Joint University Programs with China Escape Financial Reporting

Unreported billions could be helping China access American STEM research, defense tech.

Following last year’s reporting on DEI spending, federal money and foreign donations at elite private universities, Open the Books auditors have been taking a closer look at the finances of a sampling of public universities across the country.

Strikingly, these problems have spilled far beyond those elite Ivory Towers and out to some of the best state schools around the nation.

For example, tens of millions of dollars in contracts from China have demonstrably been used to establish joint university programs that then went unreported to our federal government.

It’s a troubling comparison. Over the past decade, American institutions began pouring money into counterproductive, divisive DEI infrastructure. Meanwhile, China was spending to gain influence in American academia, accessing research and technology to advance their national interests. It happened under Uncle Sam’s radar, and Congress believes the spending continues unreported today – to the tune of hundreds of millions or billions!

Chinese Funding at University of California - Berkeley

UC Berkeley has accepted $790.8 million from foreign sources since 2013, including a staggering amount of Chinese funding.   

China sent $87.5 million to UC Berkeley, more than any other country. The figure doesn’t include $59.4 million from Hong Kong and $57.5 million from Taiwan, which are reported separately.    

The two largest Chinese contracts — worth $19 million and $15 million — were to help fund the Tsinghua-Berkeley Shenzhen Institute (TBSI), a partnership with Tsinghua University that has campuses at Berkeley and in Shenzhen, China.   

In September 2024, an investigation from the House Select Committee on the Chinese Communist Party concluded that the institute and similar programs “serve as conduits for transferring critical U.S. technologies and expertise to China, including to entities linked to China’s defense machine and the security apparatus it uses to facilitate human rights abuses.”   

As of September 2024, following the committee’s investigation, UC Berkeley leadership said they had “started the process of relinquishing all ownership in TBSI.”   

Chinese Funding at Georgia Tech

The Georgia Institute of Technology has accepted $162.8 million from foreign sources since 2013. 

China has spent at least $32.3M with the school in that time period, and at least $18.3 million worth of those contracts helped fund the Georgia Tech-Shenzhen Institute (GTSI). Like Berkeley’s, it’s another partnership with Tsinghua University that has campuses in Georgia and Shenzhen, China. 

As university officials learned of the coming congressional report, they acted even faster than Berkeley did. Days before the House report was released, Georgia Tech announced it was ending its partnership with the Shenzhen Institute. The 300 current GTSI students will still be allowed to finish their degrees. 

CONGRESSIONAL INVESTIGATION

The actual amount of Chinese funding flowing into UC Berkeley is potentially much higher than $87.5 million, and at Georgia Tech it’s perhaps much higher than $32.3 million.

The Committee “uncovered significant failures in the reporting of foreign funding by UC Berkeley and Georgia Tech under section 117 of the Higher Education Act” and projected there are “likely hundreds of millions, if not billions in total” of unreported Chinese gifts sent to American universities. 

“The Chinese Communist Party is driving its military advancements through US taxpayer-funded research and through joint US-[People's Republic of China] institutes in China. Georgia Tech did the right thing for US national security by shutting down its PRC-based joint institute, and UC Berkeley and other universities should follow suit,” Rep. John Moolenaar (R-MI) said at the time.

In its January 2024 report, the Select Committee on the CCP spelled out how the party “exercises control” over these joint programs, saying they are “designed to favor Beijing’s interests.” There are more than 1,500 collaborations with more than 300 U.S. universities and other entities. “Notably, 21 of these US-[China] partnerships are joint institutes that are predominantly focused on STEM fields critical to military and economic superiority.”

Tsinghua and the other participating Chinese universities are “jointly administered by Ministry of Education and SASTIND [State Administration of Science, Technology and Industry for National Defense], which…is an arm of the Chinse government whose stated purposes include ‘strengthening military forces with additional personnel and more advance equipment.’”

Tsinghua University also “has a documented history of serving the PRC’s national security and defense apparatus, including involvement in defense research and alleged cyberattacks targeting various international entities,” members of the committee reported.

HOW DID WE MISS THIS?

Yes, the law requires reporting on foreign funding, but these joint projects are often established as their own legal entities – separate from their American university partners. Then the schools have failed to report it exhaustively, and the federal government has sometimes been slow to provide oversight.

