. Chinese medicine). Although
large-scale collaborations have not yet occurred, the benefits that could be
derived from an academic partnership have been recognized.
1.4 In March 2002, the University Grants Committee (UGC) released its Report on
Higher Education in Hong Kong (the Sutherland Report) [1]. Its very first
recommendation is “That a small number of institutions be strategically
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identified as the focus of public and private sector support with the explicit
intention of creating institutions capable of competing at the highest international
levels” – a theme to which we shall repeatedly return. In the face of intense
global competition, CUHK (and likewise HKUST) responded to the
recommendation by exploring ways and means to leverage upon its strengths in
order to make even more significant contributions to higher education and to the
community-at-large.
1.5 In this climate, the heads of the two institutions had, on various informal
occasions in 2002, exchanged views on closer cooperation, including the
possibility of integration and merger. Senior members in CUHK were apprised
of these discussions, and were aware of their informal and exploratory nature.
CUHK was also given to understand that senior members in HKUST were in the
picture in a similar way. However, all parties were conscious that a formal
discussion could not be properly launched without an indication from the
Government that institutional integration is within the envelope of public policy
options and that the Government would at least encourage a formal process to
study the issue. This view was brought to the attention of the Secretary for
Education and Manpower.
1.6 On 4 October 2002, at an informal media gathering, the Secretary for Education
and Manpower endorsed the concept of a merger between the two universities.
In reply to media enquiry about implementation, the Secretary for Education and
Manpower mentioned a possible time-frame of approximately one triennium.
This generated interest, concern and strong responses from various quarters on
and off the two campuses.
1.7 CUHK recognized the need for a careful study of institutional integration based
on a rational and solemn analysis of the issues. A Task Force to Advise on
Institutional Integration was established by the Chairman of the University
Council and the Vice-Chancellor to explore the desirability and feasibility of
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institutional integration. The composition and terms of reference of the Task
Force are set out in Appendix A.
1.8 The Task Force held 10 meetings between November 2002 and March 2003,
with the earlier meetings given to understanding the background and
enumerating the issues, and the later meetings given to analyzing the views
received (see below), and, in the light of all the information in hand, coming to a
view on the recommendations to put forward.
Consultation paper
1.9 A consultation paper was issued on 29 January 2003 to all members of the
University, including the Council, staff, students and alumni. The consultation
paper (Appendix B) set out the main considerations underlying the proposal for
institutional integration, and clearly stated the objective of the Task Force as
follows:
(a) Given the present constraints, how can CUHK, as a public comprehensive
research university, attain the right size, critical mass and economies of scale,
secure more resources, and thereby achieve excellence and leadership in the
Asia-Pacific region? In the present circumstances, can CUHK achieve these
goals by way of institutional integration? Are there other ways and means
the Task Force should consider in its deliberations?
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(b) With regard to the pros and cons of institutional integration, are there any
other issues or serious difficulties that the Task Force should take into
consideration in its deliberations?
(c) If CUHK were to enter into discussions with the Government, are there any
other conditions that need to be set or issues addressed?
Consultation process
1.11 Four hearings were organized, on 15, 17 and 24 February (two sessions), with
one conducted in the CUHK Teaching Centre in Central, two on campus, and
one at the Prince of Wales Hospital. Members of the University were invited to
attend and to express their views and, where appropriate, to seek factual
clarifications. In addition, members of the University were invited to submit
views in writing to the Task Force. All written submissions and a transcript of
the hearings are posted on the website of the Task Force. The views expressed
were considered by the Task Force and the most important points raised have
been incorporated into this Report.
1.12 The Task Force is pleased to report that members of the University have
approached the issue with reason rather than emotion, and have shown respect
for different points of view. The University should be proud that valid concerns
about the welfare of individuals have not overwhelmed the need to view the
matter also from the vantage point of the community as a whole.
1.13 The Task Force thanks all members of the University community for putting
their views forward. This has helped the Task Force to identify issues and assess
the importance attached to different factors by various sectors. Moreover, areas
where possible misunderstanding have arisen have been identified and given
particular attention and a more detailed exposition in the Report.
The Report
1.14 The Task Force has taken half a year to produce this Report, because the
importance of the issue deserves a careful study of the facts, a rational analysis
of the issues and a process of wide consultation. The University, as a learned
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institution, also expects an analysis with a degree of intellectual rigour, rather
than merely an assessment of sentiments and wishes. We hope that the substance
of this Report will help members of the University, and indeed all those
interested in this matter, to be able to see the way forward with more clarity and
understanding.
RESPONSE OF HKUST
1.15 A similar Task Force appointed by HKUST has submitted its interim Report to
HKUST’s Council, which endorsed it on 8 December 2002. An extract of
HKUST’s press release issued on that date is set out in Appendix D. The
HKUST interim report states inter alia that “in the current economic climate, the
possibility of creating an institution that would be the focus of public and private
support through the merger of two of Hong Kong’s best universities suggests a
way forward that deserves serious consideration.” We note that HKUST will
approach the Government for clarifications regarding such critical issues as the
objectives of a merger and the funding implications to enable HKUST to further
consider the matter, and welcome this development.
1.16 On 1 March 2003, it was reported that the Secretary for Education and
Manpower had paid an informal visit to HKUST and had met its senior staff, to
provide the clarifications sought by HKUST. It was reported that HKUST would
reactivate its internal discussion on the possibility of integration. An extract
from the open letter from the Council Chairman and President of HKUST to staff,
students and alumni is also given in Appendix D.
1.17 The rest of this Report is organized as follows. Chapter 2 examines the global
competition and the need to improve and excel. Chapter 3 argues that
institutional size is a necessary condition for excellence for a publicly funded
comprehensive research university, and provides data to show that the present
size of CUHK is less than ideal. Chapter 4 examines other ways of improvement,
or of seeking resources for improvement, and argues that these have limited
potential and can in any event be pursued whether or not there is institutional
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integration. Chapter 5 examines the goals that CUHK seeks, and how each of
these might be affected by integration. Chapter 6 outlines the possible models of
integration and sketches one scenario that might be worthy of further
consideration. The issues, pros and cons of integration are discussed in Chapter
7. These then lead to the recommendations in Chapter 8.
___________________
[1] Sutherland, S.R., Higher Education in Hong Kong, a Report of the University
Grants Committee commissioned by the Secretary for Education and Manpower,
2002.
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Chapter 2 Global Competition
2.1 As we enter the 21st century, the higher education sector in Hong Kong must be
prepared to face the region and indeed the world. We already recruit staff
trained in the best institutions worldwide; they conduct research with the
expectation that the results are to be judged by international peers. Our staff
have been elected to national and international academies [1] and fellowships of
leading academic bodies [2], and some colleagues are among the most cited
academic authors in the world [3]. Even though simplistic rankings should not
be taken too seriously especially as they relate to minute differences, it is
gratifying that three universities in Hong Kong have been placed among the top
10 in Asia [4], and individual programmes have been rated as number one in the
Asia-Pacific [5]. Students from some of the most prestigious universities in the
world come on bilateral exchange or to enrol in our courses [6]. In many ways,
the best universities in Hong Kong are already players on the global stage.
2.2 Our universities must compete globally in part because our graduates are
launched into careers in the global economy. They vie with graduates (of both
Hong Kong and overseas origin) from the leading universities of the world for
the most desirable jobs; once launched into these careers, they have to work side-
by-side with graduates from around the world, and be judged against them. Our
graduates have done well, at least in Hong Kong, but increasingly their horizon
must stretch beyond the confines of a single city; their academic credentials will
have currency abroad only to the extent that their alma mater enjoys reputation
worldwide.
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2.3 Research universities in particular must have a global perspective, for the
advancement of human knowledge is a universal endeavour.
2.4 But the global competition in higher education concerns more than the
professoriate and the students. The way forward for higher education is
inseparable from the future of the community as a whole. With the vision to be
one of Asia’s world cities [7], Hong Kong must compete globally in the
knowledge economy, in which the only constant is the certainty of change. The
difficulties besetting Hong Kong – deflation, unemployment and fiscal deficits –
point to an acute need to restructure the economy, so that more knowledge-
intensive jobs will create higher added value. There is no room for complacency:
we either succeed in restructuring, or decline into just another China coastal city.
Very strong universities are key ingredients in this drive, to train the high-level
manpower that is needed, especially postgraduates, and also to attract the best
and brightest to come to Hong Kong.
GOVERNMENT POLICY
2.5 As early as 1993, the then University and Polytechnic Grants Committee (UPGC)
in its Interim Report already urged an outward-looking stance for higher
education in Hong Kong [8]. This recommendation was re-iterated by the
University Grants Committee (UGC) in its 1996 report Higher Education in
Hong Kong [9] (emphasis added):
In our Interim Report we offered three possible scenarios for the future
of our own institutions. With small modifications those scenarios
might also apply to non-UGC HEIs. They were:
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institutions could become indistinguishable from many similar
ones in the neighbouring province;
2.6 In its report Higher Education in Hong Kong (the Sutherland Report) [10], the
UGC in 2002 stressed very much the same points [11]:
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… Our focus is not just local, but also regional and international. …
For higher education in Hong Kong to be internationally competitive,
we will require …
2.7 But going beyond the 1993 and 1996 reports, the UGC this time sounded an
alarm: our competitors are pouring concentrated resources into their premier
universities [12]:
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In one way or another, international competitors have been, or now
are, in receipt of privileged support which is seen as a condition of
competitiveness at the highest levels. The message for Hong Kong is
clear: to aspire to be Asia’s world city is to aspire to compete
internationally in all relevant areas including universities.
2.8 The only way for Hong Kong to stay in this regional and international race is
likewise to focus resources. Thus the Sutherland Report goes on to make a key
recommendation [13]:
SWOT ANALYSIS
Strengths
2.11 The higher education sector in Hong Kong has very good staff and facilities.
The institutions are largely autonomous, free from political and administrative
interference, and therefore responsive to changes in a flexible way. Research
performance, especially in recent years, has been remarkable despite the limited
resources available. The entire system is open to and benchmarked against the
rest of the world.
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2.12 For CUHK, our particular strengths lie in tradition, excellence in teaching and
research, as well as a comprehensive offering. Some of these attributes we share
with the other two research universities in Hong Kong.
Weaknesses
2.13 Hong Kong spends a pitiable percentage of its GDP on research and
development; the best estimates range from 0.3% to 0.5%, substantially below
the 2% to 3% range common in knowledge-driven economies. Until this
situation is improved, there is little hope for universities in Hong Kong to move
into the top tier. Secondly, student recruitment, especially at the undergraduate
level, is still largely confined to Hong Kong itself. Until the catchment area is
enlarged, development will also be constrained. Finally and most directly
relevant to the task at hand, our institutions are not large enough (as will be
argued in detail in the next chapter) to enjoy economies of scale or to command
critical mass. We therefore do not project a strong image or exert a strong
influence outside Hong Kong, which in turn impacts student recruitment from a
wider area.
Opportunities
2.15 The greatest opportunity is the rapid economic development in China, and the
benefits that accrue to Hong Kong. The higher education sector has the chance
to become the premier provider of high-level manpower and the knowledge
engine for the country, or at least for the southern part. Again, with reference to
the task at hand, there is now the opportunity to build a very strong university
through integration. It is of course for the Task Force to examine the pros and
cons; but if the assessment should turn out to be on balance positive, this
opportunity would not come again.
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Threats
2.16 The rapid economic development of China and its universities is itself a
challenge to universities in Hong Kong. With a high rate of growth in GDP and
in government revenue, and with a significant part of education and research
resources being preferentially channelled to a very small number of universities,
and most importantly with a rightly confident and aggressive attitude in these
institutions, the threat is real that universities in Hong Kong, if they all continue
on their present paths, will soon be overtaken. If one were to identify the top
five universities in all of China in 20 years’ time, will any Hong Kong institution
be on the list? Unless drastic action is taken, the answer is likely to be no,
simply because one cannot compete with the concentration of national resources
when the gap in per capita GDP narrows. And if the answer is no, then Hong
Kong’s aspiration to be one of the leading world cities of Asia may also be
jeopardized. This consideration, more than any other, gives a sense of urgency
to the matter at hand.
2.18 To create an institution at such a level would be no easy feat: 20 or even 10 years
ago, this goal would have been a pipe dream. But the phenomenal progress of
the higher education sector in the past decades has now put this goal within
reach – if only the community would focus its attention and resources upon what
it regards as important.
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improvements. Bold decisions need to be made, and made in concert by all stake
holders – upon hard facts and objective analysis that it is the duty of the Task
Force to supply.
CONCLUSION
2.20 Global competition, both for Hong Kong as a whole and for our universities,
gives us no choice but to aim for a small number of institutions that can compete
internationally. How this goal is to be achieved, whether institutional integration
is one option, and indeed whether CUHK should be among these nascent
flagship institutions are matters for discussion in the rest of this Report.
____________________
[1] For example, among CUHK staff are members of the Chinese Academy of
Sciences, Academia Sinica Taipei, the European Academy of Sciences and the
Euroasian Academy of Science.
[2] For example, in engineering there are nine fellows of bodies such as IEEE, IEE
and ACM. Colleagues in medicine hold over 100 fellowships in various Royal
Colleges.
[3] For example, one CUHK staff member is among the 10 most cited mathematical
scientists in the world; see Science Watch, 13(3), May/June 2002.
[4] Asiaweek, 20 June 2002, pp. 38-53.
[5] Asia, Inc. ranked the CUHK MBA as number one in the Asia-Pacific in 2002.
Financial Times ranked the CUHK EMBA as number one in Asia in 2001 and
2002, and within the top 20 globally. HKUST has also won good regional
rankings.
[6] Notable examples of CUHK bilateral exchange partners include the following.
