When Nanyang University was founded at Jurong, Singapore in 1956, it seemed that the Chinese people in Malaya had made their dream to establish a Chinese university come true. When Singapore separated from Federation of Malaysia in 1965, Nanyang University became a ”foreign” university. When the Ministry of Education of Malaysia announced to put restrictions on studying abroad, the Malaysian Chinese thus wanted to have their own university. This proposed university was called Merdeka University. The project had never been materialized. Nonetheless, the proposed project had great impact on the development of Chinese education in Malaysia. In this paper, I try to make an inquiry into the emergence, process and effect of the Merdeka University.