Business in China: MBA Trends

QS applicant research indicates that Chinese MBA candidates earn an average of US$35,000, which they expect to increase by 345% to US$121,000 by doing an MBA – down slightly from the expected 369% increase predicted last year (these lowered expectations are in line with global trends). However in China, they could only expect to earn a combined salary and bonus of US$79,200.

Of course, many choose to pursue the higher salaries they could earn elsewhere. But it is accepted wisdom that, as well as increased domestic MBA uptake, an increasing proportion of MBAs are returning to work in China.

“When I went back to China in 2004, only about 10% Chinese graduate students in the United States chose to return,” reflects Tong Jixi, part of SMU’s class of 2013. “Now, in less than a decade, the percentage has grown significantly.

He believes this has been beneficial for Chinese business. “People with a global education background not only brought back professional knowledge but also a global perspective.  In the future, I see the integration of China’s economy with the world deepening and broadening.”

Ting Yu, a Chinese MBA candidate at the Rotterdam School of Management, also notes the positive influence of returning students: “I have several good friends who have studied abroad, who brought back things like an understanding of the importance of environmental issues and softer skills. I believe this will have a positive impact not just on Chinese business, but on society as a whole.” She aims to have a similar positive impact, by working in the West for a period before returning to China.

In the post financial crash world, we know that nothing can be taken for granted in business – not even China’s seemingly unstoppable rise. Tong believes that there needs to be a switch in gear to continue the strident growth, with entrepreneurs looking in rather than out: “Right now would be the best time for young entrepreneurs to explore opportunities in China, as the government has realized that future growth depends on generating domestic demand, in which case the focus has to be shifted to favour middle and low cap companies.”

Ramakrishna S. Velamuri, chair of the department of strategy and entrepreneurship at CEIBS, concurs with this analysis: “We hope that there is an improvement in one crucial area: the availability of financing for SMEs. Until now, the banking system as a source of finance has been pretty much closed to young private companies, which have had to raise money at very high cost from informal financial networks.” 

Dries also highlights the continued importance of informal networks. “The current business climate in China is still rather heavily dependent on personal relationships, or guanxi. However,” she continues, “opportunities and challenges are plentiful in the developing economy, thus it is a good place for young people to seek exposure, deepen their experience and develop their careers.  The fast-changing Chinese economy offers young business executives and entrepreneurs opportunities that are vastly different from that in more stable and developed markets.”

Ting Yu agrees. “Currently, I personally see a positive business climate in China. Consumption is increasing and confidence is high. There is much more enterprise than before. The government is encouraging university graduates to start businesses with various schemes, and there are many supportive policies to encourage entrepreneurship in sustainable industries.”

So, China, it seems, is increasingly a land of opportunity. Indeed, QS research shows that 7% of global MBA candidates, and, telling, 9% of those from Western Europe, are now interested in studying at a Chinese business school. So, perhaps it doesn’t take too great a leap in imagination to predict that in the not so distant future, China will be seen as more than just a sending nation, but as a destination for students and businesspeople alike.