North America: University of California (system), Chicago, Columbia, Cornell,
Illinois (Urbana-Champaign), North Carolina (Chapel Hill), Pennsylvania,
Washington; British Columbia, Toronto, Western Ontario. Europe: Copenhagen,
Sciences Po, HEC-Paris; Bonn, Heidelberg, Humboldt; Lund, Stockholm;
London Business School. Asia-Pacific: Fudan, Peking, Tsinghua, Taiwan; Keio,
Kyushu, Waseda; Korea, Yonsei; Melbourne, Monash, New South Wales,
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Queensland. Our International Asian Studies Programme receives students from,
e.g., Brown, Dartmouth, Harvard, Princeton and Yale on their junior year abroad
programmes.
[7] 1999 Policy Address by the Chief Executive, para. 52 “To realise our vision of
Hong Kong as a world-class city …, it is first and foremost necessary to cultivate
and retain a critical mass of talented people.”
[8] University and Polytechnic Grants Committee, Higher Education 1991-2001, An
Interim Report, November 1993, paras. 25-26.
[9] The University Grants Committee, Higher Education in Hong Kong, October
1996, Chapter 29, para. 29.5.
[10] Sutherland, S.R., Higher Education in Hong Kong, a Report of the University
Grants Committee commissioned by the Secretary for Education and Manpower,
2002.
[11] Ibid., Overview and List of Recommendations, and Chapter One, paras. 1.2, 1.3,
1.10.
[12] Ibid., Chapter One, paras. 1.18, 1.19.
[13] Ibid., Overview and List of Recommendations, Recommendation 1.
[14] Legislative Council Brief: Higher Education Review and Rolling Over
the 2001/02 to 2003/04 Triennium to the 2004/05 Academic Year (EMB
CR 3/21/2041/89). See www.legco.gov.hk/yr02-03/english/panels/ed/papers/
embcr3_21_2041_89_e.pdf.
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Chapter 3 Quality and Quantity:
Aspiration for Growth
3.1 The mission of CUHK is to assist in the preservation, creation, application and
dissemination of knowledge by teaching, research and public service in a
comprehensive range of disciplines, thereby serving the needs and enhancing the
well-being of the citizens of Hong Kong, China as a whole, and the wider world
community. CUHK aspires to be acknowledged locally, nationally and
internationally as a first-class research university whose bilingual and bicultural
dimensions of student education, scholarly output and contribution to the
community consistently meet standards of excellence.
3.2 In short, CUHK aspires to quality. It is sometimes thought that quality and
quantity are in opposition, that small is beautiful. A central thesis in this Report
is that this is not the case for a publicly funded comprehensive research
university. One only has to consider the development of CUHK over the last 40
years; without question the quality of staff, students, programmes, research,
facilities and impact have all improved as the University grew in size.
3.3 The reason is simple: it takes resources to achieve quality and excellence. Good
academics are in demand worldwide; to attract them requires not only
competitive salaries, but also good facilities, support for research, opportunities
for interaction with and stimulation by peers from around the world, and a
teaching load that is not onerous, leaving time and energy for reflection,
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scholarship and innovation. All these require resources, as does the provision of
a pleasant campus environment conducive to learning, and a range of support
(e.g., IT facilities, library holdings, student services) that enhances the learning
experience. Therefore one has to first understand how public universities are
funded.
University funding
3.4 The recurrent budgets of tertiary institutions in Hong Kong (with the exception
of the Academy for Performing Arts and the Open University) are provided by
the Government through the UGC. In very much simplified terms, the funding
to each university is calculated by
where the unit of funding is the same for all universities (for students in the same
discipline), without regard to their mission or size. A number of complications
that do not affect the essence of the arguments below can be glossed over: (a) the
unit of funding is different across disciplines and levels; (b) an assumed income
from tuition and other sources is deducted; (c) the research portion is moderated
by performance, but is in any case proportional to institution size, i.e., the
number of students in a broad sense; and (d) other adjustments for performance
are expressed as a percentage of the budget, and are therefore proportional to
student numbers. In short, the above formula captures the essence: a larger
institution will receive proportionately more funding, which can then be
deployed in the pursuit of excellence.
Overseas comparisons
3.5 The same is true in public universities elsewhere. But the situation in Hong
Kong takes a more extreme form: because of the virtual absence of research
funding from other agencies (such as the Ministry of Science and Technology or
its equivalent in most economies), the education funding which scales with
student numbers is the main source of support for universities.
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Economies of scale
3.7 For this reason, quantity translates into and supports quality, and for this reason,
much of this chapter will be about size and quantity, not because quality is
secondary, but because at the level of strategic planning, one should first of all be
concerned with securing the resources and the capacity for quality improvements.
GROWTH OF CUHK
A history of growth
3.8 The history of CUHK has been a story of growth, and indeed of merger. In 1963
CUHK was founded with only 1,375 students (595, 493 and 287 respectively in
Chung Chi, New Asia and United) [1]. By the time the Colleges moved to one
campus in 1972, enrolment had grown to 2,826 [2]. In the academic year 2002-
03, the student number stands at 16,072 headcounts [3], or 14,031 full-time-
equivalent (FTE) students [4]. In the following, we shall refer to CUHK as
having ~14,000 students, since FTE is a better measure of the teaching load.
Over this time, the 10-fold increase in numbers, together with more favourable
funding per student, the advancement of Hong Kong as a modern city, visionary
University leadership and the dedication of the staff, have propelled dramatic
improvements in quality, standards and reputation. Professional schools in
engineering and medicine have been established, and research has moved from
the periphery to the core.
3.9 A thesis that the Task Force needs to study is whether advantage would be
gained from further expansion – either by natural growth or by institutional
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integration; in other words, whether the present size of CUHK is less than
optimal. We approach this question in two ways: by examining internal numbers
at CUHK, and then by comparing with universities elsewhere.
3.10 Several points need to be stressed upfront. First, even if the optimal size is larger,
it does not necessarily follow that institutional integration is the appropriate route
to growth – this being the issue to be examined next. Second, insofar as the
present discussion is more about size than about specific mergers, the arguments
remain valid if integration with different institutions were one day to be explored
as well. Third, the optimal size relates to the specific context, namely a public
comprehensive research university, given the funding situation in Hong Kong.
We shall draw attention to the pitfalls of simplistic comparisons with universities
in other contexts.
3.11 Figure 1 shows that the number of first-year first-degree places (FYFD) at
CUHK (i.e., the size of each undergraduate cohort) has nearly doubled in 15
years, with rapid expansion up to 1995 and consolidation thereafter. Figure 2
shows that the number of teachers has increased as well. But FYFD has grown
79% (from 1,632 to 2,917) whereas teachers have increased by only 47% (from
566 to 830). This productivity gain contrasts with other education levels and
puts to rest the myth that universities have become lavishly funded.
3.12 Figure 3 shows that the number of undergraduate programmes offered at CUHK
has also increased steadily over the years. However, since 1995, new
programmes have been launched without any additional student numbers
allocated by the UGC, in other words without extra resources from the public
purse. This has only been possible by paring the enrolment (and resources) of
existing programmes almost every year to make way for new offerings. The
University has deliberately and selflessly chosen to do so, to accommodate
emerging and often crucial societal needs. For example, undergraduate
programmes launched since 1995 include nursing, language education, molecular
biotechnology, risk management science and internet engineering.
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FYFD (actual) vs Year
3500
3000
2500
2000
FYFD
1500
1000
500
0
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
Year
1000
900
800
No. of Teachers
700
600
500
400
300
200
100
0
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
Year
3-5
No. of Ug Programmes vs Year
60
50
No. of Programmes
40
30
20
10
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3.13 But there is of course no free lunch: this development comes at the expense of
class size. Figure 4 shows that the average FYFD per programme (as a
surrogate for class size) has declined from a high of nearly 78 in 1994 to 58 in
2002. More seriously, some programmes are below the average size. Figure 5
shows the changes over the years in the number of large, medium and small
programmes (FYFD at 60 or more, between 30 and 59, and below 30
respectively). The number of small programmes – which are certainly not cost-
effective – has increased from a low of 6 in 1995 to 14. These trends point to an
evident and serious loss of economies of scale, and are very worrying.
3.14 Figure 6 shows the average number of teachers per undergraduate programme
offered. The trend is alarming: whereas on average 25 teachers serviced one
programme in the early 1990s, now 17 have to discharge the same task.
Economies of scale have been eroded and colleagues are overworked.
3-6
FYFD/Programme vs Year
90.0
80.0
FYFD/Programme
70.0
60.0
50.0
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3-7
Teacher/Programme vs Year
30.0
Teacher/Programme
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3.15 In the years to come, there will be pressure to launch yet more programmes to
satisfy the needs of society. Yet overall student numbers at CUHK (or at our
sister institutions) are not likely to increase by natural growth. Thus the
problems will only be aggravated, unless bold action is taken.
3.16 Indeed, just about every department or programme at CUHK would welcome
more students, and the university administration is constantly faced with the
thankless and painful task of turning down legitimate and well-justified requests,
simply because there are no numbers to go around. We are confident that if a
50% increase in student numbers (with commensurate resources) were offered to
any CUHK department, the extra numbers would be happily accepted. There can
be no better argument that the present size of CUHK is substantially less than
optimal. We also believe that if planners starting from scratch today to design a
comprehensive research university in Hong Kong were given the choice between
(a) two institutions of 14,000 and 7,000 students respectively and (b) one single
institution of 21,000 students, they would opt for the latter, precisely for these
reasons.
3-8
Obligations of a public comprehensive university
3.18 A public university is obliged to offer every subject within its span that society
demands. The demands escalate as society becomes more sophisticated –
subjects such as internet engineering and risk management did not exist a decade
ago. A comprehensive university in particular has to respond to demands in
every sphere. On several recent occasions CUHK was required by the UGC to
expand certain subjects to supply graduates especially to the public sector, and to
do so without extra student numbers or resources, by trimming enrolments in
other programmes. Private universities, such as many in the US, can pick and
choose their offerings. Moreover, the first-degree course in the US is much more
general, with professional specialization deferred to graduate school. So
especially in elite private universities, many students pursue a broad, liberal
undergraduate curriculum, and the number of majors offered, as well as the
number of required courses within each major, could be less than the case at
CUHK.
3.19 For these reasons, it would be fallacious to point to small prestigious private
universities in the US and argue that size is not necessary for quality in the
context of public universities in Hong Kong. This theme is further developed
below.
SIZE COMPARISONS
Student numbers
3.20 The present size of CUHK can also be benchmarked externally. Reference is
made primarily to the US, which has the most diverse spectrum of universities,
including without question some of the best in the world; data are also most
readily available. The top 50 universities in the US are chosen as the reference
sample [5], in order to reveal clues as to what makes an excellent university.
3-9
3.21 Figure 7 shows the distribution in size of this sample. First, good public
universities are larger than good private universities (medians in the sample
being ~24,600 and ~10,300 respectively). The smallest prestige institutions are
private, such as Caltech with under 2,000 students and Princeton with about
6,500, while the largest ones are public. One reason for this contrast has already
been alluded to: public universities tend to offer a wider range of programmes.
Another reason lies in the source of funding: prestigious private universities in
the US derive significant incomes from their endowments [6] and very high
tuition fees [7], and therefore need not rely on economies of scale. (All top US
universities, public or private, also receive huge federal research grants [8].)
3.22 It is evident that CUHK (~14,000 students) is small compared to top public
universities in the US (median of ~24,600 and lowest quartile of ~18,700 in the
sample). It is true – but for the reasons indicated above irrelevant – that CUHK
is not small in relation to top private universities in the US.
3.23 CUHK is also small compared to Peking University (~21,000 students) [9] and
Tsinghua University (~20,000 students) [10], likely to be our most formidable
national competitors. Other regional competitors include Taiwan University
(~27,000 students) [11], the National University of Singapore (~32,000 students)
[12], Tokyo University (~28,000 students) [13] and National Seoul University
(~32,000 students) [14].
Staff-student ratios
3.24 The staff-student ratio (SSR) is a commonly used indicator of the academic
staffing level. An SSR of 10 would be extremely favourable in the present age,
whereas an SSR above 20 or even 25 would indicate either a low level of
provision or very high efficiency. The SSR, or more precisely its reciprocal, is a
good measure of the cost of education, expressed in a manner that largely
removes differences in the cost of living and hence the cost of hiring each
teacher. To provide a perspective, CUHK has ~14,000 students on an FTE basis
and ~830 teachers [15], for an SSR of ~17.
3.25 Figure 8 shows the SSR versus student enrolment in thousands for the top 50
universities in the US. Public universities are on the whole larger and have
3-10
Figure 7 Distribution in size (as represented by student number) of the top 50 US
universities. Public and private universities are shown separately.
Figure 8 The staff-student ratio (SSR) versus the student number of the top 50 US
universities. Public and private universities are shown separately.
3-11
higher SSRs, while private universities tend to be smaller and have lower SSRs.
The overall trend confirms the intuition that there could be efficiency gains when
size increases. There are however too many confounding variables to justify a
more refined analysis.
3.26 This graph demonstrates a range of models for excellent universities, and two
extreme ones on the continuum may be described as:
(a) small universities (say size of ~10,000) that are expensive on a per-student
basis (say SSR of ~16), or
(b) large universities (say size of ~30,000) that are relatively inexpensive on a
per-student basis (say SSR of ~21).
3.27 It is generally difficult (more precisely it would not accord with the trend line) to
operate an excellent university that is both relatively inexpensive and small.
Role models
3.28 The two possibilities described in paragraph 3.26 can be stated vividly as two
different role models for universities in Hong Kong: a small private university
such as Yale for example, or a large public university such as the University of
California at Los Angeles (UCLA). The broad parameters using 1996/97 or
1995/96 data are as follows [16]:
3.29 Since the possibility of institutional integration in Hong Kong was first publicly
mooted in October 2002, views (which we regard as uninformed) have been
expressed in the media citing the small but prestigious private universities in the
US to argue that size is not a prerequisite for excellence. We have already
3-12
explained why private universities in the US are not appropriate benchmarks.
