Opinion | Why Hong Kong must be careful about cutting university funding

Financial Secretary Paul Chan Mo-po will unveil Hong Kong’s budget on February 26. Recent indications that funding for Hong Kong’s eight public universities will be adjusted over the next three years have intensified the funding debate ahead of the city’s fiscal reforms.

As the government grapples with a significant deficit, these funding cuts raise critical questions: should public funding priorities shift away from universities with substantial reserves, or does this risk undermining Hong Kong’s ambitions to develop its reputation as a global centre for education and innovation?

The government’s decision to adjust funding allocations, citing concerns over the universities’ substantial financial reserves, reflects a broader effort to tackle fiscal challenges. But this approach could have unintended consequences, particularly as the city faces increased competition as a global knowledge hub. The issue is not merely the size of university reserves but how they relate to expenditures and whether they are being used effectively to achieve long-term strategic goals.

Financial reserves are not merely surplus funds. They are a critical buffer to ensure operational continuity, absorb economic shocks and support sustainable growth. For universities, reserves fund research initiatives, maintain infrastructure and enable long-term planning in an unpredictable financial and geopolitical landscape.

Our universities operate in a highly competitive global environment. They must maintain strong financial foundations to attract top talent, retain world-class scholars and drive innovative advances to remain competitive. Arbitrarily reducing funding could undermine the city’s aspiration to become a leading global education hub.