Studying China From The Inside

Foreign MBA students are flocking to China, drawn by a booming economy and low costs

When Luis Avila Fernandez decided to get his MBA last year, he looked to the East. The 32-year-old Chilean liked what he saw. China's booming economy, in desperate need of experienced managers, seemed like an opportunity that no good businessman could pass up. But to Fernandez, whose experience with China had been limited, the country's complicated language and distinctive culture seemed daunting.

Hong Kong University's English-language MBA program presented the perfect compromise. Fernandez enrolled in September. "No book or professor in the West could explain all of China's moving parts," Fernandez says. "You must see, taste, hear, touch, smell, to understand this incredible place."


  The prospect of big markets, low costs, and an economy in overdrive has a strong appeal for foreign MBA students in China, who now number more than 11,000, including those on semester-abroad programs. In Shanghai alone, the number of foreign applicants to MBA programs has nearly quadrupled in the last five years, to more than 2,300, the city's Commission on Education estimates.

The U.S. has always been the prime destination for those looking to study abroad. But stricter visa requirements in the wake of the Sept. 11, 2001 terrorist attacks and higher-quality alternatives abroad are eroding this dominance, taking along with it some of the $12 billion foreign students spend in the States each year. "Increasingly, students find they don't have to come all the way to the U.S. for graduate education," says Peggy Blumenthal, executive vice-president at the Institute for International Education, an American nonprofit that monitors global student movement. "They can get exactly what they want -- often for less money -- closer to home."

Blumenthal's logic certainly holds true for Asians. China's neighbors send 70% of the foreigners studying in China. The other 30%, however, come mainly from the West, with the U.S. accounting for more students than any other country.


  For most, it isn't an easy task -- from the 14-hour flight to the mainland, to setting up house in a foreign land, where language, culture, and history all serve as formidable barriers to entry. So why choose China? Its dynamism, students say -- not to mention the more than 10% annual economic growth that goes along with it.

That's enough motivation for American Susan Chao, a licensing manager for Elle magazine. "I want to work in China long-term, so I needed to get my foot in the door," explains Chao, who lives in Taiwan. She is currently enrolled in the China Europe International Business School's (CEIBS) Executive MBA program, designed for midcareer managers. "But that means flying the two-hour plane ride between Shanghai and Taiwan for every class," says Chao.

Chao is not alone. The University of Southern California's Marshall School of Business has 16 students who commute from outside China -- some coming from as far as California -- in its current Shanghai Executive MBA class. Next year's students will include even more, according to program director John Van Fleet. The influx of foreigners makes it necessary for Van Fleet to make some unusual adjustments -- like catered lunches from Indian, Thai, and Western restaurants that USC students enjoy -- but he gets few complaints about anything else. "China is the most exciting place to be in business right now," Van Fleet says. "Where can you learn any more about it than in a classroom in Shanghai?"


  Outside that classroom, Wilson Lim says. A native of Singapore, Lim earned his MBA from Shanghai's Jiaotong University last year. Lim remembers little of the theory he learned at Jiaotong, he admits, but classmates, professors, and fellow alumni taught him the most important Chinese business lesson. "Getting things done in China is still all about who you know," Lim says, "so relationships are invaluable."

Chinese business schools are also making an effort to lure foreigners. The Cheung Kong School of Business in Shanghai offers 10 full scholarships to international students. CEIBS, which dictates that 20% of each of its MBA classes come from outside of China, even lowers certain admissions standards, such as the Graduate Management Admissions Test, to attract these students. "Our foreign students can't compete with the Chinese fanaticism over the GMAT," says Rolf Cremer, dean of CEIBS.

Foreigners with their eye on the China market may be lacking on test scores, but they contribute diversity, previous managerial experience, and maturity, Cremer adds. Just their choice of China over the U.S. or Europe shows, Cremer says, that "they're willing to look outside the box." In other words, just the sort of valuable assets China needs to create a world-class MBA program.