The two examples here underscore this point quantitatively. Table 1 shows that
the small elite private university, if it is to achieve excellence, requires very high
unit costs – something like two to three times the level enjoyed by CUHK. Thus
we have to reject it as a role model, not because these institutions are anything
other than truly distinguished and admirable, but simply because we cannot
afford to emulate them. On the other hand, the large public university in the US,
though still somewhat more expensive than Hong Kong institutions, is a more
realistic role model – but this model requires a substantially larger size. In any
event, both models require two to three times the total resources at CUHK’s
disposal.
3.30 These role models demonstrate that to have a chance at excellence, Hong Kong
institutions must have either a much higher unit of funding or a much larger size.
The size of a small private university coupled with the unit of funding of a large
public university cannot easily achieve excellence.
3.31 This point is so central that it is worth re-stating in a slightly different way. First,
for the sake of the entire community, the higher education sector in Hong Kong
cannot stay with the status quo; we must improve, and do so rapidly. If that is
the case, then there are only two choices:
(a) substantially increase the unit of funding for at least one university; or
(b) substantially increase the size of at least one university.
ECONOMIES OF SCALE
3.32 The analysis presented above is essentially one of economies of scale: a larger
university requires less input per student to achieve the same acceptable band of
quality (e.g., within the top 50 US universities). In this section, we examine two
further issues: (a) assumptions about the deployment of the resources that could
be freed up through efficiency gains, and (b) a rough order-of-magnitude
estimate on the likely scale of these freed-up resources, with particular reference
to a hypothetical integration of CUHK (~14,000 students) with HKUST (~7,000
students).
3-13
Deployment of freed-up resources
3.33 When there are efficiency gains, one could either achieve the same output with
less input, or achieve better (or more) output with the same input. The first
option implies, in the present discussion, that freed-up resources are to be clawed
back by the Government, while the second implies that resources are to be
retained for quality improvements.
3.34 The Task Force has unequivocally assumed the latter – not because we belittle
the financial difficulties faced by the Government at this juncture, but because
we are convinced that elevating the standard of universities (or at least of one
flagship university) is one of the keys to the restructuring of Hong Kong into a
knowledge economy, and thus one of the factors that will, albeit only in the
longer term, contribute towards economic growth and thereby help to restore
fiscal health. We are hopeful that our political leaders have the wisdom to share
the same vision; indeed the Secretary for Educational and Manpower has been
quoted as saying that institutional merger is not proposed to cut costs, but to
improve quality [17]. Nevertheless we would welcome an official Government
statement to this effect.
3.35 The HKUST report on this issue [18] has likewise asked a fundamental question
about the objective of the proposed merger. We believe that neither university
would be willing to consider integration for any purpose other than the
improvement of quality and global competitiveness.
3.36 In the midst of the Task Force’s deliberations, it became apparent, with an
abruptness that is perhaps surprising, that Government policy to deal with the
very serious fiscal deficit will place unprecedented pressure on university
funding over the next few years. Even though this difficulty should be regarded
as temporary and should not affect long-term planning, budgetary stringency
does add urgency to measures that could produce efficiency gains.
3.37 It would be useful to have some order-of-magnitude estimates on the likely scale
of the efficiency gains, assuming a merger between CUHK and HKUST.
3-14
3.38 The largest efficiency gain would be in academic departments, simply because
increased student numbers in the same programme can be accommodated by
larger lecture classes rather than proportionately more teachers. An efficiency
gain of 10% would seem to be a reasonable working hypothesis [19].
3.39 Two administrative sectors were also studied in a very crude way. The CUHK
Library estimates that journal titles duplicated at CUHK and HKUST cost about
HK$10 million per year for each set, out of a total journal spending by the two
institutions of about HK$50 million per year. After allowing for the price of e-
journals to increase with institution size, one could hope for say 15% of the
journal budget to be saved [20] and deployed for other uses. The Personnel
Office estimates, based on an internal Management Efficiency Review conducted
a few years ago, that 25% of its work is policy-related (which to a first
approximation would not scale with size) and 75% is case-related (which would
scale with size). Thus, a hypothetical merger might free up about 15% [21] for
other uses. It is sometimes said that a combined institution can be served by one
administration instead of two, with 50% savings. Such statements are naive.
3.40 Other items would see less efficiency gains, for example campus maintenance.
There could also be additional costs, e.g., transport between two campuses, or an
added layer of administration in a federal model of integration (see Chapter 6).
The Task Force is not the appropriate party and now is not the appropriate time,
ahead of decisions-in-principle, to attempt a detailed analysis, but since teaching
is the largest component of cost in a university, it seems not unreasonable to
hope for an efficiency gain of up to 10% overall. This number is offered only to
indicate that one is not talking about gains of merely 1% to 2%. Moreover, this
estimate refers to the steady state (not reached for some years), and there could
be very heavy transitional costs.
3.41 We have to caution that the accounting for the amount of resources freed up (or
efficiency gains) could be subtle, and depends on the level of aggregation at
which the accounts are viewed. As an example, suppose HK$10 million saved
by eliminating duplicate journals is used to support additional student exchange.
The University administration would see the HK$10 million explicitly as
resources saved from one sector and deployed to another. However, the
Government or an external party viewing the University as a whole would see
the total expenditure unchanged, with apparently zero efficiency gain – that
3-15
would of course miss the point. As a second example, suppose there are two
identical departments in the originally separate institutions, and that each has 20
teachers, 300 students, and offers 40 courses (2 courses per teacher on average).
The two departments merge, and over a number of years the staff strength is
allowed to diminish by natural attrition from 20 + 20 = 40 to 35. The university
administration would see 1 – 35/40 = 12% staff salary freed up, which could be
deployed for other uses. But the combined department certainly does not need to
offer 40 + 40 = 80 courses; suppose it offers 60 courses instead. The average
teaching load becomes 60/35 = 1.7 courses instead of 2 courses per teacher,
implying time freed up for say research. This may be quantified as an
additional (1 – 1.7/2.0) = 15% efficiency gain, which is not apparent at the level
of the university as a whole. No attempt need be made for a detailed analysis,
except to say that there could be significant additional benefits over and above
the efficiency gain readily identified at central university level as dollars and
cents.
3.42 It may be useful to give some numbers and examples to illustrate, in very rough
terms, what a hypothetical 10% efficiency gain might mean. The two institutions
have a combined annual budget of ~HK$5 billion, so 10% translates into
~HK$500 million that could hypothetically be deployed for other uses. Without
in any way implying that these are the priorities, we give below some examples
of possible improvements and their likely costs, to calibrate against the sum
mentioned above.
3.43 Efficiency gains free up resources. But the Task Force is conscious that
resources do not equate to and do not guarantee quality – with the wrong policies,
3-16
resources could be squandered. But resources freed up do create the capacity for
improvements, in exactly the same way as additional allocations do. We believe
this is one of the most powerful arguments for expansion – whether by natural
growth, for which there is relatively little cost, or by institutional integration, for
which the heavy transaction cost will have to be carefully assessed.
Leveraging
3.44 There will also be opportunities for leveraging upon any resources freed up. For
example, many external grants and increasingly also donations demand internal
matching; freed-up resources could come in. Moreover, there is the hope of
entering a virtuous cycle of resources leading to improvements, which then
generate more resources through performance-based allocation and from
benefactors keen to support excellence.
3.45 Most importantly, on account of the improvements achieved out of this capacity,
or indeed already on account of the capacity itself, such an institution will rightly
claim to be a flagship university in Hong Kong and thus be in a position to
receive the focused public and private sector support promised by the UGC in its
2002 report Higher Education in Hong Kong.
CRITICAL MASS
3.46 Another powerful argument for a larger university can be summarized in two
words: critical mass, namely that there are certain things that a large institution
can do better.
Diversity of offering
3.47 A small department has the resources to teach only the core of each subject.
Two such departments give an illusion of diversity and choice, but in reality
would offer much the same core courses and little else, whereas a larger merged
department can offer a more diverse menu. For example, two relatively small
business schools in Hong Kong would probably both focus on China business,
but cannot cover say Southeast Asian business; a merged school would have the
resources for the latter as well. Two relatively small economics departments
3-17
would not offer say health economics, which, though important in Hong Kong at
this time, is not in the core of economics as a discipline; a larger merged
department would be able to do so.
3.48 There is the need for large and inter-disciplinary teams to do research these days,
and to train students in interdisciplinary approaches. This argument is stronger
in the more technological areas (science, engineering, medicine) and less so for
the humanities. In a situation that parallels course offerings, two relatively small
departments would duplicate core equipment but lack those of secondary
importance; a larger merged department can have just one set of core equipment,
and deploy the savings to acquire secondary facilities.
Recruitment of staff
3.49 CUHK faces some difficulties in recruitment, because in each research specialty
we can only afford one to two teachers, often not enough for a credible team. A
larger institution with larger departments would be much better able to recruit.
3.50 A larger university will have better recognition and impact, and would be better
able to compete at least regionally. The difference between perceived and actual
quality (especially outside of the primary home market and among less informed
parties who nevertheless matter) is irrational but real, and should not be
discounted.
CONCLUSION
3-18
3.52 Any discussion at this level is necessarily focused on numbers and on resources.
What one does with those resources is a separate matter, and will be discussed in
Chapter 5.
____________________
[1] Number as at 1 October 1963; data from Senate paper, The Chinese University
of Hong Kong.
[4] Since there is no standard formula for conversion to FTE for self-financed
programmes, we have simply used a uniform factor of 1 part-time student = 0.5
FTE.
[7] Typical tuition fees are US$30,000, which alone would be comparable to the
average unit cost for higher education in Hong Kong (~HK$235,000, estimated
using the 2000-01 UGC recurrent grant of ~HK$13.3 billion for ~68,800
students, assumed to account for 82% of cost, the other 18% being tuition). The
error is sometimes made, both by casual observers and by those who should
know better, of comparing US tuition costs with Hong Kong total costs. In
private US universities, tuition is only a small portion of the income.
3-19
[8] For example, MIT has a total R&D expenditure in science and engineering alone
of US$400 million in 1998 (see, e.g., presentation by K.F. Koster, Director of
Corporate Relations, MIT, 11 June 2001, Amsterdam, Holland). In comparison,
the total research grant available to all universities in Hong Kong is about
US$100 million (RGC of ~HK$500 million, ITF of ~HK$200 million, plus a
number of smaller schemes).
[16] Liu, P.W., “Comparison of Unit Costs: Universities in Hong Kong and the US”
(unpublished), 2001. Raw US data are taken from the Integrated Postsecondary
Education Data System, nces.ed.gov/ipeds/data.html. Only 1995-96 data were
available at the time the report was compiled. Hong Kong data are taken from
UGC tabulations. More recent data are not readily available, but would show
similar trends.
[18] Exploration of the Idea of a Merger Between the Hong Kong University of
Science and Technology and the Chinese University of Hong Kong, Report of
the Task Force established by the President in consultation with the Council
Chairman of the Hong Kong University of Science and Technology, November
2002.
[19] This would be broadly consistent with the rule-of-thumb adopted internally at
CUHK: increases in student load are resourced at a marginal rate that is 0.75 of
the average value. If this is applied to the institution as a whole, then a 50%
increase in numbers (from 14,000 to 21,000) could be serviced by 37.5% more
resources, giving an efficiency gain of (1 – 1.375/1.50) = 8%.
[20] The University Librarian reported two estimates of the cost of duplicate journal
titles: HK$8.64 million and HK$14.0 million, using two different methodologies.
3-20
A conservative estimate of HK$10 million is therefore adopted. Some HKUST
numbers are estimated, assuming the same pattern of usage of library funds as in
CUHK. Duplication in book titles would be smaller, because the universe of
books is larger.
[21] The estimate proceeds as follows. The policy load at CUHK is say 0.25 units,
the case load 0.75 units. The policy load at HKUST is assumed to be also 0.25
units, and its case load 0.75 x (7000/14000) = 0.38 units. So the two separate
institutions would have a total personnel load of (0.25 + 0.75) + (0.25 + 0.38) =
1.63 units. The hypothetical merged institution would have a policy load of 0.25
units, and a case load of 0.75 + 0.38 = 1.13 units, for a total personnel load of
1.38 units. The savings would be (1 – 1.38/1.63) = 15%. Of course, policy
work does increase somewhat in complexity for a larger institution, but on the
other hand, case load also has some economies of scale: it does not take twice
the effort to recruit two clerks compared to one.
[23] Total one-line budget of the CUHK Office of Student Affairs is HK$21 million.
We assume corresponding expenditure at HKUST to be HK$10 million (roughly
scaling with student number), so that the total cost for student services is
~HK$31 million.
[24] Total cost for CUHK intra-campus transport is HK$4 million per year.
[26] Assume total academic staff strength of 1,400, and an average salary of HK$1
million per year.
3-21
Chapter 4 Alternatives
4.1 In the course of the consultation hearings, it was suggested that the University
should instead consider other avenues for improvement, and in particular other
avenues for seeking resources for improvement. While these suggestions have
considerable merit, the Task Force believes that they do not materially alter the
case for or against integration. Chief among the many reasons is the limited
potential; more importantly these other strategies should be pursued in addition
to and not instead of possible integration.
LIMITED POTENTIAL
4.2 It has been suggested that the University should seek donations for an
endowment, research grants, commercial income from technology transfer
activities, or income from operation of non-local programmes. One short answer
is that the potential in any of these areas is limited, given the circumstance of
Hong Kong. Many commentators (including public officials) fail to understand
the constraints, and are too ready to blithely assume that these sources will bring
significant additional revenue to Hong Kong universities.
