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Education China The Almighty Buck United States

Chinese Companies Are Buying Up Cash-Strapped US Colleges (bloomberg.com) 206

An anonymous reader quotes a report from Bloomberg: Chinese companies are taking advantage of America's financially strapped higher-education system to buy schools, and the latest deal for a classical music conservatory in Princeton, New Jersey, is striking chords of dissonance on campus. Beijing Kaiwen Education Technology Co. agreed in February to pay $40 million for Westminster Choir College, an affiliate of Rider University that trains students for careers as singers, conductors and music teachers. The announcement came just weeks after the government-controlled Chinese company changed its name from Jiangsu Zhongtai Bridge Steel Structure Co. The pending purchase rankles some Westminster faculty and alumni, who question what a longtime maker of steel spans knows about running an elite school whose choirs sang with maestros Leonard Bernstein, Arturo Toscanini and Seiji Ozawa. Alumni are among those suing in New York federal court to block the sale, saying it violates Westminster's 1991 merger agreement with Rider and will trigger the choir college's demise.
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Chinese Companies Are Buying Up Cash-Strapped US Colleges

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  • by Antony T Curtis ( 89990 ) on Wednesday March 21, 2018 @06:16AM (#56296079) Homepage Journal

    At least someone is investing in education.

  • This makes sense (Score:5, Insightful)

    by Applehu Akbar ( 2968043 ) on Wednesday March 21, 2018 @06:19AM (#56296087)

    So many of the students at US colleges are already Chinese, so buying some schools out would be a logical next step.

    But wouldn't it be wondrously ironic if a Chinese buyout is what it takes for our liberal arts schools to return to their traditional role of passing on the history and culture of Western civilization? It would be acceptable to teach the works of dead white men once more.

    Colleges are also going to want to ask themselves: in this era of blisteringly high tuitions, why are so many of them "cash-strapped?"

    • It also makes sense since the Chinese value music education far more than Americans. They believe studying music develops good moral character and habits of thinking. Aside from sheer numbers, this is another reason there are so many Chinese in orchestras across the US.
    • High tuition (Score:5, Insightful)

      by sjbe ( 173966 ) on Wednesday March 21, 2018 @08:20AM (#56296377)

      Colleges are also going to want to ask themselves: in this era of blisteringly high tuitions, why are so many of them "cash-strapped?"

      The tuition is high because state funding has dried up substantially and because there is something of a bidding war for talent between universities. A research professor can bring in a LOT of revenue to the university but they don't come cheap. Universities make a lot of money off of research patents courtesy of the Bayh-Dole Act [wikipedia.org]. Plus for a lot of schools we have one of the major parties that tends to oppose using any tax dollars to educate people - especially when the people hired with that money tend not to vote for for them.

      • Re: High tuition (Score:4, Interesting)

        by kenh ( 9056 ) on Wednesday March 21, 2018 @10:05AM (#56296789) Homepage Journal

        The root issue is that colleges and universities are offering amenities and classes that colleges and universities never did before.

        Campuses are now littered with 'activity' centers to entertain and amuse students, and an ever-increasing percentage of students enter college with deficient math or reading skills. Why are colleges and universities taking in students that can't read or write at a 12th grade level?

        How can a college defend charging $500 or more per credit hour to sit in a room with 20-100 other students?

        • by HiThere ( 15173 )

          40 years ago most students at the university I went to had to take remedial English classes. Others needed to take remedial math classes. And that university only even considered admitting students from the upper quarter of the grade profile (normalized via the SAT tests, of course).

          So don't think it's a new problem.

          OTOH, I do admit that I usually found the lectures to be less educational than the section meetings. If all you do is sit in the lectures, then you are either attending an inferior school, or

      • by pots ( 5047349 )
        I don't know where you're getting your information, but the bit about tuition is not correct according to what I've heard. Average tuition has not gone up dramatically [npr.org], private schools have just started to advertise high tuitions in order to lure in more desirable students with "savings" in the form of "generous" grants and bursaries. Also, since a higher sticker price carries with it the sense the the student is getting greater value, i.e.: more prestigious schools are more expensive, none of the schools w
    • Re: (Score:3, Informative)

      by DigiShaman ( 671371 )

      Not when Communist propaganda has infiltrated more than 100 US colleges [washingtonexaminer.com]. Dude! China is pushing the Communist / Orwellian narrative HARD! They will blow ostensibly trillions of yuan to drown all of humanity in it!!!

