It was created by the Chinese-American physicist Tsung-Dao Lee and Chinese physics community as an alternative graduate school admission procedure. At that time in China, higher education was still recovering from the Cultural Revolution; school transcripts and recommendation letters were difficult to evaluate. Furthermore, standardized tests such as the Graduate Record Examination were unavailable in China.
The CUSPEA exam is in English and has a similar scope to that of Ph.D. written qualifying exams in major American universities. The questions were prepared by physics professors from participating North American universities -- starting with Columbia University where Lee worked, and eventually expanded to 97 universities. Committees of physicists in China administer and grade the exams. The examinees are usually senior physics majors from top-ranking Chinese universities. Those who passed the exam are followed up by an interview by a small American delegate. The final admission depends on mutual agreement between the applicant and participating physics departments.
About 100 Chinese students went to the US every year through the CUSPEA exams, and the total number is 915. Over the years, the three universities with the most students passed the exam are (numbers in the parenthses indicate the numbers of students) University of Science and Technology of China (218), Peking University (206) and Fudan University (127).
CUSPEA was so successful that other similar exams soon were created, such as CUSBEA for biochemistry and "Shiing-Shen Chern Project" (陈省身项目) for mathematics. All were stopped in the late 80s in favor of more standard exams.
In the early years in 1990s, after several years of suspension of the CUSPEA exam, a new program called Mini-CUSPEA is created. It is called "mini" in the sense that the Chinese university involved is shrunk to one -- Fudan University, and on the side of the U.S., the target is shrunk to three universities: Columbia University, New York University, and the City College of New York.
Every year, about 6-10 students are selected through the written exams and the interviews similar to the ones used in the time of CUSPEA, and they are admitted by the above three U.S. universities. Once admitted, the usual requirements for TOEFL and GRE for Chinese students are waived for the Mini-CUSPEA participants.
Since 2007, the Mini-CUSPEA has started to expand. The Chinese universities involved are not only Fudan, but also including Peking University, Tsinghua University, and some other top universities. In the US side, the expansion is also planned.