China Business Schools Hit Their Stride
A decade ago, if an ambitious Chinese professional wanted an MBA, practically the only option would have been to go abroad. But with startling speed, Chinese MBA programs have upped their game, keeping some of the country's top talent at home while also drawing foreign high-flyers who have their sights set on China's economy. Their international recognition has not yet caught up with their caliber, but it shouldn't be surprising to see such names as China Europe International Business School (CEIBS) and Tsinghua University ranked right behind ones like Kellogg and Sloan within the next 10 years.
In 1991, the Chinese government formally authorized MBA programs at nine schools. As of the end of next year, however, that number will have exploded to 236, a 25 percent increase over 2010. More than 20,000 MBAs graduate every year, but only a few programs offer serious international MBAs, with courses taught in English often by professors from such schools as the Massachusetts Institute of Technology Sloan School of Management (Sloan Full-Time MBA Profile), Harvard Business School (Harvard Full-Time MBA Profile), and Stanford Graduate School of Business (Stanford Full-Time MBA Profile). These programs alone won't come close to satisfying demand. Over the next 10 years, China will need an additional 75,000 international MBAs who speak at least one foreign language, according to education research firm DHD Consulting.
But where those MBAs are going to work could be surprising, if trends hold. Even before the financial crisis, when foreign companies suffered layoffs and hiring freezes, Chinese students' preferences had been shifting toward domestic private businesses and well-performing state-run companies, such as Cofco and ICBC, that have major business overseas. Only three foreign companies—Google (GOOG), Microsoft (MSFT), and Procter & Gamble (PG)—were among the 50 most-preferred companies to work for in a survey, released in August, of more than 200,000 university students, according to ChinaHR.com.
The Appeal of Job Stability
While international MBAs are different—they tend to go to finance and consulting, fields dominated by foreign companies—the shift to Chinese employers is picking up there, too.
"Only students who have already had experience at multinational companies would choose to work for them after graduation," says Alex Tian, an international MBA student at Tsinghua who has worked for Mercedes Benz (DAI) and Rolls Royce (RR). "Even those of us who've been at foreign firms might not go back because of culture differences and job stability."
As Chinese continue to stay for international MBAs, more foreign students are being snatched away from top schools in the West, a sign that the value of an MBA degree in China is rising.
With work experience at KPMG and an undergraduate degree from Brigham Young University, Clarke Schaumann would have been a shoe-in for a top U.S. business school. "But I just felt that my career ended up in China," says the CPA, who is now studying at CEIBS in Shanghai. "I didn't even apply to other schools."
Schaumann isn't alone. Every Chinese business school contacted for this report has reported a massive influx in foreign applicants, with Guanghua, Tsinghua, and CEIBS leading the pack with student bodies that are around 40 percent international.
Moving China Knowledge Elsewhere
While nearly all the foreign students come to Chinese business schools for the local knowledge, connections, and interest, a new trend is emerging that bodes well for the international status of the mainland's MBA programs.
We're seeing a small percentage of our students getting hired by multinational firms here in China and then getting posted overseas," says Lydia Price, associate dean at CEIBS. "The firms want people with China knowledge in other parts of the globe—sometimes even in their headquarters. This just started happening in the past year, so there aren't many examples. But we see this as the tip of the iceberg."
And while Chinese graduates are being sent abroad by multinationals, more foreign MBAs are getting pulled in by Chinese companies. "We now have some state-owned companies come to us and ask, 'How can we get foreign graduates to work for us?'" Price says. While only a few Chinese state-owned enterprises have been successful at putting together packages attractive enough for top international MBA graduates, Price predicts this will evolve into a more widespread trend as more state-owned companies try to break into foreign markets.
Links With Western Schools
If Chinese schools are challenging traditional B-school heavyweights in the U.S. and Europe, they couldn't have done it alone. CEIBS's foreign roots are apparent in its name, but it isn't an anomaly—every other top school has close ties to foreign universities, most notably to MIT's Sloan School of Management.
Sloan has been working with Shanghai Jiaotong, Tsinghua, and Fudan since the mid-1990s, while Peking University's BiMBA (BiMBA Full-Time MBA Profile) was founded through New York City's Fordham University (Fordham Full-Time MBA Profile) and its degree-granting institution is now Vlerick Leuven Gent Management, Belgium's top MBA program.
These arrangements have left a deep Western imprint on the schools, but they aren't mere copies of their foreign partner institutions.
"One of the main selling points is the China knowledge you can get here," says Mateo Radnic, a Chilean MBA student at Shanghai Jiaotong's Antai College of Economics and Management. A majority of the full-time faculty at all the profiled schools remains Chinese, and every school has heavy resources devoted to producing local case studies, a key component of business education.
Sharing With Regions That Lag
The top Chinese schools are also following their foreign partners' examples. Tsinghua and Fudan are helping smaller schools in less-developed interior provinces through professor and curriculum exchanges based on their cooperative experiences with Sloan.
"China should be viewed as at least two countries," says Yin Zhiwen from Fudan University, which has partnered with Southwest China's Yunnan University. "Since we are in the wealthier region, we have a duty to help out the other areas that aren't as well off."
Are they concerned that the leading business schools might be helping to cultivate their very own competitors? Not so much. "Like everything in China, this market is so large that it can't be served by just a handful of schools," Yin says. "So we like to view other MBA programs as our friends."
The top Chinese schools are making the same deal Sloan signed with them 15 years ago. When high-speed growth shifts from the coast to the western and central regions, as it already is, it will be good for such places as Tsinghua and Fudan to have some friends.