Donations
4.3 CUHK is very fortunate in having the generous support of many benefactors in
the community, including many alumni. In recent years, the donations received
annually amount to about a few percent of total expenditure. Much of this is
designated for buildings and scholarships; only a small fraction is unrestricted,
and an even smaller fraction can go into building up an endowment. As the
alumni body gets larger and more mature, and as the reputation of CUHK grows,
there is little doubt that CUHK will enjoy even more community support.
4-1
Nevertheless, there is no way for CUHK to raise an endowment whose income
could account for a sizeable percentage of its budget. There are many factors
beyond the University’s influence: the very weak tax incentive, the ease with
which estate duty is legally circumvented in Hong Kong, the Chinese tradition
of preserving and passing family fortunes on to the next generation, as well as
the attraction of the mainland for donations (the greater need, the allegiance to
ancestral villages and communities especially on the part of the older generation,
the ability to achieve much more for the same dollar amount, as well as business
connections that may ensue).
4.4 These factors make it essentially impossible for CUHK (or any Hong Kong
institution) to emulate the likes of Harvard and Princeton in raising sizeable
endowments. For example, Princeton’s endowment is about HK$50 billion,
equivalent to several hundred years’ donations received by CUHK, even
assuming all the donations were to be channelled into endowment and not spent.
It should not be forgotten either that fund-raising by these private institutions is
tied in subtle ways to student admission, a practice that would not be acceptable
in a public university. Indeed, even in the US, no public university is able to
command the level of endowment enjoyed by the Ivy League institutions. It also
should not escape attention that among the thousands of private universities in
the US, only a very small number are able to attract significant endowments.
Research grants
4.5 The best universities in many parts of the world attract very significant research
grants to support their activities, and it has been suggested that CUHK should do
the same.
4.6 CUHK is already doing very well in this area, typically running first or second
among all Hong Kong institutions in the amount of grants received from
agencies such as the Research Grants Council (RGC), the Innovation and
Technology Fund (ITF) and the Quality Education Fund (QEF). In a typical year,
CUHK would capture anything from 1/4 to 1/3 of these grants – a very credible
performance given eight universities of which three are research-intensive, and
especially when CUHK spans subjects (e.g. the humanities and social sciences)
that by their nature do not usually attract very large grants. The total amount
4-2
received from research grants is typically a few percent of the University’s
expenditure.
4.7 Since CUHK already attracts a disproportionate share of all research grants
available, the room for growth will be very modest. In fact, there is one over-
riding constraint, already mentioned in Chapter 2: Hong Kong spends only 0.3%
to 0.5% of its GDP on research and development, versus 2% to 3% in most
knowledge-intensive economies. Moreover, in most of these economies these
resources are heavily concentrated in a small percentage of universities. In the
US, the bulk of research funding is concentrated in ~50 research-intensive
universities out of a total of ~3,000 colleges. In Hong Kong, the ratio is 3 out of
8.
4.8 Research grants in Hong Kong, unlike those in many other systems, only pay for
the marginal costs of research; space and infrastructure, a portion of the salary of
the professor reflecting time spent on the project, utilities and administrative
overhead are all excluded. Because of this situation, every research grant
secured actually means extra net expenditure rather than net income.
4.9 The Executive Council of the HKSAR Government has recently ordered that
Government agencies should pay full costs for research conducted in local
universities, but this is not likely to result in rapid or substantial changes. In any
event, since the total research budgets of these agencies are for all practical
purposes fixed, payment of full costs will not result in more income to
universities, only in fewer projects being funded, each at a higher level.
4.10 Overseas alumni have suggested that CUHK should tap into major national
research projects. We are happy to report that CUHK staff have already won
four “863” grants as principal investigators, the first such cases since this scheme
was opened to application from Hong Kong. However, the terms of the grant are
such that funds can only be used for activities on the mainland. This is only
reasonable, as Hong Kong does not pay national taxes under “one-country, two-
systems”.
4-3
Technology transfer
4.11 CUHK has generated some income in recent years through the exploitation of its
inventions. The sums generated annually are modest, in part because of the
small local market and the near absence of high-tech industries and venture
capital in Hong Kong, and because of the low level of research funding, which is
in the end the foundation upon which inventions are based. In fact, with very
few exceptions, no university anywhere generates any significant income from
technology transfer. The best that one can realistically hope for is to cover part
of the direct cost of commercialization (legal fees, patent costs, marketing costs)
and provide a small incentive to staff.
Non-local programmes
4.12 CUHK has begun to offer a number of programmes outside of Hong Kong, and
these have been extremely successful in expanding the reach and enhancing the
reputation of the University. The University is firm in the belief that these must
be the primary motivations, with revenue generation only a by-product; in some
cases, where there is a strong justification, the University will even inject private
funds at its disposal, so that in sheer monetary terms the endeavour may well
carry a loss, at least in the short term. The University will not sacrifice academic
standards for income, and does not expect to raise any significant net amount
from these programmes.
Extra students
4.13 It has also been suggested during the consultation hearings that CUHK could
consider taking in extra students on a self-financed basis in order to generate
income. The total annual expenditure of CUHK is over HK$3 billion, translating
into an average cost of at least HK$200,000 per student; it is unlikely that the
true marginal cost is less than HK$100,000 on average. Unless one could charge
tuition at this level, any large-scale recruitment over and above funded student
numbers would imply cross-subsidy and overall erosion of quality. A small
over-enrolment can however be considered in certain subjects (e.g. business,
clinical medicine), provided (a) the Government agrees that the extra tuition
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income can be retained, and (b) such recruitment is restricted to non-local
students to avoid controversial back-door entry by wealthy local students.
4.14 Moreover, it must be recognized that there is already very strenuous existing
effort in all these directions, and unless one is to believe that there are gross
inadequacies, these avenues for generating income must be already well
exploited, so that the room to generate additional resources cannot be large.
This is not to say that further efforts should not be expended, but only that hopes
should not be unrealistically pinned on such avenues.
4.15 Other institutions have of course embarked on the same paths, so pursuing these
initiatives cannot give us much competitive advantage.
4.17 But finally, the most important point is that there is no mutual exclusivity: all
these other avenues for raising resources should be and will be vigorously
pursued whether or not there is integration. In this sense, they are not
alternatives to integration, and should therefore be set aside in weighing the
pros and cons of going forward with institutional integration.
4.18 The same goes for improvements in areas not related to resources: improving
efficiency, improving teaching, recruiting better staff, rewarding good
performance, reaching out to establish better academic links – all these are
pursued already to the utmost extent possible, which means that additional
improvements can only be slow and incremental. But most importantly all these
will be vigorously pursued whether or not there is integration.
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MUTUAL REINFORCEMENT
4.19 But in one sense many of these other avenues of improvement are not just
parallel and independent efforts; at least in some cases, they could find mutual
reinforcement and synergy with institutional integration. The most obvious
would be in research grants and technology transfer, both of which could be
improved if CUHK were to merge with another research-intensive university and
thereby achieve critical mass. Research grants from industrial and non-local
sources should in particular benefit. Another area is private support that would
be focused upon any university that stands out (as suggested by the Sutherland
Report) – and the strength of a merged institution might be one way of achieving
that status.
GOVERNMENT POLICY
4.20 It was also suggested that CUHK should seek expansion, and the associated
resources, through the natural growth of the university sector. But according to
Government policy, there will be little expansion for universities, with extra
student numbers going predominantly into community colleges.
4.21 There is also a suggestion that the Government should be persuaded to alter its
funding formula, so that CUHK could be awarded more resources without
necessarily having more students. The Task Force believes that this is unrealistic,
except in a context where CUHK itself is seen to be making extra and unique
efforts at improvement.
INCREMENTAL CHANGES
4.22 There is also the possibility of not taking any forceful action at all, relying only
on incremental changes as the University has done over the last 40 years. If
there were no competition, this would be a viable option. But when others,
especially the key universities on the mainland in China, are making dramatic
progress as a result of reform and concentrated resources, CUHK will almost
certainly be overtaken – and Hong Kong also faces the threat of being overtaken
by major cities in China.
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STATUS QUO
4.23 A view has also been expressed during the consultation that CUHK should not
aspire to further advances towards excellence, but should be content with the
status quo. We believe this suggestion is not worthy of the ideals of the
University, and must be rejected outright.
4.24 In response to data given in the consultation paper which indicate that the
average size of programmes has been eroded over time, several commentators in
the consultation hearings suggested that CUHK should accept that it does not
have the size to be truly comprehensive, and should therefore eliminate certain
programmes in order to achieve critical mass in the rest. The University may
indeed be forced to consider this route if growth in any form is not possible and
funding becomes very tight. It would however be a very painful option, more
painful than the vexations associated with institutional integration. In any event,
consolidation of programmes would not alter the fact that CUHK will have only
~14,000 students.
____________________
4-7
Chapter 5 Goals
This chapter examines whether and how the goals of CUHK are
helped or hindered by institutional integration. Given present
constraints, the primary goal – a fundamental advancement in
standards in a relatively short time – cannot be realized without
integration with a partner of comparable strength. Apart from
efficiency gains releasing resources for the pursuit of the University’s
goals, the specific effects of a hypothetical integration on individual
goals are also considered.
5.1 In Chapter 3 we studied the benefits that would accrue to the University from
having a larger student body and the attendant resources. Here we consider more
specifically the goals that CUHK wishes to pursue, and how these might be
affected, for better or for worse, by integration with another institution.
PRIMARY GOAL
5.2 The goals of CUHK in education, research and service to the community cover a
broad range. Without going into details, the primary and indeed urgent objective
at this time is to make a fundamental advance in quality and reputation, in order
to consolidate our position as one of the leading universities of the region. We
have argued in Chapter 2 that this goal is important not only to CUHK itself, but
also to Hong Kong as a whole.
5.3 Over the last 40 years, CUHK has achieved fundamental improvements in
quality, by a series of small increments that accompanied the growth in student
numbers and the improvements in funding. If we could afford another 40 years,
if student numbers would increase gradually and if public funding were to
continue in an upward trend, then another series of incremental improvements
would no doubt lift quality to the next level. But global and regional competition
does not give us the luxury of time; many institutions in Asia will surpass CUHK
if decisive action is not taken soon. Moreover, student numbers are not likely to
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increase significantly, the energy and resources of the community being now
channelled to the community college sector. Public funding is also under severe
pressure, at least in the medium term.
5.5 More specifically, we examine in more detail how institutional integration would
(or would not) help with the attainment of individual goals. For simplicity, we
consider only the case of a full merger into a unitary institution (see Chapter 6),
with all effects (positive and negative) diluted for a partial or evolutionary
integration.
INDIRECT EFFECTS
5.6 Chapter 3 has already argued that integration will lead to efficiency gains and
therefore free up resources (perhaps to the tune of 10% in the steady state); these
resources, if appropriately deployed, will make it easier to achieve the
University’s goals, whatever these might be.
DIRECT EFFECTS
5.7 To consider the more direct impact on CUHK’s goals, we refer to the Ten-Year
Vision Statement adopted by the University in 2003. The main points in that
statement are summarized below, with a commentary on the likely effect that
institutional integration will have on each of these goals. To be definite, HKUST
is taken to be the hypothetical partner.
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Goals Commentary
Attract best local students Positive: merged institution will have
better reputation.
Negative: the excellence of intake of
CUHK may be compromised, especially if
intake numbers are increased.
Attract best non-local students Very positive: better reputation outside of
Hong Kong.
Quality of teaching Concern: whether excellent CUHK
tradition can be preserved.
Specialist education Positive: larger institution can offer wider
spectrum of subjects.
General education Slight concern: whether long and
excellent tradition of CUHK might be
diluted; college system will help to
enhance general education.
Good careers for students Slightly positive: stronger institution will
have better reputation; larger institution
will enjoy wider network.
Bilingual and multicultural dimension Concern: tradition and values of CUHK
may be diluted; but better international
reputation and outreach should help
multicultural diversity in student mix.
Offer broad range of programmes (both Positive: larger institution can offer wide
subjects of intrinsic value and subjects menu.
that respond to market needs)
Programmes to be among best in Hong Positive: more likely to achieve quality
Kong because of critical mass.
Some programmes should achieve Very positive: adding strength to strength.
regional and even global recognition For example, the combined MBA
programme will be unrivalled in Asia.
Offer programmes outside Hong Kong Very positive: critical mass needed in
these ventures.
Postgraduate programmes Positive: larger enrolment, better research
coverage.
Normative length Neutral
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Non-formal education, services for Serious concern: personal care may be at
students risk in a larger institution; need to be
addressed in any institutional integration
plan;
but college system will solve many
problems.
Lifelong education Neutral
Student body more diverse Positive: size allows better negotiation
with exchange partners; merged institution
better known outside Hong Kong.
Research Very positive: critical mass; HKUST has
good research standards.
Chinese culture Concern
Collaboration and alliances Achieved
Governance and management should be Serious concern if a mix of two systems,
effective but opportunity for major improvement if
redesigned for new institution.
To be one of the leading universities in Very very positive
the region
CONCLUSION
____________________
5-4
Chapter 6 Models of Integration
This chapter considers two issues: (a) the nature of the proposed
integration and the objectives that are targeted, and (b) the different
degrees of integration. It is suggested that the only scenario worthy of
further exploration is a federation leading to a full merger.
6.1 University integration takes many different forms, each with a different nature
and a different set of objectives.
6.2 In many ways, the easiest type of merger is that between a comprehensive
university and a typically smaller specialist school, e.g. a medical school, to
round out the former’s subject offerings. There are many examples.
Imperial College with the Royal Postgraduate Medical School and the
Charing Cross and Westminster Medical School in 1997.
Royal Melbourne Institute of Technology (RMIT) with Melbourne Institute
of Textiles in 1999.
Peking University with Peking Medical University in 2000.
