Much of Hong Kong’s business sector has lived in the shadow of mainland China, but education in the world’s eighth largest trading economy is on the cusp of globalization.
Strong ties to China, a large and thriving financial sector and free market credentials are powering the rise of Hong Kong’s business schools and universities.
The former British colony is attracting a swelling pool of globally mobile students.
The mainland contributes the lion’s share to Hong Kong’s economy and so do its students, but managers from as far afield as Spain, France and the US are knocking on the door of Hong Kong’s MBA programs.
“Hong Kong has long been a bridge connecting China and the rest of the world,” says Eric Chang, dean of the Faculty of Business and Economics at the University of Hong Kong.
According to data compiled by the Institute of International Education, a think-tank, China attracts 8% of the 4.3 million internationally mobile students, 3% lower than the world’s most popular destination, the US.
For a territory whose school education system is lauded as among the best in the world, it should come as no surprise that its management institutes are starting to catch up.
Data submitted by business schools and published in 2015’s MBA rankings show that about 70% of Hong Kong’s highest-ranking MBA programs are populated by international students.
“This is now my home,” says Alexis Bautista, a European MBA who set-up Kokonuzz, an entertainment content developer and licensing start-up, in Hong Kong. “Starting a company here is fast, cheap and easy,” he says. “The cherry on top of the cake is that we are next to the [mainland] Chinese market.”
China’s decade of fast growth, which saw it overtake the US at the world’s largest economy in 2014, has begun to slow but the strength of Hong Kong’s corporate sector is unabated.
A stable corporate governance structure ensures companies have confidence to operate in the territory. Its economy, which has topped the widely-respected Index of Economic Freedom for the past 20 years, is fuelled by the services sector.
Hong Kong acts as a gateway for China’s rapidly developing capital market. It remained unchallenged in Asia in terms of equities and initial public offerings in 2014.
Approximately 70 of the world’s top 100 banks have established a presence in Hong Kong, according to Professor Jitendra Singh, dean of HKUST Business School.
This provides distinct advantages for local educators, such as student internships with banks including HSBC and Standard Chartered Bank. “We are ideally placed to meet the recruitment, training and development needs of such a vibrant industry,” says Jitendra.
Government figures published in 2013 show that 6.1 per cent of the working population are employed in the financial services industry – more than 230,000 people.
The University of Hong Kong is able to ride the territory’s status as a financial services powerhouse, with corporate partners including Citibank and New World Development, a Chinese-listed company known for its real estate investments.
“Business schools and the business community are mutual partners,” says Eric. “Students at HKU are closer to the real market and are exposed to timely market information,” he says.
Closer bonds between Hong Kong's and the west's academia and capital markets are bringing down barriers to collaboration.
A trail of cash flowing from China to Europe has taken the same steps as the managers who are bridging companies in Hong Kong with businesses in the Eurozone.
Chinese foreign direct investment into Europe rose to $18 billion last year; double the level in 2013, according to Rhodium, a China-focused research group.
“Chinese companies are penetrating the international markets and at the same time, continue to dominate its domestic markets,” says Eric at HKU.
“We do see increased interest in hiring Chinese MBAs and international MBAs who speak the major Chinese languages,” says Vinika Rao, executive director of the EMI.
This is being boosted by the desire among western universities to establish campuses in Hong Kong and the mainland. Business schools in the EU and US are rushing to invest in China.
The University of Chicago’s Booth School of Business recently relocated its Asia Executive MBA program from Singapore to Hong Kong. Sydney’s UNSW Business School runs a flexible MBA program in Hong Kong.
Kellogg School of Management of the US teaches a joint EMBA with HKUST at its campus in the Chinese territory. The UK’s Henley Business School has had a presence in Hong Kong since 1985, and plans to launch its media-focused MBA there in 2016.
Eric at HKU says: “Globalisation and the increasingly close interrelations among different economies make it essential for business students to have international perspectives.”
But living expenses are high. Savills, the property agency, estimates that prime residential rents in Hong Kong average $2,446 per week.
Hong Kong is the world’s second most expensive city to live in, with $115,717 average annual costs for employees, behind only London, according to Savills’ research.
Yet this has not slowed the former British colony’s educational rise. Managers have sent results of GMAT, the international standard business school entry exam, to Hong Kong in increasing numbers.
According to data from GMAC, the body which administers the exams, between 2008 and 2012, 7,811 more tests were sent to business schools in the territory. In 2012, Hong Kong received 9519 more test scores than mainland China.
However, recent pro-democracy street protests have brought the region’s stability into question.
New business from the mainland during the protests in November fell at the fastest rate since the financial crisis, according to a survey by HSBC.
Reports have suggested the affair could put companies and students off coming to Hong Kong, but academics are seemingly unconcerned.
In a recent interview Kalok Chan, dean of the Chinese University of Hong Kong’s business school, said students will appreciate that Hong Kong enjoys freedom of expression and demonstration. “It is a good thing for them to be exposed to,” he added.