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China's Anti-Corruption Campaign Forces MBA Students To Drop Out

The Chinese government has forced hundreds of executive MBA students to drop out of their programs, dealing a blow to China's highest-ranking business schools and their western partners.

Thu Jan 15 2015

Chinese business schools’ ambitions to become elite MBA providers have been dealt a blow, as the government has insisted that high-ranking government officials and managers from state-owned companies withdraw from executive MBA programs.

The effects of the shakeup, first revealed in September, have become clear, with between 10% and 30% of EMBA students at Chinese business schools pulling out.

Worse still, some of those business schools have been told they are expected to pay back the fees of those officials and executives that have exited their EMBA courses, one of the most expensive business school degrees, according to the Financial Times.

The government intervention is part of a wider anti-corruption campaign by the ruling Communist party.

It is understood the government was concerned that executives were signing up to EMBA programs to network with government officials.

About 5% to 8% of China’s EMBA students are government officials, most of whom received scholarships, funded by their business schools.

China has been establishing itself as an international business education hub; its business schools are included in global MBA rankings, and many European and US institutions have sought to expand into the country.

But the drop outs will put strain on elite Chinese schools. Potential bills for paying back tuition fees could run into the millions.

Between 10% and 20% of the 800 EMBA students at the Guanghua School of Management at Peking University have already withdrawn from the program or will have to do so, according to reports. Total fees for the two-year EMBA at Guanghua are Rmb620,000 (about $100,000).

About 15% of the students enrolled at Fudan University's School of Management in September have dropped out, Lu Xiongwen, dean of the business school, was quoted as saying this week.

The Cheung Kong Graduate School of Business in Beijing provides scholarships covering up to 90% of tuition to senior officials, Xiang Bing, dean of the business school, told media. Its EMBA fees in 2014 cost Rmb688,000 (about $111,000).

A spokesperson for CKGSB told BusinessBecause: “China’s recent anti-corruption campaign on the country’s business schools has not and will not significantly affect CKGSB.”

But the person said that the business school is “awaiting the final numbers” on the number of students that have withdrawn from its EMBA program since China’s anti-corruption campaign began.

The person confirmed that CKGSB funds EMBA students from the state sector with scholarships.

They added that the EMBA program remains “open to all qualified candidates—assuming they have received approval from their institutions”.

EMBA programs are typically the largest sources of business schools’ revenue. Cohorts are large. One leading Chinese school had 800 EMBA students enrolled in 2014.

But the sudden drop in student enrolment numbers will leave a dent in business school budgets.

It is also bad news for the many European and US institutions that have partnered with Chinese business schools to deliver executive programs.

Guanghua recently signed an agreement with the Kellogg School of Management, based in Illinois, to run an executive MBA program in Beijing.

Audencia Nantes of France recently partnered with Tsinghua University’s School of Continuing Education to launch an executive DBA program in responsible management, among other courses.

Other top western schools, including Duke’s Fuqua School of Business, Cornell's Johnson School, MIT Sloan School of Management, BI Norwegian, ESADE Business School and London Business School, have Chinese partnerships.

The Guanghua School of Management did not reply to requests for comment. Fudan University’s School of Management could not be reached for comment.