Zhongshan University with Zhongshan Medical University in 2001.
Drexel University with MCP Hahnemann University (a medical school) in
2002.
6.3 In these cases, the larger comprehensive university gains a specialist arm –
usually one that is not easy to build from scratch (medical schools being
expensive and agricultural colleges requiring large tracts of land). The specialist
school gains access to basic arts and science, as well as opportunities for a
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broader education for its students. Elite programmes such as the MD-Ph.D. may
also become possible.
6.4 In these examples, the accent is on complementarity. This is not the model
contemplated for CUHK and HKUST.
6.5 There have also been examples where a stronger, larger university merges with
one or more smaller, specialized and less established institutions, possibly
without university status, e.g. community colleges, technical schools or teacher
training colleges. Examples include the following.
6.6 The primary purpose is to elevate the standard of the less established institution.
The benefit to the larger, stronger institution lies only in some possible
economies of scale, but there may not be much opportunity for quality
improvements.
6.7 A possible integration between CUHK and the Hong Kong Institute of Education
(HKIEd) has also been suggested, and would fall into this category. The Task
Force has not considered this possibility, and expresses no views, for or against.
However, because the objectives would be totally different from a hypothetical
integration of CUHK and HKUST, this possibility should only be considered at a
later time, as a totally separate proposal, in order not to confuse the issue and
lose focus.
6-2
Merger between equally strong institutions
6.8 Mergers between two equally strong institutions, each already covering a fairly
broad span of subjects (even though one or both institutions may not be fully
comprehensive) are less common. Examples include the following.
6.9 This type of merger could be more difficult, if only because two strong partners
are more likely to have “personality” clashes. But the potential reward is also
higher – had the Tianjin/Nankai or Imperial/UCL mergers gone ahead, the results
might well have been among the strongest institutions in each country.
6.10 This type of merger, where strength is added to strength in partnership, is the
version being contemplated for CUHK and HKUST. The objectives are to
improve quality and competitiveness, and to achieve critical mass and impact.
6.11 Complementarity, at least in a simplistic sense, is not the prime motivation. For
example, most subjects offered at HKUST are already offered at CUHK (though
the reverse is not true). There is however complementarity at the level of sub-
specialties; for example, the two mathematics departments may have respective
strengths in geometry and computational mathematics. Complementarity at this
level is just as important, but would not be readily discerned by the layman, or
even by fellow academics viewing the scene from a distance.
6-3
6.12 On the contrary, where complementarity does not exist, namely where offerings
overlap, there will be the opportunity to eliminate the overlap and free up
resources.
CHOICE OF PARTNER
6.14 The strategic aim of CUHK is always quality; quantity and size, though
important, are only means to that end. Therefore whenever we look for
collaboration – not only in institutional integration but in whatever form – we
always seek to add strength to strength, working with partners who share our
goals and standards, and in particular our views on the centrality of research.
Within Hong Kong, only two other institutions have roles and missions (as
agreed with the UGC) that are broadly the same as those of CUHK (apart from
subject coverage). Of the two, only HKUST is within a reasonable geographic
distance (even though the separation is large enough to be a matter of concern to
be considered). Moreover, CUHK and HKUST both have relatively broad and
flexible curriculum structures based on the credit-unit system.
6.15 These considerations, though not always made explicit, are of course behind the
decision several years ago to explore and initiate collaborations, and behind the
specific integration proposal now being examined.
6.16 We have noted that other partners need not be ruled out if different objectives
were to be pursued, but those wider considerations are best left to a separate
occasion.
6-4
DEGREES OF COLLABORATION OR INTEGRATION
6.17 Even given two specific institutions, namely CUHK and HKUST, there can still
be many degrees of collaboration or integration. It is important to map out the
distinct possibilities – for which the pros and cons could be quite different. We
shall discuss in turn (and in increasing degrees of tight integration) four different
scenarios:
NO FORMAL RELATIONSHIP
ACADEMIC PARTNERSHIP
6-5
whether, on the contrary, the obstacles could be removed by a more formal
structure.
Intense competition
6.20 Although there are 10 degree-granting institutions in Hong Kong (with eight
under the aegis of the UGC), there is in effect a group of three to which CUHK
belongs, by virtue of the similarity in roles and missions. When there are only a
few players – and especially when these players seek resources and rewards
predominantly from one body in a zero-sum game – there would be little
inclination to collaborate.
6.21 In larger systems with dozens (perhaps even hundreds) of nearly equal players,
the benefits of collaboration are more apparent. This basic structural difference
between large and small communities – rather than any perversity on the part of
Hong Kong academics – makes it very difficult for two independent entities to
be whole-hearted collaborators. Genuine collaboration will only come when
very large carrots are offered, or when a structure is formalized.
6.22 Another factor often escapes attention: the mismatch between cost and benefit.
6.23 Suppose two universities decide to share a lecture course. Teaching load is
reduced, and resources are freed up for other purposes, for example, overseas
student exchange. But those who take the shared course are in general not the
same as those who will go on exchange; so left to themselves, students would not
choose to incur the inconvenience of travelling to another campus in order to
allow others to reap the benefit of overseas exchange.
6.24 Likewise, two departments could decide to share, say, one expensive
spectrometer. Even if the host institution and host scientist (the “owner”) are
entirely fair and magnanimous, users from the other institution would suffer
inconvenience to say the least. The expenses saved in not duplicating the
facilities go to other projects, and are of no direct concern to the spectroscopists.
6-6
FEDERAL STRUCTURE
6.25 If some formal structure is necessary, the next possible level of cooperation
would be a federation, wherein there will be an organizational structure (the
federal university for short) arching over the two constituent institutions.
6.26 CUHK itself went through a federal structure upon the amalgamation of the three
constituent Colleges. For the benefit of those who may not be familiar with the
history, it is useful to highlight at least a few key features. Between 1963 and
1976 [1], there were three Departments of Chinese, three Departments of
Mathematics, etc., and correspondingly three Department Chairmen in each
subject. Over and above the departments would be a Board of Studies in
Chinese or Mathematics as the case may be, headed by a Chairman of the Board.
By the early 1970s, a single curriculum was offered in each discipline, and all
teaching duties were shared. Academic functions shifted to the Boards of
Studies, which later metamorphosed into the University’s academic Departments.
The process was not without complication and sometimes controversy and pain,
but the final outcome, seen from the vantage point of the 1980s and beyond, is of
course positive. A more detailed account of CUHK’s history of merger can be
found in Appendix C.
6.27 A federal union helps to preserve traditions and is less difficult and painful to
achieve (compared with a unitary structure). There would be some cooperation
contributing to critical mass, and some efficiency gains. But these advantages
would be modest: duplicate courses would still be offered on the two campuses;
research teams miles apart would enjoy critical mass more in name than in
substance. The added layer of administration (two departments reporting to a
coordinating board, two university administrations reporting to a federal
administration) would incur cost and compromise flexibility and agility.
6.28 One possibility is to think of a federal model as an intermediate step, with the
authority wielded at the federal level increasing over time. The full benefits of a
merger would be reaped only eventually, but the difficulties could be ameliorated
in an evolutionary process.
6-7
UNITARY MODEL
Evolutionary process
6.29 A sudden merger into one unitary institution might create major dislocations.
We therefore believe that a full merger should only be considered as the final
destination in a relatively slow and evolutionary process of integration, in the
course of which consensus and a common sense of purpose have to be developed.
6.30 However, if it is decided to take this route, then there has to be a clear agreement
and well-formulated plans from the very beginning about the ultimate target and
the time frame for attaining it. Evolution does not mean taking one step before
deciding on the next.
6.31 A suggestion has been made that integration might proceed first in certain
academic areas where the benefits are most evident and the costs least onerous.
For example, a joint MBA programme will be acknowledged to be the
undisputed leader in Asia, and such a joint programme offered in town to part-
time students would not even require relocation of staff. Such pilots could build
trust and support.
Two campuses
6.32 If CUHK and HKUST were one day to become fully merged, there would be one
single university spread over two campuses. Efficiency gains would not be
realized if each department and its activities were also spread over the two
campuses, or if substantial student travel became necessary.
6.33 A suggestion was made during the consultation hearings by one individual (not a
member of the Task Force) to relocate all units to one single campus and to
release the other campus for land sale to recoup the building costs. This
suggestion displays a lack of sensitivity and should be rejected.
6-8
tried a similar arrangement. A suggestion was heard during the hearings that
perhaps one campus could be devoted to research and the graduate school, and
the other to undergraduate studies. However, our students have a more flexible
and varied pattern of course selection, not entirely defined by year of study, with
upper-year undergraduates often taking graduate-level courses and participating
in research. The benefits of research activities and a research atmosphere on the
undergraduate curriculum – key advantages enjoyed by the three research
universities in Hong Kong in attracting the best undergraduates – would then be
lost. Moreover, such an arrangement gives the two campuses the appearance of
a senior and a junior partner, and for that reason alone would probably be
unacceptable.
6.36 This is not yet the time to attempt a more detailed assessment, except to note that
travel for students can be limited to a low level but not completely eliminated,
and that therefore there will be the need to provide transport. More importantly,
students will experience a less rich mix of disciplines in their informal education,
which will inevitably be organized mainly on each campus separately.
Subject profile
6-9
6.38 However, it must not be assumed that the subject profile will be frozen in time.
On the contrary, it would be natural to assume that overly large units will be
allowed to shrink through attrition, releasing resources for small units to achieve
a more appropriate size. The challenge is to manage the transition in a
reasonable time scale while respecting job security.
CONCLUSION
6.39 The proposed integration between CUHK and HKUST should be conceptualized
as one between two strong and equal partners. For CUHK, complementarity
should be sought at sub-specialty level rather than in broad subject categories. In
many areas there is overlap rather than complementarity, but this could represent
opportunities for efficiency gains.
6.40 Voluntary academic partnerships will have limited impact because of the
competition among a small number of players, and more importantly because of
the mismatch between the party incurring the cost and the party reaping the
benefit. If more collaboration is to be achieved, then some order would have to
be imposed. A transitional stage with a federal structure leading to an ultimate
unitary structure appears to be the only scenario that merits further consideration.
____________________
[1] A federal structure lasted until December 1976, when legislation was passed to
give effect to the second Fulton Report and to define a new structure for CUHK.
6-10
Chapter 7 Issues, Pros and Cons
ISSUES
Research
7.2 CUHK has enviable strength in research and an established track record. The
choice of a partner with comparable strength and more importantly a similar
vision will be advantageous to the research effort as a whole. However,
integration may well imply some consolidation of efforts, in the course of
which existing thrusts in research must not be compromised, nor intellectual
pursuits of quality sacrificed for mere efficiency. Research activities that rely
heavily on facilities may face serious disruptions during relocation. Very
careful planning will be required.
Education
7.3 CUHK needs to ensure that the quality of teaching and the commitment to
teaching are rigorously maintained. General education is a component of our
curriculum that is highly valued, and must be preserved and indeed enhanced
with the additional resources made available. The bilingual and multicultural
dimensions of the University must also be guaranteed. In particular, Chinese
culture as an integral part of the University’s very being should continue to be
treasured.
7-1
7.4 The larger size of a merged university will require special attention to non-
formal education and individual care for students. The college system allows
the close contact of a small community to co-exist with the critical mass of a
larger institution, and must be not only preserved, but enhanced.
Institutional ethos
7.5 We attach great value to CUHK’s tradition and ethos: a high degree of
collegiality in the conduct of our affairs, a very thin and effective
administration (with a correspondingly large percentage of resources devoted
to teaching and research), prudent financial planning and practices leading to a
healthy balance sheet even as external funding is squeezed, a tradition of
propriety in scholarship, honesty in the portrayal of our own successes, and a
concern for the well-being of the community over and above the self-interest
of the institution itself. These values need to be preserved.
7.6 Any change will be unsettling, and it is very important to allay anxieties on the
part of staff. The concerns are likely to revolve around two areas: worries
about job security and conditions of service, and increased workload to deal
with the transition. On the former, any integration proposal must take into
account the existing contracts with staff, which are legally binding. On the
latter, resources must be made available to spread the workload. Moreover,
academic staff are concerned that their hard-earned status should not be
compromised by relaxed academic standards that may come to be applied.
7.7 However, the Task Force has observed during the consultation process that
even though there may be substantial concerns, even anxiety, at the practical,
emotional and micro level about how an integration might proceed, and in
particular how it might affect the welfare of individual staff members, there
was little disagreement with the theoretical, rational and macro case that
CUHK needs to excel, or with the thesis that growth by integration is one
viable route. This ambivalence is not surprising, and has been found in
experience elsewhere (see Appendix C); it calls for great caution in the
implementation plans and sensitivity in communication.
7-2
Brand name
7.8 There are concerns about preserving the brand name of CUHK. The
possibility of retaining in the merged institution the name “Chinese
University” in some form should at least be put forward and seriously
explored – just as the corresponding wish on the part of our partner should
equally be respected. Alumni have stressed that the brand name goes beyond
sentimental attachment, but has real value in terms of recognition, networking
and even the ability to raise donations.
7.9 However, the brand name is an expression of the values that CUHK (its
students, alumni and staff) cherishes; a far more important objective is to
preserve the values themselves.
7.10 On the other hand a view has also been expressed that sentimental reasons
should not obstruct real improvements, if the latter could be demonstrated.
7.11 The existence, names and identities of the Colleges must be preserved in any
integration. We believe this should not be controversial, and can easily be
achieved. The size of each College should not be allowed to increase much
further, and it is for consideration whether to establish new Colleges to cater to
larger student numbers, so that more personal care can be delivered even in a
larger institution.
Administrative organization
7.12 A larger institution (especially one with an extra federal layer) will be much
more prone to bureaucracy and rigidity. Any integration plan must be vigilant
in this regard; indeed, the opportunity of creating new procedures in a merged
institution should be seized in order to simplify regulations and reduce
bureaucracy to below even the present level.
