ceutical companies. A weak international market and intense price pressure has spurred a reconfiguration of product portfolios by companies such as Ranbaxy, 11'okchar and DRI, in favour of the finished dosage segment. Ranbaxy; for example, hopes to slash the contribution of bulks to its total product portfolio to less than 25 per cent over the next three years. This trend is likely to ease competition between the tsvo countries.
The opening of new export markets such as Europe and US for both India and China will help reduce the competitive pressure. Stringent quality control systems and increasing compliance with international good manufacturing practices are now helping pharmaceuticals majors from these two countries to break into the North American market. Indian companies such as Cipla, Ranbaxy and DRL have success-fully adopted good manufacturing practices and obtained product approvals from the US, while the top 10 per cent of Chinese pharmaceutical producers also meet these quality assurances.
However, like most foreign pharmaceutical joint ventures, the Indian companies in. China are suffering from the discriminatory price controls announced by China's State Planning Commission. in 1996.- The new pricing plan seeks to implement a marginal price control pro-gramme to cap mark-ups at each step in the multi-lave red distribution chain and thus scale down escalating medicinal costs. Unfortunately, it exempts most locally made drugs and traditional Chinese 'medicines, and consequently hurts imports and. foreign. joint ventures.
In fact, unpredictable policies on price cuts and healthcare directly hit RGCL's revenues in 19%-97. The Guangdong Price Bureau stashed prices for all RGCL products by 10 per cent in August 19%, giving a serious jolt to the company's financial results that year.
Yet .another threat to the Indian branded pharmaceutical producers in China is the implementation of a 1992 agreement to grant a .20-year patent protection. for new drugs along with seven years of 'administrative protection.' for certain products now under development in. China. Last year the Beijing yilinistry of Health. approved generic versions of Merck's Fosamaz (alendronate, a type of sodium salt used to treat post-menopause disorders) just days before the US company was scheduled to gain market approval for the product. This may be a harrier to Sino-Indian joint ventures even as China -moves towards membership of the World Trade Organisation.
Adecade ago there were hardly any international schools in mainland China. In the leading cities, waiting lists were long and elsewhere there were simply no international schools at all.
The influx of foreign investment into China over recent years has precipitated a massive increase in the number of expatriate families. A. greater number are choosing to bring their children with them, rather than send them to a boarding school. back home.
Embassies were important founding members of the first schools to be established in the 1980s. Later, as demand grew, expatriate parents and foreign companies were a driving force behind creating schools which met their requirements. I.n the case of the Western Academy in Beijing, founded in 1994 and now with. an enrolment of 430, multinational corporations such as Motorola, Shell and GE were the major sponsors. In other cases, the initiative has come from non-profit making organisations such as the Hong Kong Yew Chung Education Foundation..
The leading coastal cities are seldom now regarded as hardship postings and parents are happier about the prospect of their children growing up in. a Chinese city. "People are staying longer and there is a big boom in Western housing," says Mr Alex Horsley, Director of the International School of Beijing. "It is a more pleasant expatriate life than it used to be and remuneration is still very good."
Postings tend to be for a longer duration, another important reason why parents want their children with. them. "Expatriates are staying longer in Guangzhou," says Ms Nancy Stephan, Director of the American School in Guangzhou. "Just- four years ago they stayed for less than. two years on average ?now it three years plus. Proctor & Gamble employees are staying typically for four to five years. In terms of teaching, this greatly improves the continuity.,, Continuity is also helped by the tact that foreign teachers are also staying longer, despite their relatively low salaries.
In the past, families coming to Beijing tended to be younger since expatriates don't like to uproot when children areabout to take important examinations. "In recent years, this situation has changed as education standards have improved," says Mr Robert Thomas of Beijing Yen Chung International School, u hich has classes in .English and Chinese. "Nov parents have the opport-unity to explore many educational options within Beijing."
According to a Price Waterhouse survey conducted a few years ago, the majority of foreign employers in China are pre-pared to provide educational allowances for expatriate staff. The costs are significant, although perhaps no more than in other countries. Taking into account a capital payment charged by some, fees are in the region of USSI5,000 a year for primary schoolchildren and. a little more for secondary schoolchildren. Then there are additional costs such as extra-curricular activities and transportation. Worsening congestion means that getting children to and from school can be a laborious process. . hhe International School of Beijing currently operates a fleet of 40 buses and more may be needed when the school opens new premises near the air-port in the year 2000, when it will he able to cater for up to 2,000 students.
Enrolment is booming
Responding to growing demand, more international schools have opened. in the city of Beijing, home to thousands of diplomats and their families, there are now no less than. 14 schools catering for expatriates, of which half are English speaking. Shanghai and Guangzhou are also well catered for — for example, Guangzhou International School, a China-Hong Kong joint venture, will soon open while another in the Golden Lake development is also being built. However, there are also new facilities springing up in the secondary cities. Smaller schools are starting to appear in places like Xiariien, Nanjing, Kunming and Qingdao, making these cities more attractive as investment locations to foreign companies.
"Enrolment has boomed over the past tbA"o years in Beijing and China generally " comments the ISB's Horsley. "There has been a proliferation of international schools all over China."
There is now greater equilibrium
between supply- and demand for educating overseas children. International schools are no longer turning away children and parents can choose between schools and the different types of education -which they otter, such as bilingual or single language classes, an American or English curriculum.
However there are still shortages in certain areas. For example, the ISB remains the sole the English language school in Beijing teaching all the -vay up to grade 12 (university entry level.). The only such school in Shanghai is the American School, which is currently moving campus to. the Shanghai Links complex in. Pudong. Other schools are expanding — for instance the Beijing International School Singapore currently teaches up to grade 10 and it has said it will go up to grade 12 in the next. couple of years — but Horsley' says there is insufficient supply and a general absence of vocational facilities required by older students; such as woodworking classes.
Local Chinese schools are also starting international programmes with the backing of their municipal departments of education. The courses they offer are price competitive and. the bilingual teaching they provide is certainly, in demand. However, as local schools they are required to follow the Chinese curriculum and all the political baggage that goes with it, and this is proving a strong deter-rent to foreign families. Dr Brian Wilks, head of the Western Academy, believes these schools are targeted mainly toward` the very long-term expatriate and/or for those with lower-than-average incomes.
The Korean factor
Just as many new schools are coming on stream, it seems that the long period of growth may now be at an end. The financial crisis in. east Asia, especially in South. Korea, is having a big impact on international schools in China. The 'Aestern Academy claims not to have been impacted significantly. More common is the experience of the International School of Beijing, where Korean student numbers have fallen from 130 to just 90 in the past three months, although total enrolment has remained about the same.
"Generally the [Korean] companies have stopped subsidising their school fees," say's Ms Barbara Nlarkland,a co-principal of Yew Chung Shanghai International School whic}1 has recently lost 30 Korean children. "Parents have also taken a pay- cut of about 30 per cent. Some have even gone back to Korea while others have put their children into local schools."
School administrators are placed in a difficult position. — not wanting to disrupt the education of Korean children but, as non-profit making organisations, aware that special favours are unlikely to be viewed favourably by all parents. "We haven't yet figured out a way [in is hich we can help them. financially]," says Stephan. "It is difficult for us to make an exception. However, we have been looking at spreading out the payments rather demanding that Korean parents pay up front."
A growing trend for returning main-land Chinese parents to educate their children at international schools might -mitigate against the impact of the Asian crisis but numbers are still few and their presence may pose a problem to school dministrators. For example under the existing rules of Yew Chung Shanghai Inter-national School, at least one parent must be a foreign passport holder.
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