Purpose: This article aims to review the latest developments of the higher education sector in China since the mid-1990s by focusing on the expansion of university education. Design/methodology/approach: It is argued that while massification of higher education is an important indication of the progress in China's higher education system, the quest for world-class universities indicates China's ambition to earn international reputation in higher education sector compatible with its increasing economic power. Findings: The driving force of these two developments is from the state, which demonstrates the dominant role of the Chinese government in higher education policy and administration. However, the ambitious state constitutes both a driving force and a constraint for China's higher education. The strengthening administrative control accompanied by the financial benefits from the government has led to bureaucratization of China's universities. China's world-class pursuit necessitates a fundamental change of the existing pattern of relationship between the state and university and university governance model. Practical Implications: The strategic plan to build up world-class universities shows that China is not satisfied with the quantitative growth of its higher education, but is seeking to achieve a breakthrough in quality higher education. Originality/value: The paper explains how China's desire to achieve world class status within the area of higher education is being achieved. (Contains 3 tables and 2 notes.)