CHINA:A Chinese university has banned hundreds of students from sitting their finals because it believes the students spent hundreds of thousands of yuan in tuition fees on buying into the country's booming stock market instead.
The Hebei University of Technology, which is located in the province adjoining Beijing, has banned 440 students from sitting their exams because they owe more than 14 million yuan (€1.3 million) in tuition fees. It has accused the students of using the money to speculate on the stock market.
"We discovered that some of the students have put their tuition money into banks to accrue interest, or play the stock market, or do business . . . it's obvious they are maliciously withholding tuition fees," university spokesman Qu Zhenguang told the Beijing Times.
School data showed that more than 2,000 students owed more than 50 million yuan (€4.6 million) in unpaid fees last October, but many had since paid up.
It is the latest example of how sharply rising prices - consumer price inflation hit an 11-year high of 6.9 per cent in November - are a threat to broader social stability. Inflation has driven food prices sky high, and has also made people stop putting their money into bank accounts and into the stock market instead. This is potentially risky in a country where people tend to save about 40 per cent of their income.
The government in Beijing, fearful of the fallout if there is a meltdown on the stock market and a lot of small investors lose all their savings, is trying to cool investor ardour for shares, but is finding it an uphill battle.
In the past two years, an unprecedented stock market rally has pushed the Shanghai share index up more than 500 per cent, though there are signs that it is easing in the past weeks.
Hundreds of millions of share-owning accounts have been opened by China's growing middle class, even though it is only three decades since investment in shares was deemed an evil capitalist tool by the zealous Communist government of Mao Zedong.
In an effort to narrow a yawning wealth gap between the countryside and the rich cities of the eastern seaboard and the southern coast, China has abolished different kinds of tuition fees for students from the hinterland who want to go to college and made student loans more widely available.
But college remains an expensive proposition for most rural Chinese and many go into debt to send their child to third level. Some students at the Hebei University said they were too poor to pay the fees.
"My home is in the countryside, and our annual income is only a few thousand yuan," said architecture student Liu Qingsong, who has been banned from sitting his finals because he was unable to pay 27,000 yuan (€2,500) in fees, the newspaper reported.