The launch of China’s DeepSeek caused deep tremors in the US. How could a Chinese company produce a cutting-edge technology on par with the deep pocketed US firms such as OpenAI or Google — despite export bans on the latest chip technology and at a fraction of OpenAI’s costs? Within a day, US tech stock lost $1tn in value. President Trump called it a ‘wake-up’ call for the US tech industry. But limiting the conversation to the tech industry would be a mistake.
Many have drawn attention to the fact that DeepSeek’s CEO, Liang Wenfeng, has a bachelor’s and master’s degree in engineering from Zhejiang University, Hangzhou. But Wenfeng’s qualification from a Chinese university is not an exception at DeepSeek. All of the nearly 200 or so engineers who contributed to the paper launching DeepSeek R1 are from Chinese universities, as Paul Taylor notes in his piece ‘AI Wars’ for the London Review of Books.
For those who have closely followed developments in global higher education, this should come as no surprise. China is not only challenging Western tech supremacy but also the dominance of Western higher education institutions — a shift that has been unfolding for years. The Times Higher Education World University Rankings 2025 confirms this: ambitious Chinese universities like Tsinghua and Peking are closing in on the top 10. Between 2016 and 2025, Tsinghua climbed from 47th to 12th place, and Peking from 42nd to 13th.
Yet, a closer look at the rankings reveals an important distinction. While Tsinghua and Peking excel in teaching, research environment, and industry partnerships, they lag significantly in ‘international outlook’. Tsinghua, ranked 12th, scores 49.8 on this metric compared to Imperial College London’s 98.3 (ranked 9th). One key factor: only 9% of Tsinghua’s students are international, compared to Imperial’s 60%.
Another significant difference in performance is in the arts and humanities, where Chinese — and more broadly, pan-Asian — universities still have ground to cover. In this field, the National University of Singapore ranks highest outside Europe and North America at 25th, with Peking and Tsinghua trailing at 38th and 39th.
Western universities, particularly in the UK, face financial instability and regulatory uncertainty threatening to erode their extant competitive advantage. Before I began writing Strategic Leadership of Change in Higher Education (3rd ed., Taylor & Francis, forthcoming 2025), I surveyed higher education leaders from universities and countries around the world, asking them to rank the top challenges from a list of ten. Among respondents from Europe, North America, and Australia, financial sustainability, regulation and policy, and research quality and impact consistently ranked highest — above teaching quality and impact. (I also reached out to leaders at Asian universities, including the National University of Singapore, but did not receive a response.)
In the UK, one in four institutions is cutting jobs to balance budgets, and the arts and humanities often bear the brunt of these cuts, as noted by Prof Thea Pitman and Prof Emma Cayley, Co-chairs, Arts and Humanities Alliance.
On one hand, domestic funding pressures are causing UK universities to retreat from disciplines that have historically contributed to their international prestige. On the other, intensifying competition in STEM threatens the sustainability of lower-ranked institutions, which lack the resources to keep pace with elite Chinese and Western universities alike.
As I considered the myriad of issues facing universities across Australia, US, UK and Canada while writing Strategic Leadership of Change in Higher Education, a question on which I kept reflecting is whether the moment we are in now calls for more than just institutional and leadership and governance change. COVID had already changed how leadership and governance functioned, making the need for thoughtful digitisation even more urgent as we emerged post-pandemic.
But now more than ever, a fundamental reassessment of the state of higher education is necessary. The challenges universities face today — financial sustainability, global competition, and shifting research priorities — are not issues universities can, or should, navigate alone. Governments that seek technological innovation and economic growth must recognise that higher education is a pillar of that ambition, not an afterthought.
The ‘wake-up call’ extends beyond tech and higher education; it is a call for policymakers to rethink their investment strategies. Universities, too, must reconsider their stance, not as isolated competitors but as part of a broader ecosystem where collaboration is essential. As institutions scramble to maintain their individual positions, we must also ask how our fragmented approach to resource allocation is impacting regional, national, and global competitiveness. This is a broader challenge than we are currently prepared for — one that demands collective action and international leadership and enlightened governance willing to confront these issues head-on.
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