As China has appeared only recently as an important knowledge producer with growing global economic significance, little is known internationally about how these processes develop and are managed within China. The rapidly expanding Chinese higher education system is playing an increasingly important role in China's knowledge economy and therefore in the global knowledge society. This paper reviews historically the changing role of Chinese universities from the planned economy to the knowledge economy, analyses their contribution of knowledge and knowledge workers, and critically reflects on the mechanisms driving or confining their future contribution to the knowledge economy. (Contains 2 tables.)