Not very long ago, say 20 years back, the tale of global universities was straightforward. American schools ranked at the top. The majority of the other top schools were British or European. Chinese universities were expanding, but only a few of them were recognised. A few famous ones were better known for the work done by students from the West rather than by teachers or local students.

That story is evolving, and in the next 10 years it will evolve much more. According to the Times Higher Education rankings, only two Chinese universities secured a place in the top 100 in the world in 2016, while the US had 39. Ten years later, in the 2025 rankings, seven Chinese institutes are among the top 100. Something has certainly changed.

For the last twenty years, China’s strategy regarding higher education was: spend, expand, learn, and come back. It spent money on research and campuses. It sent pupils overseas and brought scholars home. It taught more PhD candidates and urged institutions to collaborate closely with the government and industry. Their plan was never hidden.

The outcome is now becoming visible in the numbers. According to the National Science Board of the United States, China’s research spending was around $1.028 trillion in 2024, slightly ahead of the $1.009 trillion spent by the United States. No wonder China now also produces the most scientific articles of any country.

Other university rankings reveal a similar trend. The 2026 Shanghai Ranking had 234 Chinese universities, more than the 187 from the United States. Among the 234, 16 Chinese universities made the top 100. American colleges continue to dominate the top 100 rankings, while this indicates that there is a bold transition, and it is not complete yet. We need to understand why many Chinese colleges may become even stronger in the coming decade. Surely, they are doing something right.

In China, universities are learning to go further beyond the campus. They are intended to assist the entire country in developing. A leading Chinese university educates students, operates research laboratories, files patents, and collaborates directly with industries and technology companies. Western institutions do some of this as well, but China’s system is designed from the ground up to prioritise national aims. The university is becoming an engine for the entire economy, rather than merely a location to acquire a degree.

China possesses what nearly no other country does: scale. It boasts a sizable population, a large number of university students, and a vast pool of engineering graduates. If one institution discovers a good concept, a new AI lab, a new method of teaching, it may be replicated elsewhere. This size also generates its own market.

A researcher who develops a novel AI tool is not required to sell it internationally first. China’s industries, hospitals, banks, and stores are large enough to test and implement new technologies immediately. This creates a loop in which universities teach talent, talent develops technology, technology feeds industry, industry generates data, and this data feeds back into research.

Artificial intelligence will have a significant role in shaping the coming decades. China’s “AI Plus” policy views AI as a tool that can benefit everything from manufacturing to hospitals to farming. Chinese colleges are increasingly embedded in a network of technology enterprises, manufacturing, and government laboratories. The result may be a new kind of university, part classroom, part AI lab, part factory floor.

In the past, China’s biggest weakness was its labs, not its people. That gap is closing as the country has built high-performance computers, modern laboratories, and large national research programmes. Scientific research now needs the finest equipment and huge amounts of data. Better labs mean Chinese researchers can compete with the best in the world. American universities became strong partly because they sat close to booming tech hubs, think of Silicon Valley or Boston. China is now building similar hubs of its own, placing universities next to major manufacturing and technology centres. For students, this means a shorter path from the classroom to a real job: study, experiment, work with a company, solve a real problem, then get hired.

China aims to cultivate graduates who can advance sectors such as artificial intelligence, semiconductors, and sophisticated engineering, rather than simply increasing the number of graduates. This involves expanding the number of graduate schools, enhancing engineering programmes, and intensifying efforts to attract top researchers. This strategic move could eventually provide China with a vast pool of highly skilled workers to drive its economy forward. In the past, international students aspired to study in the United States, the United Kingdom, Australia, or Canada. However, this is no longer a guaranteed option. Stricter immigration policies in certain Western nations are prompting students to explore other study destinations.

This presents an opportunity and a test for China. To excel, Chinese universities must enhance their global presence by offering more English-taught courses, attracting more international scholars, and expanding their campuses. Successfully achieving this could position Chinese universities as a preferred destination for students from various regions worldwide. However, the advancement of Chinese universities does not imply an immediate decline of American and European institutions. These universities still maintain top positions and continue to attract exceptional talent and substantial funding.

Nevertheless, the gap is gradually narrowing. Two decades ago, the focus was on whether China could catch up, whereas today, the emphasis is on how much further China can progress and whether the Western world is prepared for robust competition in global education.

A F Wazir Ahmad is an Associate Professor in the School of Business at the University of Liberal Arts Bangladesh (ULAB). He also serves as a Senior Visiting Scholar at the Centre for China Studies, a joint initiative of the Shanghai Institutes for International Studies and the University of Dhaka (SIIS-DU).