In China, the ladder of success has always been climbed by degrees. In imperial times, mastery of the Confucian classics and poetic expression might have earned a young scholar the juren degree at the provincial level, or if he passed the triennial metropolitan exam, even the coveted jinshi degree and a sweet posting in the upper reaches of the bureaucracy.
That all changed with the twilight years of the Qing dynasty and through the 20th century when a scientific and technical education became increasingly valued – until by the 1980s, technocrats had truly come to rule the roost and virtually everyone in power in China possessed an engineering degree.
This made good sense when gigantic infrastructure projects were the order of the day, when China was all about power plants, switching stations, bridges, rail lines, hydroelectric dams and telecommunications networks.
But as the country shifts its focus toward the financial sector and the information economy, an engineering degree alone isn't enough. Now that Jiang Zemin's "Three Represents" theory has been made canonical and the capitalists have officially been invited to the Party, could the MBA supplant the mere engineer as the man on top? There is one in the Oval Office in Washington; it is not hard to imagine them ensconced in Zhongnanhai in Beijing.
It hasn't happened yet, but there are signs of movement in that direction. "We're getting government people in our [Executive MBA] program – mostly at the chuzhang and juzhang level [section chiefs and director generals], as well as managers at SOEs, MNCs and private-sector companies," said Lai Weidong, director of the China-Europe International Business School's EMBA program in Shanghai.
Some programs – Arizona State University's W.P. Carey School's Shanghai EMBA, for example – are deliberately courting students from government ministries and regulatory agencies.
New breed of policy makers
It is likely that China's so-called "princelings" – the taizidang, or offspring of the Party elite – will be the first batch of political players with MBAs. They might have started off their schooling, like everyone else, in engineering, but as more and more of them are courted by major investment banks for their family connections, or go into business running large SOEs and private- sector companies of their own, the taizidang are changing tack.
"Most of the senior Party leaders are in their 60s and have children in their 30s, just the right age to be furthering their education through EMBA studies," said one career development consultant specializing in Chinese MBA programs. "From (Communist Party chief) Hu Jintao's daughter on down, many of them have or are now getting business degrees."
And while they work on their degrees, they are also doing the most useful thing that MBA students can do during their studies – networking with their fellow students, while others network with them.
"The connections you make here are unbelievable," said one overseas Chinese who commutes from San Francisco to attend EMBA courses one weekend a month at Tsinghua's School of Economics and Management. "It seems like half the class is some major official's son."
Given China's desperate need for qualified managers, it is no surprise that programs are proliferating: Dr. Jonathan Di Rollo, career planner with Career Development China Ltd and author of the China MBA Guide 2004 Executives' Edition, estimates that there are now at least 230 programs being delivered in China, with nearly 10,000 students earning diplomas – MBA, EMBA, and doctoral (DBA) qualifications. The programs run the gamut from part-time programs at lesser-known universities to large, branded MBA and EMBA programs offering degrees from American business schools like USC, Olin (Washington University), Fordham and Kellogg (Northwestern University).
With American degrees now available in China and post-9/11 visa requirements for study in the US more stringent than ever, Chinese students – even qualified applicants with high GMAT scores, work experience and strong English skills – are finding less reason to seek their business education in the States. For many, it is because they see their economic future in China.
Xu Fei, vice dean of the Jiaotong Antai MBA Program, speaks for many deans and directors of mainland programs when he says that domestic MBAs seeking jobs with major Chinese enterprises or the China offices of MNCs often have an edge on those who come back with an MBA from anything short of a top-25 school. "Besides, graduates of the best US schools tend to stay in the US to work, at least for their first few years," said Xu.
Talk to any Chinese MBA student or instructor and sooner or later you'll hear a fable about the haigui, or "sea turtles," and the tubie, or "land tortoises." The sea turtles, a pun on the Chinese word for "overseas returnee," got their degrees abroad and swam back in glamorous waves during the dotcom boom of the late 1990s; the land tortoises, meanwhile, stayed in China, worked, and got domestic MBAs.
