After the World War Ⅱ, the influence of the Communist Party had expanded rapidly. The colonist government in Singapore and Malaysia worried that the members of the Communist Party and the pro-communist public would utilize Chinese education as an apparatus to disseminate the Communist ideology. As a result, they changed their loose management on Chinese education and strengthened the management and controlling policies. On the other hand, the communication between the Chinese people and the people of Singapore and Malaysia had been prohibited so as to prevent the seepage of communists. The prevention measures taken by the colonist government had suppressed the development space for the Chinese education. The policy that inhibited the communication of the two countries caused the Chinese education facing with shortage of teachers, while the students were caught in a dilemma of finding no way for their Chinese education. Having seen students caught by this situation, the leader of Fujian Clan, Mr Tan Lark Sye proposed in 1950 and 1953 respectively that the Chinese should set up their university themselves to solve the predicament currently faced by the Chinese education. Under the complicated political and racial environment, the Chinese society to set up their university themselves was not only a simple education issue. It had become an issue involving a whirlpool of political and racial tension. Through an analysis of the process of the establishment of Nanyang University (herein after abbreviated as "NU"), this essay examines the reaction of the colonist government and the response of the other races, thereby discussing the political, educational and racial contradictions extended in between. This essay comprises three parts: Firstly, the key force urging the establishment of NU has been discussed; secondly, the contradictions between the colonist government and the Chinese society upon the setup of NU have been analyzed; lastly, the responses of the Malay and the discrepancies between the two races have been further elaborated.