The Big Picture: China, Shanghai & CEIBS

“China is still the next big thing.” — Morgan Stanley

“Without question, China will become the first (market) because our business is about people. More consumers in China will mean more business. It’s growing the fastest. It will happen. It’s not important when it will happen. What’s important is that it is growing and strong.” — Muhtar Kent, CEO, Coca-Cola Company

“If you’ve been in China a week, you could write a book; a month, you might feel you can write an article; a year, you can’t write anything at all.” — Unknown

You may not need to be told that China is on the rise. But to understand the scope of its ascendancy, you must see it for yourself. 

Here’s what you can learn with a little research, wherever you are: Private equity and venture capital are up; real estate and tech are up; the stock market is way up, with a record number of IPOs this year. “The spirit of entrepreneurship,” meanwhile, in the words of Bala Ramasamy, a professor at Shanghai’s China Europe International Business School, “is burning,” with the number of self-employed individuals doubling every four years. In many ways, says Elton Huang, lead partner for PwC Shanghai, China is “the new world” — and in one key way it is outpacing the rest of the world: money. With the globe’s largest population (an estimated 1.39 billion), China has officially had the world’s largest economy since 2014, according to the International Monetary Fund, eclipsing the United States with a purchasing power that by this year had grown to more than $25 trillion. On the vitally important ranking of countries where business is “easy” to do, China is among the world’s leaders.

Offsetting this are many concerns: an aging population and a growing social welfare obligation, for starters, along with a host of issues, especially environmental degradation, that arise when growth is as resource-intensive as China’s has been. A paramount political question is what will be done about provincial wealth disparity: Wealthy provinces like Beijing and Shanghai subsidize poorer ones like Yunnan and Gansu, leading to unequal distribution of tax revenue that engenders long-term resentment and division. An equally pressing economic question must be: What can China do about its 500 million living in poverty? And another: Will the heavy hand of government prove too onerous for business, stymieing China’s rise? These days it is a rise better described as “steady” than “meteoric” — will regulatory restrictions and prohibitions dull the edge of an economy that might otherwise be the envy of the world? Meanwhile, a new Bloomberg report out this week suggests China is set for record corporate-bond defaults.

That much you can find online or with a few well-placed phone calls. For a deeper understanding, it helps to talk to faculty, alumni, and students at CEIBS, China’s premier business school and a key laboratory in tackling ideas about — and solutions for — the country’s ponderous economy. They explore these big questions because this is the landscape most of them will enter when they emerge from the school’s 12- to 18-month MBA program. For while CEIBS is unquestionably becoming more well-known outside China, its MBA is still undeniably China-centric: More than 86% of students in its most recent cohort stayed in the country to work post-graduation. 

‘WE ARE ONLY AT THE BEGINNING’

As goes China, so goes Shanghai, growing and growing: From 2000 to 2010, the population of the economic powerhouse in the country’s southeast ballooned from 16.4 million to 23 million; it has since plateaued, reaching an estimated 24 million in 2017. (Similarly, China’s entire economy grew rapidly from 2000 to 2007, peaking at greater than 14% growth in 2007 before easing to around 6.8% in the March quarter of 2018 — still robust any measure.) If you visited Shanghai 10 years ago, you may have trouble recognizing it today. Yet there still is room for more growth, more expansion, more moving into open spaces as the old slowly gives way to the new. The future calls, particularly the promise of cloud services and the internet of things, where Shanghai is poised to pace China well into the coming years. “We are only at the beginning,” CEIBS professor Ginkgo Bai tells participants in the school’s annual bootcamp for prospective MBA students.

Despite being the scene where that beginning and the future it promises is taking shape, the CEIBS campus often seems like an island of quiet calm, more than 1,800 acres of well-manicured lawns and pristine pools surrounding a complex of sleek classroom buildings, residences, gathering places, a library, a gymnasium, and more. The contrast with the city outside the walls is marked: CEIBS is no microcosm, no “China writ small.” There is no evidence of environmental stress here (quite the contrary — it’s a beautiful campus), no issues (presumably) with chronic tax avoidance or employee retention, no over-reliance on irreplaceable key management — all major mitigating factors at corporate staples in the Chinese economy. The school is thriving, earning international prestige in the rankings — CEIBS landed 8th in The Financial Times’ 2018 ranking, up from 11th last year and 17th in 2016 — and consequently becoming a magnet for greater talent, both at the head of the classroom and in the seats. As other elite schools will recognize, one feeds the other: This school, just 24 years old, has found its way into the virtuous cycle.

It’s easy to notice the divide between the walled compound of CEIBS and its bustling neighborhood of Pudong, one of a handful of residential mini-cities in this sleepless megalopolis. Which begs the question: What factors, outside or in, might slow CEIBS’ march to prominence? What might transpire — or conspire — to reverse its good fortune?

CEIBS STUDENTS SEE 168% JUMP IN SALARY POST-MBA

Juan Fernandez, CEIBS associate dean and MBA program director, has the bearing of a man who knows how good his fortune has been. A native of Spain who has spent the last 10? years in China, Fernandez has every reason to be pleased: In the first year of a three-year term as director, he has presided over the continued rise in the rankings and the prestige and attention that comes with it. 

“The ranking is a combination of things,” Fernandez tells Poets&Quants. “It is not just one criterium, it’s complicated. China is playing a role there because it’s a growing economy and a big part of the ranking is salary increase, and if it’s a good economy you have more possibilities of having a good salary afterwards.

“But on second thought, that cannot be the only reason, because if that were the only reason, you would have only Chinese business schools atop the rankings! And there is only one (in the top 10). So there are a lot of things that are important, yes? I think that our career services are top the world — they are doing a great job, finding good jobs, interesting jobs for our students, and we invest a lot in that. And that is also part of the ranking.”

CEIBS is in a good rankings position, if not a dominant one, in relation to its peers: In the FT ranking, it is the top school in Asia, with Hong Kong University of Science and Technology Business School close behind at 14th, the University of Hong Kong at 33rd, CEIBS partner (and rival) Shanghai Jiao Tong University at 34th, and Renmin University of China School of Business at 39th (in the Poets&Quants 2017 international B-school ranking, CEIBS was second in Asia at 16th overall, behind National University of Singapore at No. 13). A closer look at the data behind the FT ranking reveals CEIBS’ chief appeal: graduate pay. Among Asian schools, its “weighted salary” — the average grads’ salary three years after graduating — is $162,858, up $2,988 over last year; in the important category of Salary Increase, measuring how much more a MBA from the school makes with the degree in hand, CEIBS is at 168%, a 13-point jump from last year and best of any school in the ranking until No. 34 Jiao Tong (182%). Yet CEIBS’ top category rank is for Career Progress, where it lands only 23rd, behind a handful of other Asian schools including the top-ranked school in the category, Renmin University of China in Beijing, as well as IIM-Ahmedabad, IIM-Calcutta, Fudan University School of Management, and HKUST.

CEIBS offers students “the opportunity to immerse themselves in a program that integrates a deep knowledge of China’s business environment without losing the connection to the global economy,” Fernandez says. They do so for a median base salary (based on 2017 data) of $63,750, with a range of $18,000 to $157,500.

(See page 4 for CEIBS salary data.)