China's University Spending Mysteriously Dropped to $528M—Did It Really, or Are Schools Hiding It?

For years, China was portrayed as the existential threat to American higher education—a foreign adversary pouring billions into universities to steal technology, recruit researchers, and undermine academic integrity.

Then, suddenly, the threat seemed to disappear.

According to new Department of Education data released Tuesday, China disclosed just $528 million in funding to U.S. universities in 2025. That's less than half what tiny Qatar spent. It's a fraction of what China reportedly spent in previous years when funding sometimes exceeded $1 billion annually.

The dramatic decline should be good news. After years of warnings about Chinese influence buying access to American research and technology, it appears the threat has diminished significantly.

Except there's a problem with this narrative: It might not be true.

The same data release that shows China's supposed decline also reveals that universities reported over $2 billion in foreign funding late between February and December 2025—in direct violation of federal disclosure requirements. Four major institutions are now under federal investigation for inaccurate and untimely disclosures.

So here's the question that should trouble anyone tracking foreign influence in higher education: Did Chinese funding to American universities actually plummet? Or did universities just stop reporting it accurately—and only got caught when the Trump administration forced new transparency?

The Billions That Vanished

To understand why China's $528 million figure is suspicious, you need to know what came before.

In the years leading up to 2020, China was consistently identified as one of the largest sources of foreign funding to American universities. Reports and disclosures suggested Chinese entities—government agencies, universities, companies, and individuals—were providing well over $1 billion annually to U.S. institutions.

The money flowed through multiple channels:

Confucius Institutes: Chinese government-funded language and cultural centers operating on American campuses. At their peak, over 100 U.S. universities hosted Confucius Institutes funded by Beijing.

Research partnerships: Joint projects between Chinese and American universities, often funded by Chinese government agencies or state-owned enterprises.

Talent recruitment programs: China's "Thousand Talents Plan" and similar initiatives that recruited American researchers, sometimes paying them to share research and technology.

Student support: Funding for Chinese students studying at American universities, sometimes tied to specific programs or research areas.

Direct gifts: Donations from Chinese individuals, companies, and organizations to American universities for various purposes.

Congressional investigations, media reports, and federal enforcement actions documented billions in Chinese funding during the 2010s and early 2020s. Then enforcement tightened, scrutiny increased, and reported Chinese funding began declining.

By 2025, it had supposedly dropped to $528 million—less than half what Qatar spent, about the same as Switzerland, and dramatically less than what China had previously disclosed.

The official explanation is straightforward: Increased scrutiny, closed Confucius Institutes, restrictions on research partnerships, and heightened awareness of Chinese influence operations caused the funding to dry up. Universities got more cautious about accepting Chinese money. China pulled back from controversial programs. The threat diminished.

But there's an alternative explanation that's harder to dismiss: The funding didn't disappear. The reporting did.

The $2 Billion That Came Late

Here's why the alternative explanation deserves serious consideration: At the same time universities disclosed this dramatic drop in Chinese funding, they also admitted to hiding $2 billion in total foreign funding by reporting it late.

Between February 28, 2025, and December 16, 2025, more than $2 billion in reportable foreign gifts and contracts were disclosed late, in direct violation of Section 117 of the Higher Education Act.

That's not a typo. Two billion dollars in foreign funding that universities were legally required to report in a timely manner came in late—after deadlines had passed, after public attention had moved on, after scrutiny had diminished.

The late reporting wasn't evenly distributed or random. Four universities are now under federal investigation for inaccurate and untimely foreign funding disclosures:

• Harvard University
• University of Pennsylvania
• University of California, Berkeley
• University of Michigan

These aren't small regional colleges struggling with compliance. These are elite research universities with sophisticated administrative systems, extensive legal departments, and long experience with federal reporting requirements.

If these institutions can't—or won't—report foreign funding accurately and on time, what confidence should we have in the broader data showing Chinese funding declined?

What the Investigations Reveal

The Department of Education hasn't publicly detailed exactly what Harvard, Penn, Berkeley, and Michigan allegedly failed to disclose or disclosed late. But the fact that investigations were launched suggests the problems go beyond simple administrative delays.

Section 117 requires institutions receiving federal financial assistance to disclose foreign source gifts and contracts valued at $250,000 or more annually. The requirements are clear:

• Disclose gifts and contracts from foreign sources
• Report transactions over $250,000
• Submit disclosures within specified timeframes
• Provide accurate information about funding sources and amounts

Universities that fail to comply face serious consequences:

• Civil enforcement actions by the Department of Justice
• Recovery of enforcement costs from the institution
• Loss of eligibility for Title IV federal student aid programs

That last penalty is potentially devastating. Losing access to federal student loans and grants would make most universities financially unsustainable and unaffordable for most students.

