The global battle to attract the world's best talent is growing.

Around the world, governments are racing to build world-class universities. From Germany's Exzellenz initiative to India's "Institutes of Eminence," the goal is the same: to cultivate institutions that attract and nurture top global talent, conduct cutting-edge research, and drive innovation and growth. But the stakes are high in the United States and China, given the growing competition between the world's two largest economies.

The struggle for leadership in higher education goes beyond prestige. Elite universities affect economic performance in countless ways, including fostering innovation, boosting productivity, and increasing individual incomes. Graduates from top-tier institutions are more likely to become scientists, inventors, and entrepreneurs. At the national level, countries with higher average university quality tend to enjoy faster technological development and higher productivity.

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A few years ago, any comparison between American and Chinese higher education would have been incontrovertible. For decades, American universities have dominated global rankings, with institutions like MIT, Stanford, and Harvard forming the core of innovation centers that have been integral to the country's global scientific leadership and entrepreneurial dynamism. Many of the world's most valuable companies, including Google, Meta, Nvidia, and Tesla, were founded by graduates of elite U.S. universities.

More often than not, those graduates weren't Americans. More than half of America's multibillion-dollar startups have at least one immigrant founder , and a quarter of them were launched by people who first came to the U.S. as international students. This points to a key strength of the U.S. university system: its ability to attract the world's best talent. International students account for 14% of enrollment at top U.S. research universities and 28% at elite institutions, such as Ivy League colleges, Stanford, and MIT.

In the 2023-24 academic year, international students contributed nearly $44 billion to the U.S. economy and supported more than 378,000 jobs.

But continued US dominance in higher education is far from guaranteed. While American (and European) institutions continue to lead global rankings, Chinese universities have been rapidly overtaking them in recent years. In the QS and Times Higher Education rankings, Peking and Tsinghua universities have cracked the top 20. And in the Nature 2025 Index, eight of the top ten global research institutions are based in China, with Harvard and Germany's Max Planck Society being the only Western institutions to make the cut.

Furthermore, Zhejiang University, inspired by Stanford, has helped transform Hangzhou into a Chinese Silicon Valley, with a vibrant startup ecosystem backed by strong government support and active university-industry collaboration. The AI powerhouse DeepSeek emerged in Hangzhou.

Chinese universities are particularly strong in so-called STEM fields (science, technology, engineering, and mathematics). China now produces some two million science and engineering graduates annually, more than double the number in the United States. Engineering degrees comprise 33% of all undergraduate qualifications in China, compared with just 8% in the US, and more than 600 Chinese universities now offer undergraduate programs in AI. Today, nearly half of the world's leading AI researchers are of Chinese origin, and an increasing number of them choose to work in China.

These developments are not accidental. Rather, they reflect three decades of sustained government commitment, exemplified by initiatives such as Project 985 and the First-Class Double Construction program. And continued progress is virtually guaranteed: earlier this year, China launched a national strategy aimed at transforming the country into a “globally influential education powerhouse” by 2035, particularly in areas such as artificial intelligence, semiconductors, and robotics.

China's drive to lead higher education will undoubtedly face considerable headwinds. Cutting-edge research and groundbreaking innovation demand intellectual and academic freedom : the freedom to challenge prevailing ideas, explore new concepts, and update ways of thinking. As critics have warned, the Chinese Communist Party's strict control over universities and the media is not conducive to any of this.

Nevertheless, China's commitment to strengthening higher education is clear. The same cannot be said of the United States, where President Donald Trump's administration has declared war on leading universities in the name of combating alleged ideological bias. This has included freezing billions of dollars in research funding and demanding sweeping reforms from institutions like Harvard and Columbia, from curriculum changes to the elimination of diversity programs. Meanwhile, the Trump administration has sought to revoke and restrict visas for international students.

Although the Trump administration's attacks have met with some resistance from universities, there has been at least the same capitulation. Now, confidence in higher education is plummeting, and foreign applications are falling sharply—a trend undoubtedly exacerbated by Trump's broader immigration crackdown. These developments jeopardize not only U.S. academic freedom, but also America's longstanding economic, scientific, and technological advantage.

One can only hope that the Trump administration's attacks on higher education prove short-lived, and that the United States recommits to promoting academic freedom, welcoming international students, and supporting universities as incubators of innovative ideas. With China investing heavily in building world-class universities, courting foreign talent, and strengthening ties between industry and academia, the United States cannot afford to take its academic primacy for granted. How the global "brain race" unfolds could affect technological leadership, economic power, and geopolitical influence for decades to come.

(*) Professor of Economics at Korea University, he is a former chief economist at the Asian Development Bank and a former senior advisor on international economic affairs to the President of South Korea.