      • Re:This makes sense (Score:5, Interesting)

        by HiThere ( 15173 ) <<charleshixsn> <at> <earthlink.net>> on Wednesday March 21, 2018 @02:40PM (#56298927)

        If you think China is Marxist communist, then you don't understand either. Rhetoric isn't reality.
        OTOH, Confucianism also doesn't have anything to do with communism (of any sort!) which makes the picture in your link quite peculiar.

        That said, I'm sure they will use their access to push beliefs favorable to them.

        • Forget the notion of whether or not China drinks the Communist Kool-Aid. The point isn't pushing Marxism for sake of ideology. The POINT is confusing the fuck out of everyone to keep the citizens subservient to the State through the lies and obfuscation of the truth. Nothing terrifies a all powerful Orwellian totalitarian regime more than an educated and enlightened citizenry.

          Wonder why the CCP has been both co-opting a branch of Christianity while at the same time demoing churches and rooting out undergrou

    • by gtall ( 79522 )

      Well, speaking for state funded, although associated might be a better adjective, universities and colleges, idiot legislators have been cutting their funding for years. They trot out the usual excuses but regardless, it results in higher tuition for their own seed corn. The legislators don't see it that way, if they can get through their next election, they are happy. They don't give a damn about anyone else but themselves.

    • But wouldn't it be wondrously ironic if a Chinese buyout is what it takes for our liberal arts schools to return to their traditional role of passing on the history and culture of Western civilization? It would be acceptable to teach the works of dead white men once more.

      Why wouldn't they instead teach the history and culture of Eastern civilization, dead Chinese men instead of dead white ones? I will grant this is still an improvement over teaching nothing but hatred of white people.

      • Why wouldn't they instead teach the history and culture of Eastern civilization, dead Chinese men instead of dead white ones? I will grant this is still an improvement over teaching nothing but hatred of white people.

        That's what Chinese universities are for. A wealthy society sends its best young people overseas to gain understanding of new cultures so they can improve trade relations.

        My big takeaway after having lived in Asia is that the main advantage they have over so many other parts of the world is long-term thinking. Organizations public nd private plan for a generation from now. Our public agencies can't think beyond the next election and our corporations can't plan past the next quarter.

  • Cash-strapped? (Score:5, Insightful)

    by Solandri ( 704621 ) on Wednesday March 21, 2018 @06:28AM (#56296109)
    How does a school which charges $40,000/yr in tuition [rider.edu] end up cash-strapped?
    • How does a school which charges $40,000/yr in tuition [rider.edu] end up cash-strapped?

      Now there's the $64,000 question.

      (Actually it's more like the $64 million dollar question when adjusted for 2018 tuition rates.)

    • by swb ( 14022 )

      I can just imagine a laundry list of reasons, topped with the catch-all of "poor management".

      You probably need a scoring system to derive a cash-strap score. Add 1 for being in a large urban area with increased operating costs for labor and supplies. Add 1 for leadership dominated by academics from non-management fields. Add 2 for ill-advised expansion plans (new buildings/facilities, etc) predicated on rising tuition *and* enrollment. Add 2 for financial planning which does not properly account for tui

    • by guruevi ( 827432 )

      Tuition typically only covers 20-30% of a school's income. The rest comes from states, federal, grants, beneficiaries and returns on investment of their endowment.

      • Surely that can't be with most people paying $40k per year? Either that, or someone is grossly incompetent. If you take into account several students per employee and multiply those $40k by a factor of three to boot, you end up with money necessarily disappearing somewhere.
        • by guruevi ( 827432 )

          Okay: $40k/y, avg. 30 students per class = $1.2M/y. Each class requires pretty much one FTE faculty at $100-150k/y. Most faculty have an administrative staff, deans, provosts etc. We've probably eaten half your class income in wages for people directly related to the faculty and a class and we haven't even put down a building or paved a road, gotten your IT or classroom infrastructure, gotten any research done, no TA, RA or any other lab assistant, we haven't paid scholarships etc

          • I just saw my faculty's last year's accounting report and your numbers are out of this world. Somehow my alma mater is capable of doing all those things (which include nuclear reactors and particle accelerators in our case) at half a billion CZK per year per thousand students. If only we started asking students for tuition one day - our budget would triple at these fee levels!
    • How does a school which charges $40,000/yr in tuition [rider.edu] end up cash-strapped?

      Are you kidding? Have you walked through a university campus and looked around? All those huge, beautiful, buildings aren't going to cover themselves with ivy.

