Boosting the skills base in research and development is fundamental to future growth plans.

The Suzhou industrial park needs around 40,000 graduates a year to maintain its current rate of development. It is a need that the Xi’an Jiaotong-Liverpool University is perfectly positioned to help fulfil.

And the research and development dimension, working with the proliferation of world businesses descending on Suzhou, has equally obvious benefits back home for the University of Liverpool.

PROFESSOR Jeremy Smith, who graduated from Liverpool University and has been based in China for them as Vice-President – Academic Affairs and Academic Dean at Suzhou since 2005, said: "This university is set up purely for research, and cannot be run for a profit. The University of Liverpool sees it as creating very good research links between ourselves and industry.

"Having a presence here in China helps to develop research links with multi-national companies." In their first year, Chinese students who study at Suzhou typically spend 40% of their time learning English.

For the remaining three years of their courses, they are taught exclusively in English.

The English Language centre at the university currently has a staff of 42, and when it is fully developed will have 100, making it the biggest of its type in the world.

"We get a higher failure rate in year two than in year one because their level of English is fully exposed when all modules are delivered in English," said Professor Smith.

"There is a real demand in China for well-trained recruits who can communicate in English."

Students can opt to spend two of their four years studying in Liverpool, or can spend one year here after completing four years in China. In the academic year just ending, 90 students have been based in Liverpool, but that figure is expected to rapidly rise to something like 1,000 a year.

The methods of teaching comes as something of a shock to many Chinese students. Traditionally Chinese education involves learning by rote, but China has realised that this needs to change – another reason for its enthusiastic engagement with Liverpool University.

"Our aim is to fuse the best practice from the Chinese and UK education systems," said Professor Smith. "Our approach is to gradually move from passive learning by rote to more active learning."

It costs £5,000 a year to send a student to the university, but, with China’s one child per family policy, that is not proving an obstacle for the increasingly wealthy middle classes who want to see their children do well.

The courses in the progressively expanding curriculum focus on subjects like science, technology, business and engineering.

"Chinese students are very strong in mathematics, and students who have gone to Liverpool have significantly outperformed Liverpool students in this subject," said Professor Smith said: "By studying with us, they will acquire mastery of English, which China sees as the international language, team working skills and communications skills."

The university plans to work with the city of Liverpool and involve itself in Expo 2010 in Shanghai, and there is talk of students spending their vacation time helping on the Liverpool stand.

"We want to raise our brand awareness within China," said Professor Smith. "We will also be targeting international companies for scholarships for students.

Professor Smith added: "The students will be our best ambassadors."

Professor Youmin Xi, executive president of the university, said: "After four years study at the university, our students will have an international outlook, be able to compete internationally, have a solid foundation and all-round knowledge, and have the courage to explore and innovate."

The Chinese have, at least for the moment, stopped issuing licenses for joint venture universities, putting Liverpool in a very strong position to develop without further competition from the UK.

Ian Crawford, executive director of the British Chamber of Commerce in Shanghai, said: "British universities have been unbelievably successful in China, and British education has a very good brand here. For a while, there were more Chinese students going to Great Britain than America."

Mr Luo He Qing, director of the investment promotion department at Shanghai Foreign Investment Development Board, said: "I think the university is very beneficial for bilateral communication.

"These students, whether they find jobs in Britain or come back here, will have Liverpool impressed in their brains and they will make Liverpool a very important economic and commercial partner to their business."