The FT ran a short but interesting piece today on the latest target of Xi Jinping’s dramatic anti-corruption campaign. The latest target is not fancy cars or expensive vacation homes. It’s education.

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Notes the FT:

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 full 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.

The impact of the policy change is being felt already, notes the piece:

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.

I’ve had the chance to teach in China, and the tide of MBA’s there has seem unstoppable — at least until now. I wonder whether this policy change signals to the elite that all education outside the Party system is now frowned upon, or just these specific programs, which, as the piece notes, are expensive and often of dubious quality. Again, Mr. Xi surprises, and there must be a lot tossing and turning in the Chinese government these days as it waits for the campaign’s next target.

Read more:
http://www.ft.com/intl/cms/s/0/7804742c-34aa-11e4-b81c-00144feabdc0.html?siteedition=intl#axzz3CWy1xvbK

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Posted by Carlos Alvarenga

Carlos Alvarenga is the Executive Director of World 50 ThinkLabs and an Adjunct Professor at the University of Maryland's Smith School of Business.

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