7.13 Integration will incur financial costs during the transition. Though small
compared to the eventual benefits, extra resources will need to be provided, in
order to ensure that staff do not become even more overloaded.
7-3
Prudent financial management
7.14 CUHK has a tradition of prudent financial management, which is not only
right and proper in the use of public funds, but also a necessity as we face
times of stringency. This tradition must be preserved if the integrated
institution is to earn the trust of the public as the target of focused funding by
the Government and the private sector. CUHK financial reserves also need to
be protected in any integration plans.
Implementation
7.15 Views were expressed during the consultation hearings, with which the Task
Force agrees, that great care need to be taken in drawing up implementation
plans. Proposals that cannot be faulted in the abstract could falter on real or
perceived practical difficulties and iniquities.
7.16 There were comments on the lack of implementation details in the consultation
document. In answer to this criticism, it has to be said that the process must go
through several stages (with the possibility of aborting at any stage if
conditions are not satisfied): (a) discussion and decision on whether or not to
pursue a dialogue first with the Government and where appropriate also with
HKUST, (b) negotiations on matters of principle with the Government and
HKUST and (c) formulation of implementation plans and scenarios. We are
now only in stage (a).
PROS
7.17 If the concerns could be addressed and resolved, and if the two universities
were indeed integrated, what advantages would the community see, and in
particular what advantages would the students and staff of the two institutions
see? These have been discussed at length earlier, and are briefly recapitulated
below.
7-4
7.18 First and foremost, the merged institution will come to be recognized as a
premier university in Hong Kong and will also enjoy reputation outside of
Hong Kong. This will put the institution in a good position for regional and
global competition. The most obvious example that comes to mind would be
the unrivalled combined MBA programme, which will become a magnet
regionally for students. The knock-on effects of a regionally competitive
university will in the long term be inestimable for Hong Kong as a whole.
7.19 Internally, the larger university (~21,000 students even without further
expansion) will allow a wider menu of subjects to be offered. Efficiency gains
will free up resources for quality improvements. Critical mass will be
achieved for research and other activities that require large teams and major
facilities.
7.20 The advantages will not come without cost. One can foresee several
disadvantages. First, the larger size will very likely mean more bureaucracy
and less personal care; this problem can be reduced but not eliminated. Second,
the traditions that CUHK are proud of will inevitably suffer some dilution – it
is for debate whether this would be compensated for by the acquisition of
attributes which our partner can contribute.
7.21 Perhaps the most serious disadvantage in the long term is the segregation of
subjects across two campuses. Students will not easily reap the full benefits of
being in a nominally comprehensive university, not so much in terms of formal
courses (for which arrangements can be made) but in terms of the range and
depth of informal contacts that are so important to university education. Some
travel between the two campuses will also be necessary for at least a minority
of students.
CONS: TRANSITION
7.22 But possibly the greatest disadvantages lie in the cost – in both financial and
human terms – associated with the transition to a single institution. The very
7-5
prospect of change will inject a measure of uncertainty for staff, and will
distract them from their normal pursuits; these problems again can be
ameliorated by communication, sensitivity and a more measured pace of
transition, but cannot be altogether eliminated. Apart from uncertainty, there
will be increased workload, in forging a single system of administration, in
formulating new academic regulations and curricula, and simply in learning
and adapting to new circumstances and cultures. The headaches will be
substantial even with the best of will.
7.23 Unless the integration process is meticulously planned, students may also be
subject to uncertainty and deterred from applying for admission.
7.24 We have confined the discussion largely to the pros and cons for CUHK (and
also for the community as a whole). It is of course for our sister university to
assess the pros and cons for itself, but we believe that much of what we say in
this Report – including both the vision and potential for excellence as well as
the issues and difficulties – applies, mutatis mutandis, to HKUST as well. In
the end, if a decision is reached to go ahead with some form of integration, the
advantages must be seen as accruing to the federal or merged institution rather
than to one constituent part, and the difficulties must be faced and resolved
together in a spirit of camaraderie.
CONDITIONS
7.25 Given the concerns, if CUHK is to enter into a formal dialogue with the
Government (and HKUST) about some form of integration, conditions must be
set and understood by all parties.
Financial commitments
7.26 First and foremost, the Government must make it very clear that the proposal
to merge CUHK and HKUST is to improve quality and to create an institution
7-6
capable of competing at the highest international level; the purpose is not to
cut cost. That being the case, there has to be an undertaking that the basic
funding per student will remain the same as other UGC institutions (funding
comparison made at the same time), except for performance-related or
mission-specific allocations. To be specific, in the context of the current UGC
funding methodology, this means that the unit of funding for each student in
any subject should be the same for every institution (of the same mission),
without regard for size (as has always been the case so far), and that there is no
ad hoc downward adjustment for large size. The merged institution must have
the freedom to deploy the savings to improve quality.
7.27 In recent months, the urgent need to reduce public spending has become
apparent. Rightly or wrongly, university budgets will be squeezed over the
next few years, though the size of the cut is still not clear. In this context, it
has to be explained what is meant by the statement that institutional integration
is not for the purpose of cost reduction.
7.28 Suppose the level of Government funding per student now is 100 units, and
suppose over the next few years this level decreases to 95 units. We do not
imply that the proposed integration per se should exempt CUHK or its partner
from such reductions that apply to the entire higher education sector. However,
if the merged institution, because of economies of scale, can achieve ~10%
efficiency gain and deliver the same output and services at 85 units, then the
difference of 95 – 85 = 10 units should be retained by the institution. The
Government should undertake that the purpose of integration is not to save that
extra 10 units, and that the merged institution will be entitled to the same level
of funding per student as sister institutions (not merged), compared in the same
year, namely 95 units in this hypothetical example.
7.29 Government financial support has to be secured in two other areas. As stressed
above, the transitional stage will be onerous, with heavy workload to effect the
integration of systems and curricula. This needs to be recognized and
compensated for. The UGC has a standard mechanism of allocating a front-
end loading when new institutions are created, and the creation of a merged
university should not be an exception to this rule. The relocation of
departments will require the building, alteration and fitting-out of some
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premises; this needs to be provided for. A small excess of teaching and office
space (over and above the usual norms) will also be needed for decanting, as
programmes and departments are moved from one campus to another. The
teaching space will find good use after the transition, as the conversion back to
a four-year normative undergraduate course will see increased student numbers.
7.30 The scale of these resource requirements will need to be quantified in due
course, but the principles have to be agreed upon before any serious
discussions can be launched.
Policy commitments
7.31 But more than anything else, CUHK (and HKUST) will need to see from the
Government evidence of a firm commitment to higher education, and a
correspondingly stable policy that works to nurture the sector. Integration
between two particular institutions must be part of a coherent blueprint for
higher education as a whole. Words must be accompanied by deeds, and the
rhetoric of giving privileged support to a small number of outstanding
institutions must not be diluted by a false egalitarianism that has unfortunately
been prevalent.
7.32 There will need to be a commitment to address the issues and concerns raised
in this Report: the quality of teaching, general education, a bilingual and
multicultural environment, the high standards of research and scholarship, care
given to individual students, staff concerns on conditions of service and
overload, and protecting the institutional ethos.
7.33 Given that the Government has to be prepared to inject extra resources to help
with the transition, and eventually to provide resources to bring the new
merged university to a higher level, one must ask what is then the
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corresponding reward for the community. The answer is of course the creation,
for the community, of a university that is at least regionally competitive and
among the top-tier universities in China. This flagship university will by
example help to set elevated standards for the higher education sector as a
whole. Such an institution will also attract talent to Hong Kong, with
economic and cultural benefits that cannot begin to be measured. In the end, it
will be these benefits to Hong Kong as a whole which would justify the
integration.
7.34 If CUHK (and HKUST) were to receive policy and financial support to
integrate, then their staff would have the responsibility of delivering this
promise – namely to create such an institution for the benefit of the community.
____________________
7-9
Chapter 8 Recommendations
The Task Force recognizes a prima facie case for integration but sees
many practical difficulties that CUHK cannot deal with on its own.
The Task Force therefore recommends that the University Council
should pursue a discussion first with the Government and where
appropriate also with HKUST on the way forward.
NATURE OF ADVICE
8.1 The Task Force will not recommend either yea or nay on the proposed merger
with HKUST. We first need to explain why such a simplistic answer would be
neither appropriate nor helpful.
8.2 First of all, integration – and the term is used deliberately to encompass a wider
range of options than a simple merger – can take many forms: alliance,
federation or full merger, to name but the most obvious. It can be implemented
on time scales of months or years. Integration can result in the Government
clawing back the savings, or in resources being freed up for the combined
institution to use. It can be carried forward with the active and enthusiastic
support of all parties including the Government, or it may have to be
implemented with reluctance or even against opposition. It is only appropriate
that the response of the University should vary with circumstances and
conditions, which in any event cannot be controlled or ascertained by CUHK
alone. To say without regard to external conditions whether we do or do not
support a merger would be irresponsible. Likewise, we feel that simplistic
expressions of yea or nay from various quarters should not be naively aggregated,
since different parties may be supporting or objecting to different assumed
scenarios.
8.3 We therefore believe that our task is first to ascertain whether there is a prima
facie case for CUHK to open formal dialogue with the Government and, when
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appropriate, also with HKUST on the possibility of integration; if so, we next
need to recommend the goals to be pursued in the discussion, the positions to be
adopted, the preferred scenarios, and the conditions to set in the negotiation.
ADVICE TO COUNCIL
8.4 The Task Force, in agreement with the Sutherland Report and the Government,
believes that Hong Kong needs as a matter of urgency to “strategically identify
and create a small number of institutions capable of competing at the highest
international levels”, and that CUHK should aim to be among these elite
institutions, for the benefit of the community, CUHK itself, and especially future
generations of university students. The status quo is not sustainable, either for
Hong Kong or for CUHK, because in a competitive world, those who do not
advance will be overtaken – Hong Kong by other cities and CUHK by other
universities in the region.
8.5 In the short to medium term there are not likely to be fundamental changes in the
principles and methodology by which universities in Hong Kong are funded
(namely, largely according to student numbers); likewise the level of such
funding is not likely to improve. Thus the resources required to achieve
excellence can only come with relatively large student numbers, which will
allow a university to obtain economies of scale, to command critical mass, to
offer a sufficiently wide range of courses, and to exert influence.
8.6 But the present size of CUHK (and of other universities in Hong Kong) is too
small for this purpose, and there is little chance in the foreseeable future for the
university sector in Hong Kong to expand further. Given these constraints, the
Task Force is of the view that integration with another university of comparable
strength and mission would be a good way for the universities concerned to
achieve this goal. This constitutes a strong prima facie case to pursue integration
with HKUST; the integration would be desirable, and if the right conditions were
provided, also feasible.
8.7 Nevertheless, the Task Force has identified many issues and difficulties
(including educational ideals, preservation of the College system, care for
individual students, possible administrative bureaucracy, separation across two
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campuses, dilution of CUHK traditions, staff concerns on job security and work
load), and would not wish to belittle the magnitude of the practical problems that
have to be surmounted, including both resources and the sentiment of staff and
students. Some of these issues cannot be addressed by CUHK alone, in
particular the resources required to implement a relatively smooth transition.
8.8 Accordingly, the Task Force recommends to the University Council that it
should affirm its wish to pursue discussion with the Government and HKUST on
the way forward, in order to come to an understanding on the many issues that
need to be resolved before a decision can be made; and that the Council
Chairman and the Vice-Chancellor should be authorized to initiate formal
dialogue with the Government in the first instance and to report to the Council
thereon, within the following parameters:
(i) that the Government should first formally affirm that the purpose of the
proposed integration is to improve quality and create a university capable
of competing at the highest international levels, rather than to reduce cost,
and that, in particular, the unit of funding per student will not be adjusted
downwards for increased size or efficiency gained, so that the integrated
institution can have the resources to achieve its goals;
(ii) that in addition, the Government and the UGC agree to consider the
integrated institution, provided it satisfies certain conditions to be agreed,
as the primary candidate for the focused and enhanced public and private
support cited in the Sutherland Report, with such public support to start
once integration plans are accepted by all parties;
(iii) that the Government further pledges to support, in principle, the added
administrative cost incurred during the transition (as front-end loading
for a new university) and the capital spending needed to build extra
teaching and office space for decanting of departments and programmes,
with the level of such support to be negotiated;
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(v) that the Government recognizes the issues and concerns presented in this
Report, and pledges that these will be seriously addressed in any
integration plans.
8.9 The Task Force further recommends that, subject to favourable indications from
the Government on the above issues and at a time judged by the Council
Chairman to be suitable, the Council Chairman and the Vice-Chancellor should
be encouraged to initiate dialogue also with HKUST on any and all matters
concerning a possible integration between the two universities, with a view to
improving communication and mutual understanding, and where appropriate also
with a view to joining hands in discussions with the Government on the way
forward.
8.10 Implementation is beyond the Task Force’s terms of reference. In any case,
implementation should not be considered in detail unless and until all parties
have reached agreement in principle. However, the Task Force wishes to draw
the Council’s attention to the need for thoroughly considered, unhurried, and
sensitive plans for implementation – wherein most of the concerns lie.
8.11 The Task Force also recommends that the University should at appropriate
intervals report on and account for the progress of discussion to staff, students,
alumni and other members of the University, whose views should be heard
throughout the process.
8.12 The Task Force further recommends that, having submitted its Report, it should
now be dissolved.
____________________
8-4
Appendix A Membership and Terms of Reference
Membership*
A-1
Terms of Reference
b. To identify the issues concerning CUHK arising from and in connection with
Institutional Integration;
c. Having regard to (a) above, to advise on ways to deal with the issues identified in
(b) above;
f. To undertake any other related assignments given to the Task Force by the
Chairman of the Council; and
g. To complete the final report of the Task Force the latest by 31 December 2003.