Yet despite these severe potential consequences, universities reported $2 billion late and four major institutions are under investigation for compliance failures.

This raises obvious questions: What were they hiding? Why did they report late? And how much unreported or inaccurately reported foreign funding—including from China—still hasn't been disclosed?

The Timing Is Suspicious

The timeline of Chinese funding's apparent decline coincides suspiciously with increased scrutiny and enforcement.

2018-2020: Congressional investigations, FBI warnings, and media reports highlight Chinese funding and influence operations at universities. Pressure builds for greater transparency and restrictions.

2020-2022: Trump administration increases Section 117 enforcement. Universities begin closing Confucius Institutes. Reported Chinese funding starts declining.

2023-2024: Biden administration enforcement becomes less aggressive. Public attention shifts to other issues. Chinese funding continues declining in reported data.

2025: Trump administration returns, launches new transparency portal, initiates investigations into Harvard, Penn, Berkeley, and Michigan. Data shows Chinese funding at $528 million but $2 billion in late reporting across all sources.

One interpretation: Increased scrutiny worked. Chinese funding actually declined. Universities got more cautious. The threat diminished.

Alternative interpretation: Universities learned that reporting Chinese funding brought scrutiny, so they stopped reporting it accurately. Funding continued but went underground or was disguised as coming from other sources.

Which interpretation is correct? Without the full investigation results and comprehensive audits, we can't know definitively. But the $2 billion in late reporting and ongoing investigations suggest the decline in reported Chinese funding may not reflect reality.

How Chinese Funding Could Be Hidden

If Chinese funding to American universities hasn't actually declined as much as reported data suggests, how would it be hidden?

Several mechanisms could allow Chinese money to flow to universities without appearing in Section 117 disclosures:

Shell organizations: Funding could be routed through entities that don't appear to be Chinese-controlled. A Hong Kong company, a Singapore subsidiary, or a nominally independent foundation could funnel Chinese government or SOE money to universities without triggering disclosure requirements focused on direct Chinese sources.

Individual donors: Chinese nationals living abroad or with foreign citizenship could donate money that originates from Chinese sources but appears in disclosures as coming from individuals in other countries.

Research partnerships structured differently: Instead of direct contracts with Chinese entities, universities could partner with multinational companies that receive Chinese funding, creating layers of separation.

Below reporting thresholds: Breaking larger funding streams into smaller transactions under $250,000 to avoid triggering disclosure requirements.

Misclassification: Reporting Chinese funding as coming from Hong Kong, Macau, or other entities technically separate from mainland China.

Student funding laundering: Chinese government-sponsored students paying full tuition that appears as student revenue rather than foreign funding.

Timing games: Delaying receipt or processing of Chinese funding to push it into different reporting periods or avoid disclosure entirely.

None of these mechanisms would be legal under Section 117 if they're deliberately designed to avoid disclosure requirements. But they could explain why reported Chinese funding has declined even if actual Chinese money flowing to universities hasn't decreased proportionally.

The $2 billion in late reporting suggests universities aren't always compliant with disclosure requirements. If they'll report $2 billion late, what else might they not report accurately?

What We Know From the Investigations

The Department of Education's investigations into Harvard, Penn, Berkeley, and Michigan were announced publicly but details remain limited. However, the announcement itself is revealing.

Education Secretary Linda McMahon's statement emphasized "inaccurate and untimely foreign source gift and contract disclosures." The investigations were launched "amid reports of inaccurate and untimely foreign source gift and contract disclosures."

"Inaccurate" disclosures could mean several things:

• Underreporting amounts
• Misidentifying sources
• Failing to disclose transactions that should have been reported
• Providing misleading information about funding purposes or terms

"Untimely" disclosures means reporting late—which we know happened to the tune of $2 billion across all universities.

The combination of "inaccurate and untimely" suggests these aren't simple administrative errors. They point to systemic problems with how universities track, categorize, and report foreign funding.

If Harvard—with a $50+ billion endowment and vast administrative resources—can't or won't report foreign funding accurately and on time, what does that say about institutional incentives?

The Confucius Institute Factor

One documented area where Chinese funding demonstrably declined is Confucius Institutes.

At their peak around 2019, over 100 American universities hosted Confucius Institutes—Chinese government-funded centers ostensibly teaching Chinese language and culture. The institutes provided funding for staff, programs, and sometimes faculty positions.

Following congressional investigations, FBI warnings, and Department of Education scrutiny, universities began closing Confucius Institutes. By 2025, only a handful remain at U.S. institutions.

This represents a real decline in one visible channel of Chinese funding. The closures were public, the funding reduction was documented, and the change was measurable.