Georgia Tech argued GTSI was a separate legal entity and not an “intermediary,” which would trigger reporting. That was false, the committee concluded.

From the House report:

Of relevance, Georgia Tech’s statements of milestone events and promotional information state, “At GTSI, [Georgia Tech] students will earn the same Georgia Tech diplomas as that [sic] issued in Atlanta.” Yet, Georgia Tech contends GTSI is neither an “additional location” nor “branch campus” of Georgia Tech under the [law]. Georgia Tech asserts, instead…that GTSI is simply an “administrative entity” of the “joint initiative between Georgia Tech, Tianjin University, and the Shenzhen Municipal People’s Government,” and that it is an “off-campus instructional site for Georgia Tech students to pursue a master’s degree.” Given GTSI carries out many of the functional duties of an “additional location” or “branch campus,” it certainly appears to have a much closer affiliation with Georgia Tech than a mere “administrative entity.” Bottom line, Georgia Tech failed to comply with section 117 in a timely manner.

For all that legal and technical jargon, Georgia Tech’s joint program certainly got past the spirit of reporting requirements. According to the committee report, the university’s General Counsel began reviewing the school’s reporting in 2022 and determined there was a contract of $17 million “’between’ GTSI and Georgia Tech that originated in 2016, the year Georgia Tech signed a three-way agreement to develop [the] join institute…The $17 million was finally disclosed in Georga Tech’s report to the Department in January 2024 – eight years after inception. Georgia Tech said the money was ‘unintentionally omitted.’”

Berkeley made the same claim – that TBSI was a separate legal entity that they didn’t need to report. And they added a second defense: their contracts were with TEFNA (the Tsinghua Education Foundation of North America). TEFNA is simply an American-based arm of Tsinghua University, but its U.S. base means it’s technically not a “foreign” entity under the law.

According to the House Select Committee on the CCP, the Trump administration carried out various compliance investigations with American universities to ensure the accuracy of their reporting on foreign gifts and contracts. “These investigations by the Trump administration discovered $6.5 billion in previously undisclosed gifts and contributions…from countries that pose serious national security threats. The investigations found many schools failed to disclose more than half of foreign gifts and contracts they received.” A similar 2019 staff report from the U.S. Senate found “up to 70 percent of institutions reviewed failed to comply with section 117 and those that do comply often underreport. These findings showed widespread lack of compliance even though [they] have been in place for over 30 years.”

By contrast, the Biden administration has not opened any new compliance investigations under Secretary of Education Miguel Cardona.

MORE CHINA CASH

Joint programs are not the only way China has gotten a considerable foothold in American universities. Another example at Georgia Tech seems so on the nose it could be part of a spy movie:

The university partnered with the Tianjin International Center for Nanoparticles and Nanosystems to create the world’s first semiconductor made of graphene in January 2024, which could help military computers run faster.

Who founded the Tianjin Center in 2015? That would be an American scientist who fled to China after receiving $5 million from the Department of Defense to research graphene’s applications to the military.

In recent Open the Books reporting on Ohio State University, we found yet another researcher appropriating our intellectual property.

In 2021, Ohio State researcher Song Guo Zheng pleaded guilty in Ohio to fraud for spending a $4.1 million grant from the National Institutes of Health on immunology research for China. Zheng — a member of the Thousand Talents Program, through which China recruits foreign researchers — never disclosed his Chinese affiliations to Ohio State when he was hired in 2013.

He was sentenced to 37 months in prison and fined $3.8 million for lying on applications and using the grants to develop China’s expertise in the areas of rheumatology and immunology.

“For years the defendant concealed his participation in Chinese government talent recruitment programs, hiding his affiliations with at least five research institutions in China. Zheng greedily took federal research dollars and prevented others from receiving funding for critical research in support of medical advances.” - Alan E. Kohler Jr., Assistant Director, FBI Counterintelligence Division.

CONCLUSION

With hundreds of millions or billions behind China’s efforts to penetrate American academia, it’s critical that universities take a closer look at their own reporting and ensure every foreign dollar makes its way into their government reporting.

Similarly, Congress should take action on the House Select Committee’s findings, clarifying the law as needed in order to capture every dime of foreign influence.