Abstract: In the wake of its entrance into a popular stage in 2003, and for the purposes of raising further its core competitive power and building high-level universities, Chinese higher education is confronted with the prominent issues that in the educational field the system of nonfinancial financing is not yet sound enough and that the system or policy of higher educational financing and investment can not satisfy the requirements of the higher education development Against such background, the present article searches usefully into such aspects as the necessity and reality, the feasibility and status quo of the higher education’s intervention of the capital market, the perfection of the capital market system,the policy choice for the intervention, etc so that the author could do their bit towards the restructure of the Chinese public higher educational system, towards the system of modern universities, and towards the establishment of new financing channels for higher education

Key words: colleges and universities, capital market, institutional innovation, investment system, financing channel