But Confucius Institutes never represented the totality of Chinese funding to American universities. They were one channel among many—research partnerships, student support, direct gifts, and various other mechanisms accounted for billions more.

The closure of Confucius Institutes doesn't explain why total reported Chinese funding declined to $528 million. Even without Confucius Institutes, Chinese funding through other channels should exceed that figure based on previous disclosure patterns.

So either Chinese funding actually collapsed across all channels simultaneously—a dramatic and unusual change—or much of that funding is still flowing but not being reported accurately.

The Harvard-China Connection

Harvard's inclusion in the foreign funding investigations is particularly significant given the university's documented Chinese connections.

Harvard has disclosed receiving over $610 million from "countries of concern" since 1986—more than any other American institution. While "countries of concern" isn't limited to China, China is certainly included in that designation.

The university has faced multiple controversies related to Chinese funding and influence:

Charles Lieber case: Harvard chemistry professor Charles Lieber was convicted in 2021 for lying about his participation in China's Thousand Talents Plan and his affiliation with Wuhan University of Technology. He received payments from Chinese sources that weren't properly disclosed.

Undisclosed contracts: Federal investigations found Harvard failed to disclose some contracts and gifts from Chinese sources, leading to prior enforcement actions.

Research partnerships: Harvard maintains extensive research collaborations with Chinese institutions, some of which have raised national security concerns.

If Harvard's current investigation reveals additional undisclosed or inaccurately reported Chinese funding, it would support the theory that the apparent decline in Chinese funding is partly an artifact of poor reporting rather than actual funding reduction.

Berkeley's Unique Vulnerability

UC Berkeley's investigation is notable because the university sits at the intersection of cutting-edge research and significant Chinese connections.

Berkeley conducts enormous amounts of research in fields with both civilian and military applications: artificial intelligence, quantum computing, advanced materials, robotics, and biotechnology. This research attracts interest from foreign entities seeking access to American technological capabilities.

The university also has:

Large Chinese student population: Berkeley enrolls thousands of Chinese students, some of whom receive support from Chinese government scholarships or programs.

Research collaborations: Partnerships with Chinese universities and research institutions across multiple fields.

Silicon Valley connections: Proximity to tech companies creates opportunities for research funding that might include Chinese investment or participation.

Faculty recruitment: Berkeley faculty have sometimes participated in Chinese talent programs, either knowingly or unknowingly.

If Berkeley has been underreporting or misreporting Chinese funding, it could indicate broader patterns at research universities where Chinese connections are extensive but disclosure is incomplete.

The Michigan Pattern

University of Michigan's investigation adds another data point. Michigan, like Berkeley and Harvard, is a major research university with significant international connections including to China.

Michigan has faced previous scrutiny over:

Confucius Institute: Michigan hosted a Confucius Institute until 2019, when it was closed following federal pressure.

Research partnerships: Collaborations with Chinese institutions in various fields.

Student enrollment: Substantial Chinese student population.

The inclusion of Michigan in the investigations suggests the compliance problems aren't limited to Ivy League schools or California institutions. The pattern appears to span different types of elite research universities across the country.

What $528 Million Actually Represents

Even taking the $528 million figure at face value, it's worth examining what it represents.

$528 million in disclosed Chinese funding to American universities in one year is still substantial. It's:

• More than what most countries spend on U.S. universities
• Enough to fund extensive research programs
• Sufficient to support thousands of students
• Capable of creating significant dependencies and relationships

The fact that $528 million seems low compared to previous Chinese funding levels doesn't mean it's insignificant in absolute terms.

But the question remains: Is $528 million the real total, or is it what universities felt comfortable disclosing after increased scrutiny made reporting the full amount problematic?

The Political Dimension

The Trump administration's emphasis on foreign funding transparency—particularly regarding China—adds a political layer to this issue.

Education Secretary Linda McMahon specifically criticized "years of neglect by the Biden Administration, which failed to effectively enforce Section 117 and shuttered public-facing accountability instruments."

This framing serves Trump administration political objectives: portraying the previous administration as soft on China and the current administration as restoring accountability.

But the political framing doesn't make the underlying questions less valid. Whether Chinese funding actually declined or just went unreported is important regardless of which administration asks the question.

The new transparency portal at foreignfundinghighered.gov provides more public access to disclosure data than previously available. Whether this transparency reveals that Chinese funding genuinely declined or that reporting was incomplete will become clearer as investigations proceed.

What Other Data Suggests

Beyond the official Section 117 disclosures, other indicators suggest Chinese connections to American universities remain substantial:

Student enrollment: While Chinese student enrollment at U.S. universities has declined from peak levels, it remains significant. Tens of thousands of Chinese students continue studying at American institutions, many with support from Chinese sources.

Research publications: Analysis of academic publications shows ongoing collaboration between American and Chinese researchers across many fields. These collaborations often involve funding from both sides.

