Chinese companies face a frosty reception in the US, except when it comes to universities, where they are warmly welcomed as customers.
American universities sign contracts around the world to sell their research and training expertise, and some of their most lucrative deals have been with companies based in China. The decades-old trade is thriving, despite growing rivalry between the US and China and growing sensitivity about Beijing’s influence on American campuses.
Nearly 200 US colleges and universities held contracts with Chinese businesses worth $2.32 billion between 2012 and 2024, according to a Wall Street Journal review of disclosures provided to the Department of Education. 2,900 contracts.
The extensive trade in American expertise poses a problem for universities and policymakers in Washington: Where is the line between fostering academic research and empowering an American rival?
“It’s clear that when the Chinese contract with US universities they get a unique ability that they can’t get anywhere else,” said Daniel Correll, an education department official in the Trump administration who has tracked foreign influence in higher education. “The big question is which contracts should be legal, what Should be legal and discloseable, and what should be illegal?” he added.
Donations in large amounts
Sometimes, a U.S. university with close ties to a major domestic industry—such as automobiles and the University of Michigan, or citrus fruits and the University of Florida—does research for a Chinese competitor in that industry. All three of China’s state-owned major oil companies have funded contracts of $100,000 or more at the university. Texas in Austin, which the school describes only as a “research activity.”
U.S. universities earn money from almost every country in the form of tuition, gifts and contracts. According to the Journal’s analysis, Qatar provided more non-tuition funds to U.S. universities than any other country, followed by Britain, Germany and China.
University of Texas building in the USA. China’s three largest state-owned oil companies have financed contracts of $100,000 or more for it / Photo: Reuters, Aaron E. Martinez / USA TODAY NETWORK
Donations get more attention because they are often large sums from individuals that can lead to things like naming buildings after them. However, the world of contracts actually involves a lot more money overall.
The Journal found that the total value of university contracts attributed to China in the past decade was 2.5 times the reported Chinese contributions, similar to amounts from other countries. China remains the largest source of foreign students on American campuses and their spending, including tuition, is a much larger share of university budgets than contracts and gifts.
Universities are required to report any foreign gift or contract worth $250,000 or more to the Department of Education, although the rule has historically not been enforced, and the Department of Education has claimed billions go unreported. The Journal also found cases of double counting and other data errors.
More and more people are calling on Capitol Hill to review Chinese contracts with US schools for national security risks.
Aiding US opponents
The Journal asked major public universities in all 50 states for information about their contracts with organizations in China. The records show that these contracts cover various industries where Beijing has provided support and subsidies to Chinese companies, including medicine, agriculture, manufacturing and even the arts.
The universities say that combining Chinese funding with American know-how often serves a public good, such as developing new cancer treatments. However, in the eyes of critics, the Communist Party’s control of China’s business sector could spoil even these pursuits.
This is the conundrum facing the US universities that have signed contracts with the Shanghai-based company WuXi AppTec. AppTec, known in China as the “Huawei of pharma”, is a biotechnology conglomerate known worldwide for medical breakthroughs and the production of treatments approved by the Food and Drug Administration. But like China’s blacklisted maker of advanced telecommunications equipment, it is now dogged by concerns in Washington that its innovations could be misused by Beijing.
Both AppTec and Huawei had agreements with US universities, the Journal found. The companies say they are privately owned and deny any involvement with the Chinese government or a security risk to the US.
WuXi AppTec company building in Shanghai / Photo: Reuters, Xu hede
The University of Arizona estimated the total value of three contracts with AppTec for 2022 to be around $1.5 million. One of those contracts involves a service provided by AppTec for another Chinese pharmaceutical company, where the university’s hospital receives $36,977 for each person who participates in trials for a drug to treat tumors.
The drug has FDA approval for the investigational treatment of certain rare cancers.
Members of Congress fear that Beijing could use AppTec’s commercial biological advances for military purposes. They propose labeling AppTec a “biotech company of concern,” which would prevent it from partnering with American organizations that receive federal funding, such as hospitals and universities.
“WuXi AppTec and its sister company WuXi Biologics are rapidly becoming a global pharmaceutical and research services giant that threatens US intellectual property and national security,” said a February letter signed by four members of a committee within the US House of Representatives focused on China-related issues, which requested the new classification.
AppTec said the legislative effort aimed at it is “misguided” and “lacks a fair and transparent review of the facts.” Arizona spokeswoman Pam Scott said in an email: “We have not been notified of any security concerns.”
Cfius test
At the beginning of 2018, the University of Washington announced that it would create one of the first academic centers in the world dedicated to virtual and augmented reality. The university awarded the center’s funding worth 6 million dollars to Facebook, Google and Huawei.
After the Trump White House banned Americans from conducting certain types of business with Huawei in May 2019, the university said federal rules prevented it from continuing to do business with the Chinese company.
The university reported receiving more than $5.5 million from Huawei over the years 2018, 2019 and 2021, and a spokesperson said the 2021 payment represents the last part of the contract that began before 2019. A Huawei logo appears in a welcome video on the Reality Lab department’s homepage of the university, which the spokesperson described as an honest admission of Huawei’s financial involvement in the lab.
A student at the University of Washington’s virtual reality lab, which is also funded by Huawei / Photo: screenshot from YouTube
Huawei did not respond to questions about its contracts with US universities, including the University of Washington.
“Until recently, there weren’t many concerns about what was happening in universities,” said Aaron Friedberg, a member of the US-China Economic and Security Review Commission.