Silly "sea turtles:" they left China, forgot how to do business here, lost their valuable guanxi networks, and as the Chinese press has gleefully reported, haven't landed the high-salaried jobs they expected when they came back, despite their foreign MBAs. They have now been saddled with a new moniker: haidai, literally "seaweed," which is short for haigui daiye, or "sea turtles awaiting employment."
Shao Junling, an MBA student in her second year at Guanghua School of Management (GSM) at Peking University, is typical of those who opted for pursuing a domestic MBA over its foreign counterpart. For her, Peking University – Beida – is a name every bit as magical as Harvard. "Going there has always been a dream to me," said the 30-year-old self-described land tortoise.
More to the point, she feared that spending years studying abroad would put her at a disadvantage in the Chinese business world once she came back. "With the speed at which China is changing, if I were to leave the country for two or three years, I'd be cutting myself loose of my network of relationships," she said.
Marketing marketing degrees: MBA recruiting jamboree
Hu Dayuan, president of the joint Peking University/Fordham BiMBA (Beijing International MBA) program, warns, however, against overvaluing a Chinese MBA, even one from a top school. "We need to admit one thing: that what China's MBA programs can offer in terms of instructors, environment and so forth is still a long way from what the top US schools, some a hundred years old, can offer. That's just a fact." He encourages anyone who can get into a top US program – and pay for it – to do so.
But China's schools are pushing hard to close the gap, and internationalization is the thrust of the leading programs, said Di Rollo. While he saluted Hu's candor, he noted that "there are some high-quality programs where students are exposed to an international faculty, case studies, guest speakers and classmates. More and more international MBA schools are flocking to China to deliver their own programs in the Mainland and in Hong Kong."
He cited CEIBS – the China-Europe International Business School headquartered in Shanghai – as well as Jiaotong's Antai (Aetna) School, which has international partners from New York to Norway. Many top Chinese schools, he adds, have made use of local entrepreneurs to teach and support their MBA programs – taking a page from Stanford's experience working with Silicon Valley enterprises.
But only up to a point: As a Stanford MBA and top portal executive in Beijing argued, it will take a decade or two before China's entrepreneurial environment has the critical mass to support local teaching programs at Stanford's level. The university, which recently inaugurated an overseas study program enabling its students to study at Beida, has a history of engaging entrepreneurs going back generations – with graduates going off to build up businesses and then returning to mingle with students as mentors and teachers. That tradition, which also spawned a rich and Stanford-friendly venture capital community, was 40 years in the making, he said.
In the event, overseas and China MBAs move in different directions, to hear Di Rollo tell it. "People with a top US B-school degree generally go into consulting or investment banking," he said. "For people on a different career path – working for a major MNC in China, for example – there's excellent international education available here."
Most of the major programs offer international (IMBA) courses of study taught exclusively in English; at Peking University's GSM, for example, some 120 of the current class of 400 have opted for the IMBA track. Perhaps surprisingly, Chinese programs have resisted a China-heavy agenda in the case studies they teach. "We use a range of case studies: standard Harvard case studies, and some that we've developed in-house, but we're teaching our students to be international managers in an age of globalization," said John Yang Zhuang, dean at BiMBA.
Specialization, said Di Rollo, is the watchword in Chinese MBA education going forward. While many established programs have long provided tracks with an emphasis in finance or marketing, new schools are training specialized managers for sectors such as health care, real estate, and technology, and even for more specific industries like aeronautics. Health care, Di Rollo said, is particularly important given the state of things in China.
"There's a great need to train doctors to be managers all over the world, and all the more so in China," he said. Some MNCs, which have traditionally covered the costs of sending execs to EMBA programs like the ones operated by Rutgers, Olin/Fudan and CEIBS, are now starting their own in-house business education programs: Motorola, for example, now operates its own courses and even offers a DBA, said Di Rollo.
