Why China’s Hobbled Education System Isn’t Stopping SOEs

In the Hutong
Marvelling at the Chill
1025 hrs.

In an excellent, wide-ranging article for The New York Times Magazine (and one that will inspire  a few posts on this blog,)  David Leonhardt  zeros in on education as one of the obstacles China faces in building a consumer society.

When I met with Guo Shuqing, a party official and the chairman of China Construction Bank, in his office high above Beijing’s financial district, he mentioned that a recent ranking of the world’s top 100 universities included 53 from the United States but just three from mainland China. Even those numbers, Guo said, probably overstated the strengths of China’s universities: “In terms of innovation — really original, creative ideas — they’re very weak,” he told me. By contrast, the American education system helped make possible Google and other companies.

This has become something of a meme among those who dismiss China as a “real” competitor to the U.S. Because Chinese high schools and universities still emphasize memorization over creation and theory over practice, China will be unable to make the transition to a creative, innovative society.

Who Needs Reform?

Yet while education issue is vitally important to China’s future development, we need to be careful about using the state of education and pedagogy in China as a barometer for competitiveness. China’s companies, even its lumbering bureaucratic state-owned enterprises, are finding ways to work around the limitations of the PRC’s politicized, doctrinaire, rote-driven education system.

  • Executive Education – Ranging from full-time paid overseas study, to part-time MBAs, to open admission continuing education and even government-sponsored programs for accounting and administration, Chinese firms are starting to make use of educational options for middle- and senior management that were originally intended for the executive rosters of multinationals.
  • Training –   An unprecedented choice of commercially-available programs, ranging from basic English instruction to secretarial skills to even Dale Carnegie courses, are available to Chinese companies. Even more firms are choosing to develop their own in-house training programs as a means of attracting, developing, and retaining talented staff, without having to spend a fortune on outside providers.  (In some cases, this means paying for program the first time, and using it over and over in-house without paying the provider.)
  • Hiring MNC Veterans – As the pay gap between MNCs and SOEs narrows, going to work for a local company is a viable and sometimes desirable next step for an executive with several years of experience in a multinational. It’s also a relatively easy way for a company to pick up international best practices. That is, if they actually adopt the ideas thinking and techniques that the new employee brings.
  • Hiring Sea Turtles – While their older brothers and sisters may have chosen to go to an MNC first, today’s generation of graduates, seeing their prospects better at a local enterprise, are choosing careers with SOEs fresh out of school.
  • Hiring the Foreigner – There persists the perception among executives lacking extensive international experience that foreigners are overpriced, difficult to work with, and lacking of a fundamental understanding of Chinese business culture. And in many cases, that’s true. Nonetheless, it is an option more companies are trying.

Long-term, the most important of these sources of smarts will be the foreign educated Chinese, and not just those popping over to the US for professional finishing at American graduate schools. Put off by the hyper–competitive university examination and entrance system in China, parents with the financial means are now sending their little emperors abroad for their undergraduate educations.

Start Them Young

And a small but growing number of parents aren’t waiting for university: they are finding ways to enroll their children in international schools in China, or are sending them abroad as middle- or high-schoolers.  The logic is compelling. Despite the loss of some of the virtues of a Chinese education, these young sea turtles will have been formed in a more open educational environment, ostensibly enabling them to think more creatively, be more adaptive, and possibly even more innovative than peers reared in China’s neo-Confucian secondary schools.

The numbers of students in such programs is not so large as to relieve China of its eventual need to reform education. But as long as that option remains politically unviable, it will grow in unofficial acceptance. If and when the Ministry of Education starts allowing the experimental enrollments of Chinese nationals in international schools, the partial outsourcing of China’s elite education will have become official policy.

So while the issue of mis- or mal-educated youth (and a lack of executive diversity) is a real macro problem in China, don’t count on it to slow or stall your Chinese competition for very long. Driven by the management challenges and global ambitions of organizations like Guo Shuqing’s China Construction Bank, China’s wiser companies are finding ways around the education problem.

Michael A. Robson

“Yet while education issue is vitally important to China’s future development, we need to be careful about using the state of education and pedagogy in China as a barometer for competitiveness”

Lest we forget: you pay peanuts, and you get monkeys! 吧-doom-青!