The committee, which advises Congress, is now pushing for legislation to treat Chinese contracts with universities like foreign-funded acquisitions, so that they would be subject to government national security reviews on behalf of the Committee on Foreign Investment in the United States (CFIUS). Friedberg explained that the concern is that contracts are “just one of many ways of foreigners to access our research and development technology.”
pilot program
Several contracts identified by the Journal provided China with specialized training it lacked.
For example, China has few small planes and landing craft needed to train pilots, so for over a decade major Chinese airlines like Air China have paid the University of North Dakota millions every year to license their pilots. Records from North Dakota show that between October 2018 and July 2022, the university signed contracts worth more than $37 million with four Chinese airlines.
Student pilots at the North Dakota Aerospace Academy completed the required 250 hours of training on airstrips just a few miles from Grand Forks Air Force Base, a control center for military drones and satellites.
A drone in flight over the building of the School of Aeronautics and Space Sciences in North Dakota, USA / photo: ap, Dave Kolpack
North Dakota declined to discuss its work with China’s airlines, though university publications said about 30 percent of Air China pilots trained there and that their presence provided significant financial support to the capital-intensive aerospace school. The Chinese airlines did not respond to questions.
Among foreign funders of U.S. schools, China poses particular complications, says Ian Oxenbad, a senior fellow at the National Association of Scholars, who argues that U.S. universities do not need China’s money and should be alert that its military can take advantage of ostensibly civilian technological advances. “There is an ethical obligation here for research,” he said.
For years, a prominent type of contract with universities has involved Chinese-language training on US campuses under the banner of “Confucius Institutes,” such as the $540,000 contract reported by the University of Oklahoma in 2019. After evidence piled up that these institutes, funded by Beijing Yen has strong ties with China’s diplomatic missions, most of which have been closed, including the one in Oklahoma.
Some of the largest contracts with China include concessions to establish satellite campuses abroad. New York University, which received the most funding from China according to the Education Department database, reported two contracts worth a total of more than $46.5 million for 2021 alone for its campus in Shanghai.
The Juilliard School has disclosed receiving more than $133 million in funding over more than a decade for its Tianjin Juilliard School located near Beijing, which is equipped with about 120 Steinway pianos.
Motor City
Successive US administrations have accused the Chinese Communist Party of using US campuses as strategic points to advance its agenda. The FBI and other agencies warn that the Chinese state has encouraged the theft of technological secrets at universities, spread pro-Beijing propaganda, suppressed the The open discussion on campus and harassing students.
Beijing denies these descriptions. Chinese officials say ethnic Chinese students and professors have been treated unfairly in the US, including on American campuses, and have urged the US to consider its reputation for academic freedom. The Chinese Embassy in Washington did not respond to questions about the university’s contracts.
In the shadow of Detroit’s auto industry, the University of Michigan said it has about $1 million in contracts from DiDi Global, a Chinese ride-sharing company backed by government funds that pushed Uber out of business.
The university said DiDi funding supported a variety of engineering research, from evaluating devices to monitor driver health and operational safety to using a fleet of vehicles to monitor air pollution, including eight peer-reviewed scientific papers that published the findings. One study analyzed data from DiDi over a year to understand how empty taxis affect traffic.
“International engagement is a fundamental component of successful research,” university spokesman Rick Fitzgerald said in a statement.
Among the arrangements disclosed by the University of Minnesota to the Journal, two small Chinese equipment manufacturers paid $50,000 each year to be members of its filtration research center, alongside big names in the industry such as 3M and Boeing. When one Chinese company, Guangxi Watyuan Filtration System, went public, it told investors that its connection to Minnesota allowed it to “benefit from the latest achievements of world-class R&D institutions in the filter industry.”
Minnesota, like many educational institutions, said any research generated by a Chinese contract is made public.
Orange in vinegar
Florida oranges have long been squeezed out of the Chinese market by aggressive Chinese growers and protectionist policies such as a 56% import tax. However, China still values Florida’s orange-growing expertise.
Scientists in China turned to the University of Florida, which has studied citrus diseases for more than 100 years, after concerns were raised about a tree disease called greening that causes the fruit to become acidic. The school’s disclosure showed contracts worth about $1.8 million with the China Navel Orange Institute at Gannon Normal University. These contracts funded the work of Florida-based tree geneticist Nian Wang, who made significant progress in combating citrus diseases.
University spokeswoman Chris Vivian said the contracts reflect the university’s commitment to the agricultural community. The university’s research focuses on researching wild citrus plants in China that are resistant to greening, and local cooperation is necessary because under Chinese law the material cannot be sent overseas, she said. Wang declined to comment. Emails to several people at the China Orange Research Institute were not returned.
Dan Ritchie, Florida orange grower and president of Vero Beach, Fla.-based Riverfront Packing Company, emphasizes that the global citrus industry is desperate for a solution to green diseases, but also says the university’s deal indicates the potential for Chinese attempts to “steal intellectual property.” Nearly 25 years ago, Ritchie brought a crate of oranges from Florida to Beijing, hoping the Chinese market would open up to US growers, only to see that opportunity slip away. He says he still doesn’t trust the Chinese’s intentions.
Future collaborations between Florida and China are now in doubt after Gov. Ron DeSantis signed a law last year that could prevent state-funded universities from entering into contracts with partners from China, Russia, Iran and four other countries. The governor’s office said he aims to “reduce Chinese influence in Florida’s education system.” The university declined to comment on the law or its impact on orange research.