In 1911, the ancient dynasty was toppled and replaced by a new republic. China experienced significant progress in several spheres of life throughout the Republican era (1912–1949), except for the Anti-Japanese War. When the last Qing dynasty came to an end, China was in the early stages of developing a higher education system. China developed its contemporary higher education system during the republican era, comprised of public universities, private universities, and volunteer institutions. The war with Japan was undoubtedly the most significant event in Chinese history during the Republican era. Modernization of the state and modernization of higher education are inextricably intertwined. This is because higher education modernization is necessary and inevitable due to a state's modernization. Modern state requires modern individual. In retrospect, the higher education system contributed an adequate amount of workers to the country's economic and social. The analysis and historical data illustrate the Chinese system of guaranteeing higher education funds. Additionally, it entails the establishment of an effective and efficient institutional framework to ensure the development process's success. The Chinese higher education fund guarantee system was divided into government subsidies, society contribution, and school production. They all served to bolster the higher education system, erode individuality and enhance collectivism, supply adequate talent for the Chinese revolution's final success, or fortify the relationship between the government and colleges. This demonstrates that China has achieved substantial strides in higher education during the last decades. Throughout the war, the method used to establish the Reformation era is thoroughly analysed. The war's new development has emphasised the importance of a higher education system. As a result, this article covers the evolution of China's higher education system between 1937 to 1945, during Japan's anti-war period. This research uses a descriptive methodology to obtain reliable results. Additionally, secondary data sources such as journals, peer-reviewed publications, books, and articles were consulted to acquire knowledge on the topic.