I recently returned from a trip to China – my sixth trip in the last four years. The trip was part of the MBA for Executives Program at UVA’s Darden School of Business – a week of studying Chinese business and economics under professors of the Cheung Kong Graduate School of Business, the first private business school in China and now one of the leading programs in Asia.
We all hear from the media about the growth of the Chinese economy and their rising global influence. Learning details from Chinese graduate professors made it hit home all the more. The economic growth in China over the past 30 years is something unprecedented (China’s GDP quadrupled from 1978 to 2005). And it’s not finished – some predict the GDP growth to continue its present pace of 10% per year for the next decade.
Individual wealth in China is growing at amazing rates. The Chinese are the world’s greatest savers with a Gross National Saving rate of 56%, yet they have the world’s largest appetite for luxury goods.
Despite the global recession over the past couple years, BMW, Louis Vuitton and other global luxury brands have thrived because of successes in the Chinese market. Status, prestige, and group approval are all significant drivers in the decision making process of Chinese consumers. Boarding schools have been flooded by Chinese applicants since 2006. The flood may triple or quadruple in size in the coming years:
- After US, China is now the second largest economy in terms of purchasing power parity (PPP).
- China has the world’s second largest number of households with assets in excess of $1 million.
- The average age of the 400 richest people in China is 46 (compared to 64 for the world’s 400 richest). Of the 400 richest Chinese, 99% are “self-made” (60% for the world’s 400 richest).
- China features increasing income inequality but also a rapidly growing middle class (23% of population in 2010). The middle class is upwardly mobile; families are pooling resources to send children to US independent schools and universities.
- China has close ties to the US – among other things, they are the #1 foreign investor in US debt.
While it is true the mentality of “giving back” (as it relates to donating money) is not the same as in Western countries, don’t be afraid to fund-raise in China. The family is at the center of Chinese society. Many Chinese companies are family run. Chinese give back to extended family and communities.
Giving their money to an American school, still a foreign concept, will take convincing. Get to know the families of Chinese students at your school. Determine aspects of their experience that could be improved in the short term (before they graduate). Translate this into fundraising options through which Chinese families can accomplish two things simultaneously: 1) they “give back” to an institution that is helping their family and 2) they are helping their child to have an even better educational experience in the years ahead. Some examples:
- An endowed faculty chair that would add an elective of interest to their child.
- New software or equipment that would enhance classroom or extracurricular offerings.
- Named scholarship fund specifically allocated for students from their community in China.
Establishing a culture of giving back will take time. Results will not come right away. Once momentum is built, however, look for a lead family from within each grade (most prominent or most affluent). Work especially hard to co-opt the head of this household to participate. Establish annual ceremonial get-togethers at which you accept a gift from the leading family. Other families will likely follow this lead.
Recruiting/marketing in China, as for other countries, requires a tailored strategy. Some particulars of this unique market:
- Guanxi – a Chinese term that refers to a network of contacts, connections, relationships; a sense of mutual indebtedness based on trust that is cultivated and strengthened over time. It is of extreme importance to take time to build strong relationships with key people in China. This requires regular travel – at least once per year. It also requires regular correspondence. If you’re comfortable doing so, exchange personal information in meetings – the Chinese don’t have the same boundaries between work and home as Americans. Gift giving is considered a part of maintaining healthy relationships. You are not necessarily required to give or receive gifts, but understand the spirit in which gifts are exchanged. If you give a gift, be mindful of what you present – they should be of similar value and meaning as those you receive.
- Consider travel outside of Beijing and Shanghai – Guangzhou, Shenzhen, Chengdu and Dalian are other viable markets to explore.
- Status/prestige – this is a huge selling point for US schools. Image and reputation are vulnerable – protect yours by working with trusted referral sources and schools. To the extent possible, conduct face-to-face interviews with applicants (when not possible, try Skype interviews). Encourage referrals from current parents – part of Guanxi.
- Total numbers – Chinese are happy to send their children to a school with other Chinese, but just not too many! Manage your enrollment with care and purpose.
- Other selling points: college list, SAT scores, advanced course offerings, environmental sustainability programs, entrepreneurial studies, outcomes and alumni network.
- Website – if you design a Mandarin webpage, consider Chinese preferences. They like a “busy” look to the page (compare newegg.com to their Chinese site – newegg.com.cn).
Treat China as a completely new development within independent schools. International student totals are on the rise and China is largely responsible for the increase. But it’s not just another source of students. Schools are in the unique position to build important bridges between Chinese and American cultures, strengthening ties between two countries that will need to partner closely in a future likely to feature more widely shared global leadership. Some great things that schools are already doing:
- Expanded role of International Student Programs with senior level administrator at the lead. Programs aimed at drawing international students more closely into all aspects of campus life; encouraging and fostering stronger relationships between American and international students.
- Annual travel to China not only by admissions staff, but also development and Headmaster.
- School trips to China with portions hosted by current Chinese students and families.
- Partnerships with Chinese schools – “sister/brother school” arrangements featuring student and/or teacher exchange programs of varying lengths of time; joint diploma programs.
- Mandarin language programs; translation of school literature and WebPages into Mandarin.
- Promoting awareness of Chinese culture, history and current events.
Some Americans perceive China as a threat – perhaps there’s confusion regarding China’s priorities in global matters. I see a country pragmatically open to international cooperation. Schools can take a lead in promoting this cooperation.