      Well, actually, they are, but I think where you see where I am going with this.

      Constructing a building costs millions. It is even more expensive when you make it look like some thing that you expect to see on a college campus. You have to build a lot of the
    • I never went to university,but it has to do with the fact that there is a difference between income and profit.

  • The good news is that the institutions being bought are small ones generally that don't matter... colleges that can burn out and vanish without even being noticed.

    Ideal end game with this sort of thing is that the Chinese get what the Japanese got when they pulled the same move in the 1980s... Ash. Japanese bought a lot of things... paid top dollar for damaged assets... and when time told on the wisdom of the investments... they lost their shirts.

    I bare no hostility to the Chinese, but just like they don't

    • by ghoul ( 157158 ) on Wednesday March 21, 2018 @06:49AM (#56296153)

      The prosperity of US is built partly on the fact that its considered a safe haven for investments. Doesnt matter if you are a corrupt Chinese bureacrat, a Nigerian scamster, a Rwandan genocidal warlord, a Korean monopolist Chaebol kingpin, a south American drug kingpin, a corrupt Indian politician, an inbred European ex Royal with ill gotten Nazi loot; The US welcomes all investments.

      The US does not grab your property for personal crimes. It only confiscates property belonging to nation states it has disagreements with.

      So once you have made your money and would like to go clean you invest it in USA and retire to the US.

      This reputation is hard won and many a constituional and moral principle has been sacrificed for this key pillar of prosperity.

      You dont want to endanger it just to feel some Schadenfreude over the Chinese losing money on their investments.

      Rather you should keep rooting for a booming US economy with constant inflow of foreign money. A booming economy lifts all boats.

      • retire to the US

        All totally true, except most don't want to retire here. A neat thing about US investment compared to other countries is that it can be done with very little local presence. You don't need to physically come here every month or three to protect your investment from others. Also, pretty much every country graciously accepts the US dollar and many times won't even charge you much in taxes or exchange fees.

        So you can live where ever you want and pull just enough low tax/fee income for your monthly expenses f

      • I guess you've never heard of "civil asset forfeiture", which is quite popular with many law enforcement departments these days. If the police just "feel" that anything you have might somehow be related to drug money, they can (and often do) seize it. Then you have to take them to court and prove it's NOT, often spending more than what what seized. No proof, arrests, or real "due process" is needed from them to keep your stuff. Carrying cash to go buy something? You might be going to buy drugs (even thou
        • by c ( 8461 )

          I guess you've never heard of "civil asset forfeiture", which is quite popular with many law enforcement departments these days.

          Pfft. That's for poor people who can't fight back.

          If you're the sort of rich person who has "investments" and can afford lawyers, you'll probably be fine.

        • Civil forfeiture isn't "grabbing the property of people who commit crimes." It's grabbing property WITHOUT proof of a crime. Much worse.
      • by dj245 ( 732906 )

        The US does not grab your property for personal crimes. It only confiscates property belonging to nation states it has disagreements with.

        So once you have made your money and would like to go clean you invest it in USA and retire to the US.

        This reputation is hard won and many a constituional and moral principle has been sacrificed for this key pillar of prosperity.

        You dont want to endanger it just to feel some Schadenfreude over the Chinese losing money on their investments.

        Rather you should keep rooting for a booming US economy with constant inflow of foreign money. A booming economy lifts all boats.

        I generally agree this is good. If you're in Mexico and your family is sending you money every month, that is good both for you, and for Mexico in general. If your company is on the ropes and an overseas company buys it when no domestic firm would, that is good too. But in other cases it is not good.

        Property prices in several cities are skyrocketing in part due to foreign buyers who neither rent nor reside in them. This makes housing less affordable to people who would actually live there.

        College

      • I'm not talking about doing anything. I'm talking about bad investments not paying out.

        A lot of small universities are going broke. The big ones are doing very well but the marginal ones are dying left right and center. They're bad investments.

        So I'm not cheating the chinese. I'm not doing anything. Bad investments are bad.

        As I said, the Japanese did the same thing in the 1980s. They went crazy with their money and made a lot of really bad investments. When their money ran out, Japan went into a decades lon

      • by unity ( 1740 )
        "The US does not grab your property for personal crimes. It only confiscates property belonging to nation states it has disagreements with."
        You must be kidding. The US govt now steals more via civil asset forfeiture than is stolen via ordinary burglary. https://www.armstrongeconomics... [armstrongeconomics.com]
    • by geekmux ( 1040042 ) on Wednesday March 21, 2018 @07:00AM (#56296199)

      Good fences make good neighbors.

