BEIJING, CHINA - JULY 18: (CHINA OUT) Students graduate during a ceremony held for 3,768 master and 898 doctorates being given out at the Tsinghua University on July 18, 2007 in Beijing, China. China faces a major challenge in meeting its goal of creating nine million jobs this year, according to Tian Chengping, Minister of Labour and Social Security. Approximately five million college graduates, the largest number in history, will enter the job market this year, in addition to surplus rural labourers swarming into cities for work. (Photo by China Photos/Getty Images)
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Chinese officials are rushing to pull out of executive MBAs after Xi Jinping’s government banned them from accepting scholarships as part of a widening anti-corruption campaign.

The government has barred “leading cadres” within the Communist party, the government and state-owned enterprises from signing up for costly business training unless they have official approval and pay fees themselves. Those already on such programmes must quit immediately.

The fight against graft has become Mr Xi’s signature policy since coming to power in late 2012. The latest move arises from concerns that executive management training such as part-time MBAs are hotbeds for networking, as they are globally. In China the fear is that these guanxi, or connections, are prone to corruption, bribery and rent-seeking.

The decree will be a blow to China’s booming business schools, where the cost of such part-time MBAs can be more than Rmb600,000 ($100,000). In some schools, government officials were offered virtually free enrolment to attract wealthy entrepreneurs seeking to build networks.

About 5-8 per cent of China’s EMBA students are government officials, most of whom are on scholarships funded by the business schools. Among those who have taken EMBA degrees in the past are well-regarded technocrats such as Huang Qifan, mayor of Chongqing, China’s largest city, where Bo Xilai, the disgraced politician was party chief; and Du Jiahao, governor of Hunan Province.

Liu Ji, honorary president of leading business school Ceibs and a former senior official, warned that in some cases the policy could force out up to a third of EMBA students, and would not serve China’s economic interests and market liberalisation.

“You may find individual cases of corruption within the EMBA community but we mustn’t let a rat’s dropping spoil a whole cauldron of soup,” he said. “In the past months, dozens of ministerial ranking officials have been dismissed. Few of them studied EMBAs but almost all attended the Central Party School [the elite training centre for senior officials]. Are we supposed to close down the Party School?”

Three leading business schools contacted by the Financial Times said that many EMBA students from the party and government bodies had in recent weeks been quitting their studies or turning down scholarships to protect themselves from the intensifying anti-corruption campaign.

The type of executive training to be banned was not specified in the policy document announcing the change last month. However, it has been widely interpreted, both by business schools and the students as primarily targeting EMBA-style programmes.

The head of one business school, who did not want to be named, expressed dismay at the policy. He said all the officials who had enrolled as EMBA students since last year had quit and that many executives from state companies, who would normally account for 20 per cent of the students, were likely to follow suit.

“EMBA programmes allow government officials and private businessmen unique access to get to know each other close-range as classmates,” he said. “Officials could learn how private entrepreneurs think. And private entrepreneurs, in return, could get to know from officials how the economy and the country is run.”

While full-time MBAs have always been the flagships of US business schools, in China these part-time EMBAs, which target senior executives and officials, have become the degree of choice. However, in recent years some Chinese EMBA programmes have been criticised for their high price tags and low quality.

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