The Big Picture: China, Shanghai & CEIBS - Poets&Quants

Shanghai. Marc Ethier photo

“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.)

The view from the top of Shanghai Tower, China’s tallest building. Marc Ethier photo

SNAPSHOT FROM SHANGHAI

CEIBS is an island in a fast-moving river. The glowing multi-story buildings that loom around the skyline on the school’s periphery would constitute the heart of a major city just about anywhere else; here, in massive Shanghai, they are just so many nameless apartment and office structures along Hong Feng and Jinke roads, the arteries that make up the school’s borders, far from the really impressive towers of the Bund and the Lujiazui District, the city’s financial center. Far? Thirty minutes by taxi at the swiftest, closer to an hour when traffic really congeals around 8:30 each morning.

It’s easy to forget the frenetic pace outside the school walls. Even when the daily schedule is in full flow, CEIBS’ ultra-modern campus is peacefully quiet. In the heat of the day, students island-hop between air-conditioned oases, dodging colleagues and faculty as well as custodial staff, food staff, clerks, gardeners, security, visitors, and others on their way to lectures, meetings, study sessions, luncheons, and countless other events — the campus is an ideal spot for conferences and gatherings of all kinds. At midday, in summer, as the temperatures rise to 100 and above, the perfectly kept lawns are empty in the sun, and the many bodies of water that ornament the grounds seem to come to a near boil. At night, when the heat drops into the tolerable 80s, students and visitors emerge to wander along flagstoned paths flanked by infinity pools — water is a major theme at CEIBS — walking under greenhouse canopies past secluded gardens, chatting, smoking on still-warm stone benches, and occasionally getting lost — the campus is enormous and confusing to the newcomer. A small soccer pitch abutting a pair of residence halls on the far north of campus lights up, and a pair of amateur teams in smart-looking gear shake off the daytime heat to emulate their World Cup heroes. Somewhere, students gather in small groups to watch a game.

A GLOBE-TROTTING EXEC COMES TO CEIBS

Behram Irani on the CEIBS campus. Marc Ethier photo

Behram Irani, a native of Iran who grew up and attended university in Pune, India, came to Shanghai from Manila, Philippines, where he is chief representative officer for Thermax Limited, leading sales and marketing across Southeast Asia for the India-based engineering company that manufactures boilers for power plants and maintains and operates plants around the globe. Irani, 32, was deciding between a full-time and executive MBA, awaiting word on whether he will be admitted to INSEAD’s executive program; he recently discovered that he’s been accepted. He came to Shanghai to participate in CEIBS’ annual pre-MBA boot camp and check out its executive offerings, one of 70 would-be students hailing from across the globe and widely diverse walks of life. Unusual among the group, Irani has more than 10 years’ work experience, having worked across Africa and spent time in Cali, Colombia before settling in Manila five years ago.

It’s not just the length of work experience that sets Irani apart. It’s the breadth. Holder of a degree in mechanical engineering from Pune University, “I not only learned the manufacturing side, I also learned the sales and marketing side,” he says.

“I started thinking about an MBA in 2012,” Irani tells Poets&Quants. “But I got the opportunity to shift to the Philippines, and it somewhat died out. And then to be honest, when I turned 31, I realized that if I am to do an MBA, this is my last year.”

LEANING AWAY FROM THE MBA, TOWARD AN EMBA

Irani is a perfect example of how a highly qualified, motivated student can be enthusiastic about a school — and still not be a good fit. Besides a deep resume, the biggest feather in Irani’s cap is his score on the Graduate Management Admission Test. After scoring 730 on his first try, he took the GMAT again and notched a remarkable 780. But regardless of GMAT score Irani, whose job will take him to Jakarta, Indonesia in October, is unquestionably at the upper end of the age bracket for full-time MBAs; time and again, he’s been urged to focus on executive programs instead. The persuasion has been effective: He’s decided against full-time programs at IE in Spain and HKUST in Hong Kong, both of which accepted him. While briefly waitlisted for INSEAD’s EMBA, Irani said his second choice was the Kellogg-HKUST EMBA.

His third choice, confirmed by a week in Shanghai, was CEIBS — but the EMBA program, not the MBA.

“In India, doing a part-time MBA or an executive MBA is looked down on, but honestly after doing a lot of research I’ve found that that is misplaced,” Irani says. “I applied for the CEIBS bootcamp to get a sense of being in China, and perhaps working in China. And I have gotten that. My thoughts on this school: This is a great school for Chinese students, and it can be a great school for international students. For Chinese students, this is the No. 1 school. For others, I think, if they are looking to be shifted to China, this is a very good thing. But if you are a U.S. or Canadian citizen looking to go back to the U.S. or Canada, it makes no sense.”

‘I THINK CEIBS WOULD BE THE BEST CHOICE FOR ME’

It makes sense to Tony Hsieh, a native of Taiwan who currently works and lives in Shenzhen for a large IT services company. Hsieh came out of undergrad with a political science degree and little experience in the business realm. Since graduating in 2011, he has worked as an office manager, analyst, and specialist for large companies, and even founded his own health care startup — yet he never acquired the managerial skills he says he needs to advance his career.

Currently, he’s leading a small team of five for the health care and life sciences business group of Foxconn, a company with more than 1 million employees, “and that is a little bit challenging for me,” Hsieh, 29, tells P&Q.

His first interaction with CEIBS was a couple years ago when he accompanied a colleague on a visit to Shanghai. Besides touring some locally based companies, Hsieh also got a view of the CEIBS campus. Back then he had no plans to pursue an MBA degree, because he never thought he’d need one. But that soon changed. 