      Now that's an ironic statement when talking about a country fighting for sanctuary cities and utterly defiant on applying that logic to Mexico...

      • That matter is obviously controversial within the US. Some desire one outcome whilst others desire another. We'll see how it works out. Push as you can see is coming to shove.

      • by HiThere ( 15173 )

        If you read the Robert Frost poem that feature that line, you won't find it exactly ironic, as much as an interesting literary reference.
        The poem is called, IIRC, "Mending Wall". And it's about a disagreement about precisely that point.
        "Something there is that doesn't love a wall..."

    • Re: (Score:2, Insightful)

      by AHuxley ( 892839 )
      All the best tech gets sent to China as its created. Nothing discovered is allowed to stay to the USA.
      From the US lab to China. The faculty is now the intellectual property of China. So are all their projects and results.
      The campus goes full Communist.
      • Most of the research is happening at the big universities which china can't buy. I fair number of them are not even private entities.

        China isn't buying a UC school, MIT, or any of the Ivy Leagues...

        The underlying problem with china is integrity. They don't honor patents. Not just US patents but any patents. They don't honor their own patents. Until they start honoring patents in practice and fact I don't think Chinese technological supremacy is a serious concern.

  • by monkeyxpress ( 4016725 ) on Wednesday March 21, 2018 @06:42AM (#56296133)

    When the world was on the gold standard, running a trade deficit was a big deal. If the deficit was not addressed quickly, gold reserves would run down, and the country could quickly find itself in a position where it did not have enough hard currency to buy the things it needed. Regular folk on the street could easily see the impact of not producing enough goods to sell overseas as you needed/wanted to import. Countries had industrial policies. Politicians lost power on account of not managing the trade deficit.

    When the US ended the gold standard (because it ceased generating trade surpluses) and currencies floated, it gave politicians a number of new tools to manage (fudge) trade deficits. The first was that countries like the USA, which held global reserve status, could inflate away the value of their currencies and hence any debts owned in those currencies. You could just give a foreign country a bunch of dollar bills, then print the value of those away so when the foreigner came to buy some goods from you a little while later you didn't have to give them as much stuff.

    As you can imagine, foreign countries didn't really like this (nor domestic savers) so politicians had to find other ways to balance the deficits. The biggest trick they found to doing this was in the form of liberalized international capital flows. Basically, this now meant that you could buy a bunch of goods from a foreign country, and instead of having to trade them back some hard goods, you just sold them part of the capital assets of your country. Houses (either directly, or in the form of ever growing mortgage debt), businesses, infrastructure. Even the future earnings of your children in the form of treasury bills (future tax obligations) and student loans. Politicians could just flog this all off so that the flow of cheap shiny toys would continue without their voters having to build the factories or perform the labor to earn them.

    Of course countries like China are also playing a dangerous game, as US voters could eventually decide to default on those payments (e.g. foreign buyer bans), which is why China is rapidly trying to reduce its dependence on US trade. But for now most people are happy to trade their house and children for cheap manufactured goods, while simultaneously moaning that the Chinese want something in return.

  • by angel'o'sphere ( 80593 ) on Wednesday March 21, 2018 @07:18AM (#56296219) Journal

    ... but this comes from the brain dead idea that everything is privatized.

    You can't buy a german or french university. Well, we have a few "private schools", too. Sure. But I don't even have one in mind while I write this.

    • by Maritz ( 1829006 ) on Wednesday March 21, 2018 @07:30AM (#56296253)
      lol we're talking about the US here. You can buy laws, you can buy public office, so you can sure as fuck buy a college.
    • by Nidi62 ( 1525137 ) on Wednesday March 21, 2018 @07:47AM (#56296293)

      ... but this comes from the brain dead idea that everything is privatized.

      You can't buy a german or french university. Well, we have a few "private schools", too. Sure. But I don't even have one in mind while I write this.

      Since the company that is trying to buy this school is (Chinese) state-owned, does that mean the school is no longer a private university?

      • Anything that is not "public" in terms of direct US administration is thereby private, even if the investor is another sovereign state.

        You want to know what the difference is between an international corporation and another nation's government? The latter has a military and we interface with the government that controls it via diplomats. I suppose when the Nation of Amazon rises, it'll be treated the same.