New programs are popping up like mushrooms across China, but if the mainland's media are to be believed, there's a crisis in MBA education in China today. Despite sanguine official projections for 2003 (see chart), both applications and enrollment have fallen off precipitously, dropping by an average 20% between 2003 and 2004, with a comparable fall in applications expected for 2005. Even China's most prestigious programs, like Tsinghua, GSM, BiMBA, Jiaotong and Fudan in Shanghai, have seen numbers decline.
The reason, warn numerous media reports, is one easily understood by any aspiring business student: supply in the job market simply outstrips demand. An MBA boom three years ago has flooded the job market with graduates of local B-schools, and as they compete for the good jobs with a growing number of returnee MBAs they drive average wages steadily downward.
But there is more behind the declining numbers than a soft job market for newly minted MBAs, say the deans and directors of China's leading programs. "Bad news travels faster than good," said Qian Xiaojun, director of Tsinghua's MBA program. "And recent negative reporting on the MBA scene has discouraged many applicants."
More selective applicants
Prospective applicants are also getting a clearer idea of what qualifications and job experience leading schools are really looking for – and those who aren't confident they measure up are taking themselves out of the running, educators contend. And declining applications is not necessarily a bad thing: "Personally, I hope they fall even more," said BiMBA's Hu. "As long as there are enough students of the right caliber, then from a management perspective, we're better off with fewer applicants." Still, growing doubts about the overall value of an MBA – both on the part of employers and prospective students – are dampening the enthusiasm that peaked in 2001, when leading MBA programs in Beijing and Shanghai were inundated with applicants.
Tsinghua, which had 4,500 applicants that year, saw only half that number apply for the academic year beginning fall 2004 – falling behind Fudan, which received 2,300 applications.? [Henry] Mintzberg's book stimulated a lot of discussion about the actual worth of an MBA," said Qian, pulling a copy of the McGill business professor's controversial Managers Not MBAs from a stack on her desk. Though only published in China this year, the Canadian academic's pointed criticisms of traditional MBA education ? suggesting, for example, that MBAs offered to young people with little or no actual management experience are a waste of effort ? have been reverberating through leading business schools. "It's not just here in China: people around the world are questioning the value of MBA education."
Hu blamed a me-too mentality among Chinese for the blind rush to MBA education beginning in the late 1990s, and for much of the resulting criticism. "Many students were after the degree, and not the education. If I'd offered them the diploma in trade for the tuition today, they'd have said 'Deal!' They think it's the credential that's worth money." So Hu applauded the more circumspect, discriminating approach of recent years. "The high ratio of applicants to admissions we've had in years past – as high as 13 or 14 to 1 – that's the anomaly. The ratio isn't nearly that high in the leading American schools."
The MBA may have lost some of its popular luster in the last year or two, but the managerial ranks of China's enterprises large and small are filling inexorably with holders of the qualification, whether earned abroad or, as is increasingly the case, in one of China's homegrown programs. Managers who have work experience but no MBA are still signing on to spend nights and weekends boning up on accounting, finance and management theory at any of a number of part-time and EMBA schools. B-schools continue to attract many of China's best and brightest. China doesn't have parallel ladders in place, at least not yet: in the West, climbing one first (say, the business ladder) one can cross over relatively easily to a high rung onto another (say, politics). Except briefly during the Republican period – a few brief decades of abortive capitalism – there's been only one ladder to climb in China: the civil service. That's changed in the era of reform.
The princelings have a foot on each ladder; high birth has given them a high berth on the one, and they've easily parlayed that into fast ascent of the other. While they may eschew careers in government in favor of more lucrative I-banking for now, it is only a matter of time before, MBAs in hand, a few begin to clamber across, either of their own volition or in response to appeals from a leadership anxious to beef up its ranks – just as US administrations fill theirs trawling at Goldman Sachs, Alcoa and other corporates.
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