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Appendix B Consultation Paper
Introduction
1. The mission of The Chinese University of Hong Kong (CUHK) is to assist in the
preservation, creation, application and dissemination of knowledge by teaching,
research and public service in a comprehensive range of disciplines, thereby
serving the needs and enhancing the well-being of the citizens of Hong Kong,
China as a whole, and the wider world community. CUHK aspires to be
acknowledged locally, nationally and internationally as a first-class research
university whose bilingual and bicultural dimensions of student education,
scholarly output and contribution to the community consistently meet standards of
excellence.
2. The Task Force was established to advise whether institutional integration can
assist CUHK in fulfilling the above mission and goals. The Task Force sets out to
evaluate the benefits and consequences of institutional integration to CUHK and
to explore the desirability and feasibility of institutional integration.
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CUHK’s positioning and global competition
4. CUHK aims at excellence in teaching and research and aspires to be one of the
leading universities in the Asia-Pacific region. In striving for this goal, CUHK
faces tough regional and global competition. Without forceful action, CUHK
would soon be overtaken by key universities in the Asia-Pacific region which
enjoy concentrated governmental resources and support.
5. But because of the resource constraints facing a public university, this goal cannot
be achieved merely by incremental improvements within the status quo.
Recognizing this, the 2002 UGC Report Higher Education in Hong Kong (the
Sutherland Report) recommends “That a small number of institutions be
strategically identified as the focus of public and private sector support with the
explicit intention of creating institutions capable of competing at the highest
international levels.”
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8. CUHK (~14,000 students) is small compared with top public universities in the
US (median of ~25,000 for the top 15 public universities in the US), and also
compared with outstanding public universities in the Asia-Pacific region: Peking
University (~21,000), Tsinghua University (~20,000), Taiwan University
(~27,000), National University of Singapore (~32,000), Tokyo University
(~28,000) and National Seoul University (~32,000). The number of teachers at
CUHK is also smaller.
9. Some private universities in the US have achieved excellence with a small student
enrolment. But they have large endowments and charge high tuition fees, their
average student unit costs* are two to three times that of CUHK, and they offer
selected programmes. They are not valid comparisons.
10. Size is not the only factor that can provide resources for the pursuit of excellence;
for example, in most economies – but not so far in Hong Kong – top universities
receive massive research funding. But at least for public universities, size and the
corresponding resources are necessary, because larger institutions with economies
of scale can provide more resources for the pursuit of excellence. For example, if
the average number of major students per programme is doubled, the department
concerned will have twice as much resources to hire more high quality teachers.
Larger departments will also command critical mass and allow greater flexibility
for engaging more teachers in research, small group tutorials, or offering more
electives.
11. A university that achieves economies of scale and excellence will receive the
focused public and private sector support promised in the Sutherland Report.
12. The Task Force wishes to explore whether institutional integration can assist
CUHK in achieving the above goals, and whether institutional integration is the
only or the most effective means to achieve these goals. What are the concerns
_____________
*
The comparison remains valid both with nominal exchange rates and with exchange rates adjusted for
Purchasing Power Parity (PPP).
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about institutional integration that members of the University would like the Task
Force to consider in its deliberations?
13. Apart from efficiency gains, freed-up resources and critical mass, integration
would enhance the influence and reputation of both partners, and would be
positive for regional status, student recruitment (especially outside of Hong Kong),
research and hence postgraduate programmes, breadth of curriculum (including
programmes outside Hong Kong), and the quality and reputation of programmes.
However, on account of larger intake and enrolment, there would be concerns by
CUHK about intake quality, non-formal education and individual attention to
students. There would also be concerns about whether CUHK traditions would be
diluted: excellence in teaching and commitment to general education, the values
placed on a bilingual and multicultural environment, a high standard of research
and rigorous benchmarking to international standards in staff appointment.
Models of integration
14. Integration can take the form of (a) alliance – two separate and independent
universities cooperating closely in teaching and research; (b) federation – two
institutions operating under one umbrella system; or (c) full merger into one
institution. Voluntary alliance is unlikely to achieve significant effects, because
of intense competition. An immediate full merger might be disruptive. One
scenario that could be explored is a federal structure evolving over a number of
years to a full merger, in which the likely arrangement would be relocation of two
clusters of subjects on separate campuses. A small number of teachers would
have to travel to offer elective or general education courses, but student travel
should be minimal.
15. Issues requiring special attention. CUHK needs to ensure that the quality of
teaching, the general education programme, and the bilingual/multicultural
dimensions are maintained. The larger size will require special attention to non-
formal education and individual care for students. The college system will be
critical in this regard, and must be preserved and enhanced. Feelings of
uncertainty on the part of staff have to be allayed, in regard to job security,
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conditions of service and increased workload in the transition. The possibility of
retaining the name “Chinese University” in some form should be put forward and
explored – just as the wish to retain the name of our partner in some form should
equally be respected. The brand name is an expression of the values that the
University’s students, alumni and staff cherish; the more important objective is to
preserve these values. Integration plans must be vigilant in restraining
bureaucracy in a large institution. Extra resources are needed for the extra
workload of the transition.
16. Pros. The university after integration will become the leader in Hong Kong and a
formidable institution regionally. A wider menu of subjects can be offered;
efficiency gains will free up resources for improvements. Critical mass will be
achieved for research and other activities that require large teams.
17. Cons: long term. The larger size may lead to more bureaucracy and less personal
care. CUHK traditions will suffer dilution. Segregation of subjects across two
campuses reduces the exposure of students. Some travel between the two
campuses will be necessary for a minority of students.
18. Cons: transition. The cost of transition will be high: the uncertainties of change,
staff concerns about job security and conditions of service, distraction from
normal pursuits, the hassle of physical relocation, increased workload to forge a
single administration, a unified set of regulations and curriculum. Possible
differences in the cultures and educational ideals of the two universities will have
to be reconciled and any differences in the values of the two groups of teachers,
students and alumni will have to be resolved.
19. CUHK should enter into discussions only with certain conditions. First,
Government has to pledge that the objective of integration is to improve quality in
pursuit of excellence, not to cut costs, and specifically that savings will be
retained and deployed by the University. Special funding must be provided
during the transition for the extra workload. Extra building and facility needs
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must be provided for. The issues and concerns raised above must be considered
and addressed.
20. (A) Given the present constraints, how can CUHK, as a public
comprehensive research university, attain the right size, critical mass
and economies of scale, secure more resources, and thereby achieve
excellence and leadership in the Asia-Pacific region? In the present
circumstances, can CUHK achieve these goals by way of institutional
integration? Are there other ways and means the Task Force should
consider in its deliberations?
(B) With regard to the pros and cons of institutional integration, are there
any other issues or serious difficulties that the Task Force should take
into consideration in its deliberations?
(C) If CUHK were to enter into discussions with the Government, are
there any other conditions that need to be set, or issues addressed?
21. Members of the University are invited to comment on these issues and to bring up
factors that have been overlooked, so that the views of members of the University
are recognized before the Task Force considers its recommendations. Comments
by members of the University may be put forward through members of the Task
Force, in hearings to be organized, or in writing to the Secretary of the Task Force
before 24 February 2003.
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Appendix C Examples of Integration
Imperial College
www.ic.ac.uk/P287.htm
4. More recently, Charing Cross and Westminster Medical School and the Royal
Postgraduate Medical School merged with Imperial College on 1 August 1997 to
form, with the existing departments on the St. Mary’s and Royal Brompton
campuses, the Imperial College School of Medicine (ICSM).
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Royal Melbourne Institute of Technology (RMIT)
www.rmit.edu.au/heritage/history.htm
Peking University
www.pku.edu.cn/about/htm
7. With that vision in mind, in April 2000, Peking University merged with Peking
Medical University, to form the new Peking University. The original Peking
Medical University had gone through several identities since its establishment in
1912, and had indeed been part of Peking University from 1946 until 1952, when
there was a major reshuffling of university units all over China. In 1985, it was
among the first group of medical schools to be included within the “211” plan [1].
The combined university is said to boast the largest number of professors,
doctoral supervisors and academicians in China.
Zhongshan University
web.zsu.edu.cn/english/
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Zhongshan (Sun Yat-sen) University heralds the beginning of a new and exciting
era for the university.
Drexel University
www.drexel.edu/med/campus/history.htm
10. The post-merger Drexel will join the 51 private universities classified by the
Carnegie Foundation as Doctoral/Research Universities-Extensive. Drexel also
joins the top 100 US universities in federal research expenditure and market
value of endowment.
University of Tasmania
www.ips.uiuc.edu/sao/countries/australia/uni-utas.html
11. In 1991 the original University of Tasmania joined with the Tasmanian State
Institute of Technology in Launceston to create a new University of Tasmania.
Through this merger, the University of Tasmania was able to combine the
strengths of an older academic institution with the new approach of a modern
institute of technology. This successful merger allows Study Abroad and
Exchange students to take courses at either of the two campuses.
Massey University
aboutmassey.massey.ac.nz/history.htm
12. In 1999 Massey University merged with Wellington Polytechnic to form Massey
University Wellington. This has opened the doors to the world of design, fine
arts and music to the rest of Massey University and the refurbishment of the
former Dominion Museum as the “front door” to Massey in Wellington has
cemented the University in the capital.
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Zhejiang University
www.zju.edu.cn/xqzl/lsyg.htm
14. The merger among these four institutions was approved by the State Council in
September 1998. The new university is jointly supported and supervised by the
Ministry of Education and Zhejiang Province, and is now one of the most
powerful universities in China.
Sichuan University
www.scu.edu.cn/scu2002/gaikuang/lishi.htm
15. Sichuan University had its origins in Qing Dynasty schools established as early
as 1895. The name Sichuan University was first used in 1927 when a number of
specialist schools merged under the Provincial Education Bureau. In 1931, it
further merged with National Chengdu University and National Chengdu Normal
University, thereby becoming National Sichuan University, under the Ministry of
Education. After the resuffling of higher education institutions in the 1950s,
Sichuan University became a comprehensive university covering in particular the
arts and the sciences.
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18. The third party to this merger is the West China University of Medical Sciences,
which had its origin in a private university founded by five missionary
organizations in 1910. It came under the Ministry of Education in 1933, and
became Sichuan Medical University in 1953. In 1978, it was officially
recognized as a national key university, and in 1985 was renamed the West
China University of Medical Sciences.
19. The merger among these three institutions went through several stages. In 1993,
the State Education Commission and the Sichuan Provincial Government
approved the merger of the original Sichuan University and Chengdu University
of Science and Technology. The name was apparently controversial, and an
unwieldy interim compromise “Sichuan Union University (Sichuan University,
Chengdu University of Science and Technology)” was adopted; the name was
later simplified back to Sichuan University by order of the Ministry of Education.
In September 2000, this institution further combined with West China University
of Medical Sciences, retaining the overall name of Sichuan University. The
merged university has an enrolment of ~40,000 undergraduates (including sub-
degree students) and ~10,000 postgraduates.
20. Tianjin University and Nankai University are geographically almost next door,
and to a large extent complementary in subject coverage, with the former
concentrating more on engineering and the latter on arts and sciences. Merger
talks failed, despite urging from the national government, apparently over the
name of the combined institution. According to anecdotal reports, the suggestion
of “Tianjin Nankai University”, though perfectly balanced on the surface, was
felt to be entirely to Nankai’s advantage.
21. The proposal to merge Imperial College with University College London was
announced by the two heads of institution in 2002, at nearly the same time as the
proposal to merge CUHK and HKUST was publicly suggested in Hong Kong.
The proposal was in the end withdrawn, in part because the two heads had jointly
announced what appeared to be a decision without sufficiently explaining the
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rationale to staff and students. There was also no significant government policy
tilt in favour of merger in this case. (See also paragraph 43.)
22. London Metropolitan University was created on 1 August 2002 by the merger of
London Guildhall University and the University of North London.
23. London Metropolitan University is based in the City, north and east of London
and is one of Britain’s largest universities. It offers a wide variety of courses, in
a huge range of subject areas: undergraduate, postgraduate (taught and research),
further education programmes, short courses, and professional and institute
qualifications. Many programmes can be taken either full or part-time and a
module scheme allows a flexible study programme.
24. The merged university operates across two campuses: the London City campus
and London North campus, with 13 main sites. There are more than 900 full-
time academic staff and over 1,000 part-time academic staff in 14 academic
departments. There are 3 International Offices (Beijing, New Delhi and Lahore)
and 4,000 International students from 147 countries.
26. Homerton’s strengths have historically been in undergraduate work and teacher
training. Cambridge University’s School of Education is recognized for its
education research and for its professional development work, secondary school
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teacher education and higher degree work. By combining the two, it is hoped to
create a centre of excellence with high quality research and teaching programmes,
and to make the study of education an academic discipline equal to any of the
established arts and sciences in Cambridge.
27. To assess the success or otherwise of mergers, one has to turn to examples from
some years ago. A convenient source of interesting information is a recent
special issue of the journal Higher Education [2], which presents studies by
independent scholars of several national systems that have experienced a large
number of mergers.
South Africa
29. In fact, there is a tension between the abstract and institutional case for mergers,
and personal considerations. According to this study [4] over 90% of the staff
agreed that merging should be supported under certain conditions, but of the
same group of respondents, 97% indicated at least some feeling of insecurity.
Australia
30. Australia saw a spate of mergers in the late 1980s. The process was
implemented relatively quickly and with top-down authority. A study [5]
showed that
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universities and around 44 colleges of advanced education gave birth
to 35 universities. [6]
31. But the benefits are said to be mixed. For our reference here in Hong Kong, it is
said that the difficulties lie especially with mergers between unequal partners:
32. Two cases were regarded as very clear successes: Wollongong University and
Charles Sturt University (CSU) [8]. The case of CSU is especially interesting [9].