    • Where's the "brain dead" part? No one is forcing anyone to attend the school or even work there.
    • by JBMcB ( 73720 )

      You can't buy a german or french university.

      You're assuming the government wouldn't sell one if properly motivated. Well, since Germany controls the central bank of Europe, it could just print money and buy it's way out of an economic crisis, until hyperinflation kicks in, of course.

      But if the government of France goes on a hiring binge and ends up underfunding it's pension system, it'll have to get the money from somewhere.

      https://en.wikipedia.org/wiki/... [wikipedia.org]

      Well, as of 2016 they are 36 billion EU of their way to a 150 billion EU goal. Hmmm...

      • Well, since Germany controls the central bank of Europe, it could just print money
        While the bank, that means its offices, are in Germany, Germany is in no way controlling the european currency.
        And if you had followed recent developments you would see we are far from "printing money".

        President of the EU central bank is the italian Mario Draghi.

    • Not every school is private in the US. Plus these are speciality schools (music schools). I don't think people read the summary.
  • I for one welcome our chinese overlords,
  • The board members of a Chinese steel company know exactly as much about running an American school as the American administrators who turned it into a degree mill for Chinese people and a daycare for American Boomers' "adult" children.
  • granted, I of course haven't read TFA, but considering that, as a general rule, tuition rates have increased far faster than, say, professor pay scales, why are there cash-strapped higher education institutions? Or is it that there do exist higher ed institutions that are financially responsible and have reasonable tuition, which in turn drives away students who want to spend tons of "free" loan money at more interesting colleges, and this is a group of investors looking to "fix" that "problem"?

  • "The pending purchase rankles some Westminster faculty and alumni, who question what a longtime maker of steel spans knows about running an elite school whose choirs sang with maestros Leonard Bernstein, Arturo Toscanini and Seiji Ozawa."

    Well, considering the school was bankrupt, I'd ask the Westminster faculty and alumni if THEY know much about running anything either.

  • Hey, graduate you got PhD advisor? University?
    Yeah, we might study. How much?
    200000
    What'll we get for 100000 dollars?
    50000 dollars is all my mom will cosign for.
    What do we get for 100000 dollars?
    Every degree you want.
  • You can BUY US-schools?

    Wow... I guess something went wrong way before the Chinese appeared on the scene... That's the problem with selling something: It means giving it up. You can't sell a cake and eat it.

    Or as they say: Us universities offer the best grades your money can buy.

  • It's just a kleptocracy using its dictatorial control to purchase functional things in the free west, away from potential unrest at home where they dictate so they can kleptocratize...ohhhhhhhhhh I see how this works.

  • I think an obvious reason for China to do this, is so the Chinese kids that come over here on a student Visa will have it made clear to them that it's 'preferred' they go to the Chinese-owned schools, where they'll still get the benefit of Western education -- but with the oversight of the Chinese owners (government, no doubt), who will ensure that they're not getting 'Westernized' (read as: make sure they tay within Party boundaries).

    I am not comfortable with this. Something should be done to discourage
  • by Notabadguy ( 961343 ) on Wednesday March 21, 2018 @01:14PM (#56298161)

    FTFA: It's an opportunity for chinese schools to upgrade their art education.

    "Xu Guangyu, chairman of Beijing Kaiwen and a choral singer in college, said the two institutions can operate in harmony. He runs K-12 schools in China and said Westminster could provide the knowledge to help upgrade arts education for his students. Xu said he won’t cut Westminster’s budget or staff. Westminster’s programs include master’s degrees in choral conducting, sacred music and organ performance, and notable alumni include Dorothy Maynor, founder of the Harlem School of the Arts, and Yannick Nezet-Seguin, incoming music director of the Metropolitan Opera in New York.

    “They can set up our entire music curriculum and bring all kinds of exchange opportunities,” Xu said. “It’s pretty difficult to find these musical resources.”

  • Colleges should "loan" students an education and in their following oh say 10 years after the student pays back X% of the money they make. If their education was any good then the students job placement will reflect that and the college will make money, if not then the college will sink due to lack of proper education and subsequent lack of funds.
  • Sorry guys, you are realizing this too late. Chinese conglomerates are buying everything that's cash strapped and might have some use for them in the future.
    In the particular case of schools, I'm not even sure if chinese government interference is as bad as american government interference anymore... at least the first one is not completely guaranteed, and there will be some pressure for regulation on the neutrality of educational material. The second not only is currently set to destroy the entire system,

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