Monday, 16 April 2018

Nankai: EMBA Degree Mill at centre of stern rebuke to senior management

Its been quite a while since our last post.  We've been preoccupied with a number of other projects and distractions (good and bad), including, but not limited to: the 19th Party Congress, 40th birthdays Xmas, Spring Festival, the 13th NPC and CPPCC and, of course, the "trials" of academic life.  

Also, we seem to have been locked out of Blogger platform, an issue which is now, happily, resolved.
So, a brief but interesting post to get us back into the swing of things.
For those who've been following political developments at the 19th Party Congress (Oct 2017) and the recent National People's Congress (March 2018), it will come as little surprise that party and public sector discipline is very much at the forefront of the Xi agenda over the next five years.  

The recently installed Politburo Standing Committee (PSC) anointed no apparent successor to Xi, with no member of the current PSC young enough to serve as General Party Secretary from 2022-2032 inclusive.  This indicated that Xi intends to stay a third-term, with Li Keqiang, Wang Yang, Wang Huning and Zhao Leji aged 67 or under at the 20th Party Congress in 2022 and also able to continue for another term.  Li Zhanshu and Han Zheng will be aged 68 and are expected to step down in 2022. This makes it possible that the two replacements for Li and Han will be the anointed successors for Xi Jinping and Li Keqiang (though this still leaves China watchers with questions concerning the other 5 places on the 21st Politburo Standing Committee). 

Moving forward to March 2018 and the National People's Congress, there was much gnashing of teeth and frothing at the mouth amongst China watchers when it was announced that term limits for the positions of PRC President and Vice President, essentially symbolic positions within contemporary Chinese politics, were to be removed. 

The retention of loyal deputy Wang Qishan as Vice President of the PRC, moving from 6th place on the Politburo Standing Committee and Head of the CCP Discipline Inspection Committee (CCDI), certainly broke the established protocol on age limits: Wang Qishan already 68 years old yet appointed to a new position in the PRC government.  Wang has also allegedly been attending CCP Politburo meetings as a kind of unofficial 8th member.  

Why is this relevant to this post on Chinese higher education?  Well, it was mooted that Wang would take on the newly minted state organ charged with anti-corruption in the public sector: the National Supervisory Commission.  Back in 2017, it was announced that the CCP's internal "shuanggui"
双规extrajudicial investigation system would be made a thing of the past.  What has, in effect, happened is that this extrajudicial system has been expanded beyond CCP members to the entire public sector with the National Supervisory Commission, headed by the Deputy Head of the CCDI Yang Xiaodu, now charged with anti-corruption investigations across the entire public sector.  That's around 70 million employees at schools, universities, state owned enterprises, hospitals and any other public sector institution you care to think of.  

This is important as it will extend the reach of the Xi administration's anti-corruption investigation and, crucially, extend it further down the ladder allowing for minor infringements of discipline to be more leniently punished in exchange for information on violations by those further up the food chain.  

It will also bring many of China's universities under the spotlight and, as anyone with any experience of Chinese HE over the last 20 years, there's a lot of in-plain-sight dodgy dealings. There now seems an increased resolve to drive home the central premise at the heart of China's official education policy: that higher education is not a global commodity or service to be traded on the open market, but a service for public good which must be tightly regulated.  We've seen this in recent exclusion of for-profit schools from the compulsory education sector (ages 6-16), and the mass closure of many programmes operating in publicly funded facilities (circa 2015 around 200 of these were closed down).  

So the announcement this week on Nankai's Executive MBA (EMBA) programme makes for very interesting reading and, it is not unreasonable to predict, will become a more regular news story as the Xi administration rolls anti-corruption investigations out through the education sector.  

The sordid details of this scandal have only recently come to light via a Ministry of Education (MoE) announcement (Circular of the General Office of the Ministry of Education: Processed Results Report on Non-Compliance of operations at Nankai EMBA program
教育部办公厅关于南开大学EMBA违规办学问题处理结果的通报). The full story was reported late last week in The Paper (Chinese).    The language is very strong in its condemnation of Nankai senior management and of the alleged offences which have been committed. It also reveals the apparent impunity displayed by senior management even in full knowledge that (i) operations were illegal and (ii) they were being pursued via official investigations over the last 5 years.  