Despite very substantial geographical separation over three campuses (distance
of 600 km!), it was able, eight years after merger, to win the Australian Good
University Guide’s University of the Year Award. The assessment was that
34. To a distant observer, the evidence of success is clear: many in Hong Kong
would know of Charles Sturt University, but few would have ever heard of the
three constituents that merged to form it – the institution has without question
moved up one notch in international visibility. As a result, it now attracts a
substantial number of international students, including many from Hong Kong.
35. Of the Australian mergers studied, only one was regarded as a clear failure [8]:
the merged institution in the end broke up.
36. Commentators have drawn two lessons from the Australian experience. First,
the government must be involved to steer the process:
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The “hands-off” attitude by the State Government affected not only
the process but the outcomes of the restructuring of institutions in
South Australia. Left virtually to themselves, institutions tended to
indulge in their territorial ambitions. [12]
37. Secondly, it appeared that an ambiguous federal structure leaves too many issues
unresolved and too many opportunities for contention. Moreover, leadership is
of course critical.
Norway
39. A series of mergers have also taken place in Norway. In this case, distance is a
significant problem, with separation between different parts of a merged
institution ranging from 20 km to 180 km [15]. Nevertheless, the mergers were
judged to be an overall success, though there are still problems:
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and to make the colleges more cost effective – can so far not be said
to have been fulfilled. In addition, many academic staff feel that the
new colleges have become bureaucratized, that the identity of the
individual vocational programmes have been weakened, and they
blame the reform for a general retrenchment in financial resources.
[16]
UK
40. A recent issue of The Bulletin [17] has also cited and evaluated the many
university mergers in the UK. The motivation cited is very much the same as the
factors discussed in this Report:
41. In particular, this report attributes all recent mergers in the UK to “the need to
compete internationally”.
…these merger discussions tell the same story: “critical mass, rather
than complementarity, is the virtue.” The larger the university, the
larger the income, the easier it is to attract research funding, world-
renowned educators, researchers and students. Those with merger
success stories, however, would argue that there are many other
factors that go into the mix and that these other factors should be
considered just as carefully.
43. The article evaluates the London Metropolitan University and Manchester
mergers as successes. It suggested a reason for the failed Imperial College and
UCL merger talks:
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Could it be that in the case of UCL and Imperial, the greatest
obstacle to success was the impression of many students and staff
members that the process was too hurried, or did not leave enough
time for proper consultation?
44. The article also cited a 1997 paper by the Commonwealth Higher Education
Services which analysed 30 UK mergers between 1987 and 1994, which found
them to be generally positive:
45. It also cited two factors that contributed to success: a realistic rather than overly
optimistic plan, and consultations with staff and students.
Evaluation
46. Circumstances differ and not all conclusions can be generalized to other contexts.
Nevertheless, the following points drawn from the above examples are worthy of
notice.
• Mergers can often result in the elevation of standards and especially
visibility.
• There could be economies of scale, though the magnitude may vary.
• Staff concern is common. Communication and sensitivity are vital, and the
process cannot be hurried.
• Leadership is critical.
• Government involvement and policy encouragement is important in steering
the process.
• Full mergers are in the end more conducive to cultural integration.
• Mergers between very unequal institutions tend to run into difficulties with
different value systems.
• The initial plan should not be overly optimistic.
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FORMATION OF CUHK
47. This section is based on The Quest for Excellence: A History of The Chinese
University of Hong Kong [18], with large parts extracted verbatim. Again, for
easy readability, quotation marks will not be supplied, but should be understood.
48. The story of CUHK itself, in evolving from a loose coalition of three colleges to
a unitary university, is instructive in giving a sense of the time scale involved,
the stages that a merger has to go through, the action that need to be taken by all
parties and the feelings that can be involved in the process. This is also a case
study the end result of which members of CUHK can themselves evaluate.
The Colleges
49. When HKU was re-established after the war, the reasoning was more imperial
than local, in fact “because of the need to maintain British position and prestige
in the Far East” [19]. Over the next decade, the local community felt a very
strong need to establish an institution of higher learning that catered to Hong
Kong needs, with an inclination to Chinese culture and tradition rather than to
British imperial considerations. These aspirations centred on the post-secondary
colleges that came to be established in that period, in particular Chung Chi, New
Asia and United.
50. In June 1953, the Executive Council accepted Chung Chi College as an
institution of higher learning, a recognized post-secondary college and a
“permanent component of Hong Kong education”. With the support of Yale-in-
China, New Asia was able to move to new premises in 1956. United College
was formed in 1956 through the amalgamation of the five yet smaller colleges,
the process being helped by the President of Columbia University, who was also
an executive committee member of the Ford Foundation and a director of the
Asia Foundation.
Early collaboration
51. Pursuant to initiatives from the Colleges, the Deputy Director of Education in
October 1956 for the first time suggested “the development of four-year post-
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secondary colleges to award recognized diplomas or even degrees”, or “the
establishment of a Chinese university with its own charter and degree granting
powers” [20].
52. The three Colleges on their own increased collaboration. In February 1957, the
Chinese University Joint Council was established and Joint Entrance
Examinations were conducted soon thereafter. In 1959, the Joint Council set up
three boards responsible for the entrance examination, diploma examination and
staff establishment. The first Joint Diploma Examination was held in 1960.
53. On the Government side, following a series of meetings involving both London
and Hong Kong officials, it was decided in August 1958 that another university
should be established in Hong Kong. The plan was accepted by the Government,
then also the British Government and the Inter-University Council. In May 1959,
the Chinese Colleges Joint Council on behalf of the three Colleges also accepted
the plan. In June 1959, the Hong Kong Government officially announced that it
was prepared to establish a new university, and started to fund the development
of the three Colleges.
Establishment of CUHK
54. In May 1960 the Post-Secondary freed the Colleges from the restrictions of the
Education Ordinance. A formal commission was appointed in June 1962,
headed by John Fulton. The members included Choh-Ming Li, later to become
founding Vice-Chancellor. The Fulton Report, published in April 1963 and
accepted by the Government in June, recommended the organization of the three
Colleges into a new university. A Provisional Council was then set up.
55. The Chinese University of Hong Kong Ordinance was passed in the Legislative
Council and came into effect in September 1963. On 17 October 1963, the
Governor, in his capacity as Chancellor, officiated at the inauguration ceremony.
56. The Fulton Report of 1963 and the Ordinance established CUHK as a federal
university, with only limited functions for the University Headquarters. The
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Academic and Administrative Planning Committee (AAPC), later to evolve into
the Administrative And Planning Committee (also AAPC) that now sits at the
centre of CUHK management, was meant to be only a coordinating body.
57. All teachers belonged to the Colleges, with lecturers and below recruited by the
Colleges, while senior lecturer and above were selected by the University.
Students were admitted to the Colleges after screening by an entrance
examination conducted by the University. The University laid down basic
entrance requirements (e.g., five subjects passed) and beyond that let the
Colleges make their own final selections.
58. By the start of the 1970s, several facilities and programmes had come directly
under the University: (a) the research institutes, (b) advanced programmes such
as the Graduate School, the School of Education and the Lingnan Institute of
Business Administration (later to evolve into the MBA programmes), (c)
extramural studies (the forerunner of the present School of Continuing Studies),
(d) the Library, (e) the Health Centre, (f) the Student Appointment Service, (g)
the Science Centre and (h) the Computer Centre. Student admission became
centralized in 1971, so that students applied to CUHK rather than to the Colleges.
Shared teaching
59. The Colleges had few students, few teachers and small departments – in other
words very poor economies of scale. Inter-collegiate teaching was the natural
and rational solution, and the first step to a more unitary structure; bodies such as
Boards of Studies and Faculty Boards became more important, while College
Departments, Faculty Boards and even Academic Boards gradually relinquished
their functions.
60. With the strengthening of central authority, in 1969 the Bursar’s Office and the
Office of Physical Development were set up, and in 1973, the Registry was
reorganized to assume more academic planning and monitoring functions. These
changes also marked the beginning of tension and contention between the central
administration and the Colleges.
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61. In March 1969, in commenting on the 1970-1974 four-year plan, the then UPGC
directed the University to strengthen the central functions, and alloted only 77%
of the funds requested by CUHK – a substantial cut. As a result, the University
administration proposed the “pooling of resources”, in order to raise the
efficiency through economies of scale. This policy, announced in 1970, drew
strong reactions from the Colleges, with vigorous debates both on campus and in
the media.
63. The reforms recommended by the Working Party would require statutory
amendment. In November 1975, the Governor, as University Chancellor,
appointed the Commission on The Chinese University of Hong Kong, again
chaired by John Fulton.
64. The Commission’s report, released in March 1976, recommended that the federal
system be maintained, but that the integration of the university administration
should be continued and strengthened. While supporting the integration of
departments of study, the Commission did not wish to assign academic power to
the Colleges. Therefore the Commission recommended that a single
administration should replace the federal system, and that with a few explicit
exceptions, all power should be vested in the University. The roles of the
Colleges were to be restricted, but within those restrictions were clarified and
strengthened.
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College response and the new Ordinance
65. The three Colleges responded differently, with New Asia in strong opposition,
Chung Chi less vociferous, and United not raising any objection.
66. The first objection was that the second Fulton Report contradicted the original
Fulton Report of 1963, and was a violation of the agreement between the
Government and the three Colleges. The second objection was over procedure:
neither the Working Party nor the Fulton Commission had involved or consulted
the Colleges, but had gone directly to the Chancellor and the Government. On
these two points the objections had some merit. The third objection was, in
current parlance, a refusal to accept the argument of economies of scale and
critical mass. With hindsight, this objection was clearly incorrect. Finally, there
was objection to the division of responsibility in teaching, and indeed the pattern
of division has since evolved from that envisaged in the second Fulton Report.
67. The Government evaluated opinions from all sides, and despite the strong
opposition especially from New Asia College, accepted the 1976 Fulton Report.
A new Chinese University Ordinance was put before the Legislative Council in
October 1976. The Chung Chi Board acquiesced, but the New Asia Board
objected to the end, with nine Board members (including the Chair and Vice-
Chair) resigning en masse.
____________________
[1] The “211” plan referred to a scheme in China to identify and focus resources
upon 100 key universities, for strategic development in the 21st century.
[2] Higher Education, 44(1), July 2002. Special Issue on Merger Revisited:
International Perspectives on Mergers in Higher Education.
[3] Hay, D., and Fourie, M., “Preparing the way for mergers in South African higher
and further education institutions: An investigation into staff perceptions”,
Higher Education, 44(1): 115-131.
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[5] Harman, K., “Merging divergent campus cultures into coherent educational
communities: Challenges for higher education leaders”, Higher Education,
44(1): 91-114.
[9] Hatton, E.J., “Charles Sturt University: A case study of institutional amalgama-
tion”, Higher Education, 44(1): 5-27.
[11] Ibid.
[12] Mildren, G., “Launching the Unified National System: What happened in south
Australia”, Higher Education, 44(1): 29-51.
[14] Harman, G., “Institutional mergers in Australian higher education since 1960”,
Higher Education Quarterly, 54(4): 343-366 (2000).
[15] Norgard, J.D., and Skodvin, O.J., “The importance of geography and culture in
mergers: A Norwegian institutional case study”, Higher Education, 44(1): 73-90.
[16] Kyvik, S., “The merger of non-university colleges in Norway”, Higher Education,
44(1): 53-72.
[18] Ng, A.N.H., (ed.), The Quest for Excellence: A History of The Chinese
University of Hong Kong (CUHK Press, 1994).
[19] Report of the Cox Committee to the Secretary of State for the Colonies, 1946, as
quoted by Ng, A.N.H. in The Quest for Excellence: A History of The Chinese
University of Hong Kong, p.3.
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Appendix D Extracts from HKUST Statements
“The report says that in the current economic climate, the possibility of creating an
institution that would be the focus of public and private support through the merger of
two of Hong Kong’s best universities suggests a way forward that deserves serious
consideration.
The Task Force has explored the benefits that a merger could potentially provide, such
as resource provision, complementary strengths in creating critical mass, more flexible
and efficient use of resources, as well as enhancement of community and Government
support. Concerns examined in the report include the different missions of HKUST and
CUHK, the need to retain HKUST’s research culture, the possible effect on faculty
recruitment and retention, staff concerns for job security, and the hidden costs of merger.
The report identifies four critical issues that need to be addressed as principles for a
successful outcome from a merger, namely the objectives of the merger, resource
implications, institutional standard of research and organizational culture.
The report concludes that, before the critical issues and concerns are addressed, it would
not be timely at this stage for HKUST to enter into discussions with other tertiary
institutions regarding the idea of a merger. It recommends that HKUST should
approach the Government for clarifications on these critical issues and concerns. On
receipt of the clarifications, the University can then consider the matter.”
“This week the Secretary for Education and Manpower, Prof. Arthur Li, paid an
informal visit to HKUST and exchanged views with senior management about various
issues, including the position of higher education in Hong Kong. In relation to the four
critical issues, the Secretary made the following response:
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• The unequivocal objective of the Government in supporting a merger is to
build a world-class comprehensive research university in Hong Kong;
He pointed out that there will be no forced merger and that he has yet to learn of
CUHK’s position regarding the proposed merger.
Prof. Li also reiterated his determination to advance tertiary education in Hong Kong,
and his view that the Government will only be able to support the development of, at
most, two comprehensive research universities that are capable of competing at the
highest international level.
Given the Secretary’s indication that the higher education budget will be severely cut
and that a long period of funding austerity will prevail, our senior management has
expressed the view that the key questions for HKUST are, in relation to resource
implications, whether our University can independently fulfill its long-held aspiration of
becoming a truly world-class university, or whether we should consider pooling our
strengths with CUHK to attain this goal together.”
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