Economics & Finance
• 4 minute read

China’s EMBA Paradox

Xi Jinping, General Secretary of the Communist Party of China, has ushered in a new era of self-discipline and thriftiness with his anti-corruption campaign

By Vincent Li, CEO of Shanghai International Airport Services Company Limited; EMBA graduate from the CUHK Business School

Since Xi Jinping has taken the top leadership position(s) of China, he has been ruling the country with unflinching determination for purging the sovereign Party’s rotten ills – and, no doubt, his political foes. Whatever the Chairman’s – or Secretary’s – true intent is, and whether this is supposed to be a fundamental part of his admirable China’s dream, a new culture of thriftiness and self-discipline has been ushered in.

Party members initially took it as more for show than for real, thinking that the draconian “eight regulations and six bans” would eventually die down once the residual threat of political opposition was well cleansed as a result of the Politburo’s unrelenting anti-corruption drive – and the cheerful time for partying will be back. But for more than two years since Secretary Xi has taken over the Party’s helm, there is no sign that his iron will for building a new world order of cleanliness and integrity is losing steam. Quite to the contrary, it is only gaining strength as time passes.

Despite the serious decline in all businesses of selling extravagance – not least European-branded luxury goods, presidential suites, wines and liquors of superlative vintage, cuisines of supreme delicacy and reckless gambling – the new culture of frugality is doing most people a lot of good. I, for one, feel very thankful for it.

In managing a Shanghai-based joint-venture company with a state-owned enterprise (SOE) as a major shareholder, I was initially concerned about my ability in reining in the company’s entertainment and recreational budgets, particularly those for the Party’s functions. Since Xi’s anti-profligacy regulations came into effect, fortunately, the assiduous self-discipline in observing and controlling corporate spending has been blissfully too good to be true.

In the old days, dodgy procurement deals were commonplace. For example, price tags for heavy equipment were artificially inflated to cover for overseas “inspection trips”, which were legitimately arranged as staff benefits in SOEs and the suppliers were only too happy to accommodate. Through the refreshing sea of change, however, gone now are the days of extravagant entertainment, questionable corporate travel and proffering expensive festival gifts at corporate expense.

But, paradoxically, there are also over-corrective measures observable. Contentiously, executive management training has become one area of focus for the fight against graft. Chinese officials have been quick to pull out of EMBA programmes once Xi’s government banned them from accepting scholarships as part of a widening anti-corruption campaign since last year. The mainland government has barred “leading Party cadres” from enrolling in expensive business training courses unless they have received official approval and pay for the programmes themselves.

The logic is clear: executive management programmes are considered hotbeds for networking, which are prone to rent-seeking, cronyism and all other kinds of corruptive behaviour. In particular, EMBA programmes allow government officials and private businessmen unfettered access within a classroom environment to get to know each other in close proximity. Some business schools even offered free enrollments for government officials as a way to attract wealthy entrepreneurs hoping to develop useful connections.

The decree no doubt has been a blow to those booming business schools charging handsome fees for EMBA programmes in China. It also paradoxically questions the common value proposition of global EMBAs – the power of their alumni networks. Ironically, it is also taking China’s ancient culture of valuing guanxi on its head.

While the noble cause of fighting graft is welcoming – as without a doubt there are many areas of deep-rooted kleptocracy in China – it is sad to see business schools suddenly and seemingly assuming a similar status as casinos. But the merits of management training and constructive networking should not be so readily denied. As long as the dubious scholarships are rooted out and the business schools are strict in disciplining participants on non-attendance and poor academic performance, upholding the integrity and quality of an EMBA programme is still a readily achievable task, even in China.

 

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