Wednesday, February 21

The moral hazard of dealing with China



Shortly before its first-ever applications period was due to close, the Schwarzman Scholars program held an admissions seminar at the prestigious Tsinghua University in Beijing.

The elite China-based graduate program, funded by American businessman Stephen Schwarzman’s personal wealth and fundraising efforts and modeled after Oxford University’s Rhodes Scholarship, had recruited heavily from the world’s top academic institutions, including Harvard, Yale, and Cambridge. It would kick off its inaugural academic year in fall 2016, and was aiming for a cohort comprising the best students from China and around the world. To guarantee a “scientific and fair” admissions process, the program invited a group of experts to participate in the seminar.

The meeting, held on September 20, 2015, was attended not just by academics and administrators, but also by top Chinese Communist Party luminaries, including officials from the CCP’s Youth League, Central Party School, and the State Council, as well as a high-ranking member of the United Front Work Department—the party’s political-influence arm. These participants “conducted an in-depth discussion on how to select China’s future leaders,” according to an article posted to the Tsinghua University website. The fact that such officials helped guide the Schwarzman Scholars admissions process reflects both the importance China’s leaders ascribe to the program and the party’s desire to leave nothing to chance.

But the program’s relationship with the CCP, while offering non-Chinese participants a rare inside look at the future elite of a one-party state, highlights a growing moral hazard confronting Western universities: As Xi Jinping’s China descends deeper into repression, curtailing personal as well as academic freedoms, at what point do the restrictions placed on American, British, and other institutions seeking to establish campuses and joint programs in China a lucrative market and crucial subject of study—become too much to bear?

Dozens of Sino-foreign institutes and hundreds of joint educational programs exist in China. Among them, the Schwarzman Scholars program is particularly vulnerable to pressure from the CCP. That’s because, unlike other U.S.-China education initiatives, it has no American academic institution as a partner. Its primary institutional tie to the United States is the private education foundation of Stephen Schwarzman, a billionaire with extensive business dealings in China. In 2007, a year before his private-equity firm, Blackstone, opened an office in Beijing, Schwarzman’s firm announced that China Investment Corporation, China’s state-investment vehicle, would acquire a $3 billion stake in the company. (China sold the stake in 2018.) Schwarzman Scholars’ institutional home, Tsinghua University, is subject to Chinese laws and owes its continued existence and funding to the Chinese government’s largesse. Though the program is staffed with highly respected individuals, it isn’t affiliated with any Western-based academic institution that could serve as a moral counterweight, or draw a line in the sand should the situation in China deteriorate.

The program has particularly close ties to the United Front, which is key to understanding the CCP’s influence both at home and abroad. The party exercises tight discipline over its 90 million members, and the United Front is responsible for establishing ideological sway over everyone else, including foreigners and Chinese nationals who live overseas. Under Xi, the United Front has undergone a restructuring that has amplified its power and strengthened its clout both inside and outside of China. One of its bureaus focuses specifically on students and professors, and sent a top representative to participate in Schwarzman Scholars’ 2015 admissions seminar. A United Front magazine, Exchange Student, has also featured the Schwarzman program.

The program and the United Front share personnel ties too. The United Front views David Daokui Li, who was the Schwarzman Scholars’ founding dean and is now a finance professor at Tsinghua, as an especially reliable ally. Beijing Education, a magazine published by the Beijing Municipal Education Commission, dedicated an entire April 2017 article to praising Li as an “outstanding nonparty representative”—a term used by the United Front for people who are not official members of the CCP but who promote its goals and mission, and who “have the willingness and ability to participate in political affairs.” Li’s résumé is filled with recent United Front affiliations: He has served as a national representative to the Chinese People’s Political Consultative Conference, a party organization of more than 2,000 delegates that is an important domestic arm of the United Front; has attended numerous conferences hosted by the State Council and the United Front, according to the Beijing Education article; and has “received a high degree of recognition from the Central United Front Work Department and the National Committee of the Chinese People’s Political Consultative Conference.” (Li did not respond to a request for comment.)

Julian Chang, the former Schwarzman Scholars associate dean of student life who joined the program in its inaugural year from the Harvard Kennedy School, also in 2015 became a nonresident senior fellow at the Center for China and Globalization, a Beijing-based think tank that was founded by the Western Returned Scholars Association itself officially directed by the United Front. CCG’s founder, Wang Huiyao, describes himself in an online biography as a “member of the expert advisory group of the United Front Work Department.”

Schwarzman himself met with Sun Chunlan, the former national head of the United Front, in April 2018 at Zhongnanhai, the party and government headquarters in Beijing. In July 2018, Schwarzman Scholars co-hosted a conference on Chinese philanthropy with Tsinghua University and the CCG. One of the highlighted speakers was Tan Tianxing, deputy minister of the United Front.

Of course, when operating inside China, engaging with the CCP and its many departments is to some extent inevitable—these are the mechanisms by which institutions are created and sustained. It’s also neither surprising nor nefarious that a party ally like Li was offered a founding position at Schwarzman and appears to have been recognized by the party for his overtures. In a China that is more and more authoritarian, major initiatives such as Schwarzman Scholars are only possible with the assistance of those whom the party trusts—and to create a new program, especially a high-profile one dedicated to a higher calling than profit, its founders must secure the support of the party.

But these kinds of compromises were far easier to accept a decade ago, when a kinder, gentler version of the party ruled.