Essentially, what appears to have been in operation since 2002 is a degree mill using Nankai's very prestigious name in Chinese HE, and effectively licensing it (without approval) to 35 entrusted partners.  This was undertaken solely to generate revenue via higher fees and increased enrolments. Of the 35 partners, 21 were intermediaries engaged for hard-sell recruitment.   Since 2002, Nankai, which is located in Tianjin, "illegally" established training centres in Beijing, Shanghai, Guangzhou, Shenzhen and Qingdao, outsourced recruitment and enrolment to its trusted intermediaries and not only failed to ensure admissions standards were satisfied, but actively developed pre-EMBA courses to extract further money from candidates.  

Senior management were criticised for lax financial management, the charging of non-standard tuition fees, and illegal income and expenditure, including specific criticism following on-spot disciplinary checks after April 2013 for failing to adhere to the spirit of and directly violating the Central Eight Provisions (
中央八项规定) when spending school funds on lavish banquets and "expensive alcohol".  

Additionally, in 2015 as many as 55 students were admitted despite having not submitted verifiable bachelors degree certificates, a crime under Chinese law, while refunds to those students admitted despite lacking the required qualifications had still not been settled by June 2017.  Spot checks on 2013, 2014 and 2016 enrolments discovered that 50% of students were taking EMBA courses before their admissions had been processed, or their qualifications had been vetted.  

Chaotic teaching and seriously sub-standard examinations were also highlighted in the report, 

The Paper, a state-media outlet, adds some strongly worded criticisms of Nankai University and the Business School, noting the "serious" violations which included "the use (misuse) of profit and deviation from the direction of socialist education" (

Nankai University has had the right to recruit to EMBA programmes revoked by the MoE. Seven senior management have been disciplined as a result of the investigations, including Sun Yue, Party Secretary of Nankai Business School; Zhang Yuli, Dean of Nankai Business School; Sheng Bin, Head of the Department of Economics.  

In terms of figures, it is estimated that  that the cooperating third parties received ¥86 million in fees over a period of 15 years, and while total revenues generated by the EMBA are not given, they are described as "huge" (
巨大). Nankai's EMBA fees have remained steady over the last decade, growing from ¥198k (2007) to ¥228k (2017).  However, fees at other leading universities have exploded: 

EMBA Tuition RMB
EMBA Tuition US$
Year Fees Charged
Shanghai Jiaotong
Xi’an Jiaotong
Sun Yatsen
Note:               All data for 2-3yr PT EMBA programme depending on delivery schedule. 

 A rough estimate would conservatively put Nankai's EMBA revenues from 2002 - 2017 at ¥840m, based on a figure of 4000 students referred to on Nankai's EMBA page which, as recently as February, was proudly promoting its success, including speeches from Nankai President Gong Ke referencing the "new era of socialism with Chinese characteristics".  
A major question, given the exorbitant fees charged and the relatively lax oversight of MBA and EMBA operations across China's HE sector, would be whether we're going to see a flurry of anti-corruption investigations springing up in C9 and 985 university business schools. 

During the 1998-2008 period, several prominent Chinese HE researchers were highly critical of practices in top-ranked universities.  While it was implied that corruption was the main issue, the main factor facilitating this was an institutional preference for revenue generation coupled with a desire amongst senior academics to run their own companies. 

One study by a prominent scholar at HZUST highlighted the main problems in the professoriate being not corruption, but getting them to do any professorial work whatsoever.  No research, no teaching, no administration - focused only on generating revenue usually through piggybacking on the institution's credentials and setting up companies in the private sector.  One issue which isn't dealt with clearly in the report is who owned those 35 intermediary companies and partners.  It would be wholly and entirely unsurprising if Nankai faculty were in someway involved in the ownership of these schemes too.  Certainly, we've seen similar operations sitting underneath certain Sino-Foreign programmes and institutes, where property leased for teaching facilities in officially approved programmes is owned fully or partially by those responsible for developing and approving the Chinese partner involvement. 
In any case, it is going to be a very interesting next five years in higher education.  Alongside anti-corruption drives being expanded further into the public sector, and evidence higher education is being watch closely, there are a number of other developments to watch for. 

Most notably, is the mobilisation of higher education in service of Xi Jinping's New Era discourse, and specifically the application of HE in communicating Core Socialist Values.  These have now been written into the constitution of the PRC, an arguably more important development of he the 13th NPC than the removal of term limits.  We fully expect that, alongside the predictable establishment of research centres clamouring to avail themselves of funds for studying the new party doctrine, we will see some other developments across all HE activities, including teaching, research and administrative and organisation culture, with the Party firmly leading the way in all three.