“I remember being told that the best best way to learn more about the CEIBS MBA program was to join the bootcamp, and I remembered that,” Hsieh says. “Last year in my new job, the idea popped into my mind: Maybe I need MBA training. And because I plan to have my career here in China, I think CEIBS would be the best choice for me.”

Courtesy Luminary Visuals

‘DESPITE BEING HIGHLY RANKED … IT’S NOT VALUED’

Kavya Thachankary has long been sold on China as the country where the most exciting things are happening in fintech and the rest of the digital sphere. What she is not sold on is CEIBS being the springboard for international students to break into the Chinese workplace, or even to maximize the benefits of an MBA back home, which in her case is India.

Her experience in the 2018 CEIBS bootcamp, while positive in some ways, showed that her MBA journey likely leads elsewhere.

“If you go back home with a really good U.S. MBA that everyone knows, you’re definitely going to be doing well,” she tells Poets&Quants. “If you get an MBA from Booth or Tuck or somewhere, you’re going to get an amazing job. But CEIBS, despite being highly ranked, I realize now, from talking to alumni and the career desk, it’s not valued. If the companies are not valuing you as a top MBA, then I don’t know what makes you a top MBA.”

‘THE INNOVATION IS WHAT REALLY DRAWS ME HERE’

Kwadwo Owusu-Agyeman of Accra, Ghana, during the 2018 CEIBS bootcamp. Courtesy Luminary Visuals

Kwadwo Owusu-Agyeman of Accra, Ghana, another participant in the CEIBS pre-MBA bootcamp this year, also will hedge his bets by applying to some U.S. and European schools. But he definitely plans to apply to CEIBS, too, because he agrees with the experts who see China as the future in both the tech and financial services spaces.

“I spend my time researching fintech, and the type of financial technology in China is light years ahead,” says Owusu-Agyeman, 26, an investment banking analyst for IC Securities who studied computer engineering at the University of Ghana. “When I found out there was a CEIBS bootcamp, I knew I had to come, to see the school, see the city, see if it’s something I can experience.”

A few months after joining IC Securities as a tech analyst in 2015, Owusu-Agyeman made the switch to finance, working in capital markets and mergers and acquisitions, serving both institutional and corporate clients. Among other achievements, he helped manage two of the largest IPOs in the history of Ghana’s stock exchange. He likes the work — but tech is not entirely in his rearview. “The reason why I wanted to go into finance is that I wanted to understand how to run a place and what goes into raising money,” he says. “I’m a tech guy, actually, but I wanted to understand finance and investment banking.”

In that space, he spotted a big opportunity. Ghana is a country with bad banking penetration — “people don’t use banks,” Owusu-Agyeman says. “Insurance, pensions, it’s very bad — the population is informal and uneducated, so they don’t use banks. But there’s a new phenomenon, mobile banking — not smartphone banking, but a very rudimentary type of application. But that technology, as basic as it is, is revolutionizing financial services in Ghana.” But it can be much more, he adds. “And when I started reading about stuff like that, it got me really excited because the next stage is probably smartphones for the people in Africa. They don’t trust banks, but if they can understand how to bank on their phones, it will really grow. Fintech is going to skyrocket in sub-Saharan Africa.”

‘SEEING IT WITH MY EYES, IT IS MORE THAN I IMAGINED’

Owusu-Agyeman has a plan, and with the “right mix of tech and finance background,” he hopes get into CEIBS in the fall of 2019. “The innovation is what really draws me here,” he says, but he also expects to apply to Stanford, INSEAD, and some other U.S. and European schools. “Cornell has a great school that combines tech and business management.,” he adds.

One thing that might affect his calculations: Brexit. “The fintech hub in Europe is London, but with Brexit that might change.” In the U.S., might politics play a part in his decision? “I’ve looked at a lot of schools, and I’m not sure anything in government there would change my plans.”

Regardless, “the most applicable and practical things I’ve seen or read about are happening here (at CEIBS),” he says. “I really like the things I’ve absorbed here. That’s really why I’m here. I needed to see the innovation and the energy myself. I did my research, but seeing it with my eyes, it is more than I imagined.”

See next page for the data on CEIBS’ full-time MBA program, including placement, salaries, & more.

DON’T MISS CEIBS OFFERS MBA BOOTCAMPERS ENTRY INTO VAST CHINA BIZ LANDSCAPE and CEIBS MBA DIRECTOR: ‘CHINA IS HOT’

Courtesy Luminary Visuals

 

Base Salary & Other Guaranteed Compensation	All Students Median Base	All Students Range	All Students Median Other Compensation	Chinese Students Median Base	Chinese Students Range	Chinese Students Median Other Compensation	International Students Median Base	International Students Range	International Students Median Other Comp
Class of 2017	425,000 RMB ($63,750)	120K-1.05M RMB ($18,000-$157,500)	150,000 RMB ($22,500)	436,000 RMB ($65,400)	120K-700K RMB ($18,000-$157,500)	150,000 RMB ($22,500)	408,000 RMB ($61,200)	180K-1.05M RMB ($27,000-$157,500)	126,000 RMB ($18,900)
Class of 2016	375,000 RMB ($56,250)	125K-890K RMB ($18,750-$133,500)	60,000 RMB ($9,000)	360,000 RMB ($54,000)	180K-800K RMB ($27,000-$120,000)	50,400 RMB ($7,560)	420,000 RMB ($63,000)	125K-890K RMB ($18,750-$133,500)	83,600 RMB ($12,540)

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