Chinese students flock to U.S. business schoolsNovember 30, 2010: 11:17 AM ET
Despite historical reservations toward Western business culture, there has been a surge in applications to U.S. business schools from China. And the influx has just begun.
By Greg Spielberg, contributor
(poetsandquants.com) -- When Scarlett Wu's mother taught her to use chopsticks, she always reminded her daughter to keep the three fingers low. In the central-Chinese village of Wuzhu, where Wu is from, everyone grips their chopsticks low.
The grip offers better leverage, but to Wu, it signified her mother's wish that she stay close to home.
None of the 2,000 residents have gone to China's big cities for college, and Wu's entire extended family lives locally, two hours from Shiyan, a city of 3 million with no airport.
So it seems especially adventurous for Wu, now 27, to come to the U.S. to become an MBA student in, of all places, Bloomington, Indiana.
She's among a growing number of young Chinese with business ambitions coming to the U.S. to learn from some of the leading lights of capitalism. In the past five years, the number of Chinese taking the GMAT -- the requisite exam for entrance into a business school -- has tripled to 30,000 from 10,000 in the 2005-2006 school year. The number of U.S. schools receiving GMAT scores from Chinese test-takers has risen to 80,669 this year, from 25,525 in 2006.
The influx is only beginning. Chinese applications to New York University's Stern School for the class of 2012 increased by 30% from the previous year. Nearly 10% of next year's graduating MBA class at Duke University's Fuqua School of Business will be Chinese, a new record. And the number of Chinese students (14) in the class of 2012 at MIT's Sloan School of Management is twice as many as those in the previous year's class.
Three decades ago, the journey to the U.S. for a degree in capitalism might have been viewed as an act of treason in China. Now, the MBA is a badge of honor, a signal of your smarts and your ambitions.
Nonetheless, Chinese students coming to the U.S. to earn the degree face cultural shock. Even those arriving from cities like Shanghai and Beijing must struggle with the nuances of the American language and cultural slang. From cultural dress codes to the aggressive nature of American business schools, new students from China often find it hard to adapt.
For Scarlett Wu and other Chinese students working toward their MBAs at top U.S. schools, it's worth it.
"Everybody knows the U.S. is pretty advanced in this area," says Lewis Yao, 27, a student at the University of Michigan's Ross School.
Since starting at Michigan, Yao has been shocked by aggressive classmates. He says that students have sliced in front of him at job fairs to chat with recruiters, looked past him at team meetings, and dismissed his arguments offhand during group debates.
Communication was a hard slog for Yao until he got used to the different rules of engagement. Now Yao realizes that the more he opens up, the more attention he commands, especially when negotiating with students from, say, Goldman Sachs (GS).
"Maybe that's the style of business school," he deadpans.
It was a tough lesson for the no. 1 graduate of China Foreign Affairs University, a Beijing school founded after World War II to groom diplomats. There, he learned the traditional path toward success in East Asia: Keep your mouth closed, your ears open, the flag up, and you'll go far. Coming from this background, he couldn't help but be shocked when his corporate strategy professor at Ross told him that the most important goal is to maximize shareholder profit.
"Really? Why?" exclaims Scarlett Wu when she hears that a fellow Chinese student was surprised at that.
Even though she came from humble beginnings -- her mother and stepfather worked at the brick factory in Wuzhu -- Wu feels that, from the business side, a company's biggest responsibility is to maximize profits.
Like Yao, Wu recoiled at first when she first experienced the bluntness of competitive American students. She was shy in groups, often preferring one-on-one conversations.
Wharton MBA Shirley Huang, on the other hand, is quite comfortable in the corporate world. She went to JP Morgan (JPM) and then to the Royal Bank of Scotland after graduating from Shanghai's Fudan University in 2005.
Her decision to attend Wharton was based more on a desire for the experience than to advance her career. Huang is already quite familiar with foundations of Wharton's curriculum -- she placed out of microeconomics, marketing and quality and operational management classes and enrolled in accelerated classes for corporate financing and accounting.
"I'm just thinking that while you can work for another 20 years non-stop after business school, experience is something you cannot quantify," Huang says.
For successful Chinese students, studying in America offers a chance to connect with the U.S. before, perhaps, returning to China.
For Scarlett Wu, who's secured a job at Cummins Inc., a heavy-machinery firm in Indiana, she's not interested in going back. Even if it means enduring more embarrassing cultural mistakes such as walking into University of Kentucky's basketball stadium wearing red, which communicates good luck in China -- K.U.'s colors are blue and white. Or when she attended her first Indiana football game this fall and was the only girl in business casual attire among a sea of fire-red Hoosier fanatics.
Misunderstandings about cultural codes often cross back over to the MBA experience. For instance, it was tough for Wu to keep track of the steady flow of recruiters streaming onto Kelley's campus. She'd never heard of many regional companies.
In class, the deep portfolios of brands belonging to corporations such as Kraft (KFT) and General Mills (GIS) are also foreign. She spent one session trying to figure out whether Lucky Charms, the cereal, was a type of fortune cookie or a traditional Chinese threaded pendant.
Lewis Yao had a similar experience when his brand management class discussed how first-born products aren't always the most successful. "Dr. Pepper," which came to market a year before Coke (KO), left him bewildered. As did "Greasy Goose," Sidney Frank's Grey Goose, which is a legendary example of how to build a brand.
In China, American liquor labels Johnny Walker, Absolut and Bacardi are very popular. Grey Goose, not so much. "You really have to know the culture," Yao says.
Yao is getting the hang of it. He's learned that Marlboro's Rocky Mountain ads are meant to appeal to urban smokers or those stuck in tight spaces. This is particularly meaningful to him. Traffic jams plague Beijing, including a recent one that lasted for more than nine days.
Yao has embraced the open roads of Michigan, taking five-hour drives down to Chicago or up to north in his yellow Mazda 6. Sometimes he'll head to Meijer, a big- box store, just to take a study break around midnight when nothing else is open.
Yao enjoys the peaceful quiet of Ann Arbor and says it'll take some adjustment when he does head back to China. When he went to China last year for the Christmas holiday, he was surprised by the intensity of the city.
"I heard more horns in one hour than I did in two months," he says. "There were people everywhere."
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