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Many of China’s elite business schools could be hit with bills running into millions of renminbi following the insistence by the Chinese government that high-ranking government officials and managers from state-owned enterprises withdraw from the schools’ high-priced Executive MBA programmes (EMBAs), as part of the government’s anti-corruption drive.

The business schools involved have now learnt that they are expected to pay back the fees of those officials and executives that have been forced to quit their EMBA.

Most badly hit are likely to be the most prestigious schools with the most expensive fees. At the Guanghua school at Peking University total fees for the two-year EMBA – an MBA for working managers – are Rmb620,000. At neighbouring Tsinghua School of Economics and Management total EMBA fees are Rmb560,000.

Between 10 and 20 per cent of Guanghua’s 800 EMBA students have already withdrawn from the programme or will have to do so, while at Tsinghua’s School of Economics and Management more than 30 per cent of the class are affected. In many cases, government officials at top business schools have already received full or partial scholarships from the universities to participate in the programme, but the sudden move will still leave deep dents in business school funds.

It was in August that the Chinese government announced the crackdown, barring “leading cadres” within the Communist party, the government and state-owned enterprises from signing up for costly business training. The concern was that executives from commercial ventures were signing up to the programmes in order to network with the officials and so store up favours for the future.

Those officials already enrolled on EMBA programmes were told they must quit immediately and earlier this month government officials swooped down on many of the top universities, such as Tsinghua and Peking University in Beijing and Fudan University in Shanghai, to go through student enrolment documents with a fine tooth comb to ensure adherence to the policy.

Though China’s business schools were originally horrified by the government ruling, some now acknowledge that networking had been given too much prominence on some programmes. At Guanghua in Beijing, dean Cai Hongbin says the school’s alliance to teach an EMBA with the Kellogg school of the US has highlighted the problem. “[In] The Chinese EMBA programme the education element is not strong enough. This is true of all [Chinese] EMBA programmes.

“We have been reforming it [the Guanghua EMBA] to de-emphasise the social networking,” adds Prof Cai. “The Kellogg programme can help us in this effort.”

Although deans now accept the government decision, there is still the question of what happens next for managers from state-owned enterprises. Zhou Lin, dean of Antai College of Economics and Management at Shanghai Jiao Tong University, recently told the FT Chinese annual forum in Beijing that these managers still needed management training as public/private partnerships developed in China.

While all government officials have been forced to withdraw from EMBAs, middle managers at state-owned enterprises have been allowed to finish their programmes provided they pay their fees themselves. This is proving a feasible option at less expensive business schools, such as Tongji University in Shanghai, where EMBA fees are Rmb328,000. More than 80 per cent of the executives from state-owned enterprises on the programme pay their own fees.

Copyright The Financial Times Limited 2017. All rights reserved.
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