Looking at the rise of world-class universities through history, creating an institutional environment in which universities are relatively autonomous, while also ensuring effective material support from the government is essential for the formation of world-class universities. It is worth examining the deteriorating academic environment in China that is caused by a combination of administrative power and market mechanisms. A basic strategy to develop world-class universities in China is to protect universities' relative autonomy and to create a level playing field in the external academic environment along with a relatively relaxed internal university environment.