Technology transfer: Federal cases involving technology theft and economic espionage continue to identify researchers at American universities with undisclosed Chinese connections or funding.

Visa restrictions: The State Department continues restricting visas for Chinese students in certain sensitive fields, suggesting ongoing concerns about access to American research capabilities.

FBI warnings: The FBI continues warning universities about Chinese intelligence operations and recruitment efforts targeting researchers and students.

These indicators suggest Chinese interest in American university research and capabilities hasn't diminished even if disclosed funding has declined.

The Switzerland Comparison

One way to assess whether China's $528 million figure is plausible is comparing it to other countries.

Switzerland disclosed $451 million in funding to U.S. universities in 2025—nearly as much as China despite being far smaller and having less strategic interest in American research capabilities.

Swiss funding comes primarily from pharmaceutical companies funding medical and biological research. It's largely transparent, well-documented, and non-controversial.

Is it plausible that China—with 1.4 billion people, the world's second-largest economy, and documented strategic interest in American technology and research—now provides only slightly more university funding than Switzerland?

Possible, if Chinese funding genuinely collapsed. Suspicious, if you consider China's sustained interest in American research capabilities and the $2 billion in late reporting that suggests disclosure compliance problems.

What Happens Next

Several developments will help clarify whether Chinese funding actually declined or just went unreported:

Investigation results: The Harvard, Penn, Berkeley, and Michigan investigations may reveal previously undisclosed Chinese funding, indicating broader reporting problems.

Audit expansion: If initial investigations find significant unreported funding, the Department of Education may expand audits to other universities.

Whistleblowers: Faculty, staff, or students aware of unreported Chinese funding may come forward, particularly if investigations create awareness of compliance issues.

Pattern analysis: Comparing reported Chinese funding across many universities may reveal statistical anomalies suggesting underreporting.

Enhanced enforcement: More aggressive Section 117 enforcement may compel universities to disclose funding they previously didn't report.

The Trump administration has made foreign funding transparency a priority. This political focus may succeed in surfacing funding that previous enforcement approaches missed.

The Consequences

If investigations reveal that Chinese funding didn't actually decline to $528 million but instead went unreported, the consequences would be significant:

For universities: Institutions that deliberately underreported Chinese funding could face severe penalties including loss of federal student aid eligibility—potentially devastating their finances.

For U.S.-China relations: Evidence of continued substantial Chinese funding to American universities despite supposed declines would intensify political pressure for restrictions.

For academic research: Revelations of hidden Chinese funding could damage public trust in university research and lead to new restrictions on international collaboration.

For students: If universities lose federal aid eligibility due to compliance violations, students would bear the cost through reduced aid access.

For policy: Confirmation that current disclosure requirements aren't working would likely spur legislation mandating more comprehensive reporting or restricting certain foreign funding.

The Trust Problem

Ultimately, the question of whether Chinese funding actually declined or just went underground is a question about trust.

Do we trust universities to accurately report foreign funding when doing so brings scrutiny and controversy? Do we trust that the massive decline in reported Chinese funding reflects reality rather than compliance failures? Do we trust that the $2 billion in late reporting represents isolated problems rather than systematic underreporting?

The evidence suggests trust should be limited:

• Universities reported $2 billion in foreign funding late
• Four major institutions are under investigation for inaccurate disclosures
• Previous investigations found unreported Chinese funding at multiple universities
• Incentives favor underreporting controversial foreign funding
• Enforcement has been inconsistent across administrations

Given this track record, skepticism about the reported decline in Chinese funding is warranted.

The Bottom Line

China disclosed $528 million in funding to American universities in 2025. That's the official number in the Department of Education data.

But that same data release revealed $2 billion in late reporting and triggered investigations into four major universities for inaccurate disclosures.

So did Chinese funding to American universities actually plummet from billions to half of what Qatar spends? Or did universities learn that reporting Chinese funding brings problems, so they stopped reporting it accurately?

The investigations will provide some answers. But the broader question—whether American universities can be trusted to accurately disclose foreign funding when transparency works against their interests—remains troublingly open.

For years, China was portrayed as the existential threat to American higher education. Billions in Chinese funding supposedly bought influence, stole technology, and compromised academic integrity.

Then the threat apparently disappeared. Chinese funding dropped to $528 million. Problem solved.

Except if the funding didn't actually disappear—if it just went underground while universities stopped reporting it accurately—then the problem isn't solved at all.

It's just hidden.

The Department of Education's foreign funding disclosure portal is available at foreignfundinghighered.gov. Updates covering the period through January 31, 2026, are expected by February 28, 2026. Results of investigations into Harvard, Penn, Berkeley, and Michigan have not been announced.