This article is mainly concerned with the impact of incorporation on changes in public sector higher education in both China and Japan since the 1990s. The article deals with the context and the major policies and processes concerning incorporation of the public sector in the two countries. It then examines influences exerted by incorporation on patterns of governance in the public sectors of China and Japan by focusing on changes in the relationship between government and individual corporations and institutional leaderships and governance structure. Based on a discussion of similarities and differences in incorporation of the public sectors in the two Asian countries and other major OECD countries, and also between China and Japan, the article concludes by identifying a comparative perspective of two models of incorporation.