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When will Chinese consumers demand better colleges?

By Emerging Money September 13, 2012, 07:00:33 AM EDT

While the American educational system receives a great deal of scorn, its colleges and universities are the choice of consumers around the world, particularly Chinese consumers.

[caption id="attachment_73307" align="alignright" width="300" caption="West College, Princeton University, New Jersey"] Image courtesy Andreas Praefcke: http://commons.wikimedia.org/wiki/File:West_College_Princeton.jpg [/caption]

In a Times Education ranking , 14 of the world's top universities were in the U.S., including four of the top five. China, with the world's second largest economy ( FXI , quote ), did not have a single college or university making it into the top 25.

That raises an interesting conundrum for Chinese consumers and others around the world. There are frequent reports showing American third graders or eighth graders do not perform as well as their global counterparts. But why you would base a value judgement on how well an eight or thirteen-year old performs, as opposed to research universities that turn out scientists, doctors, lawyers and business leaders is a question that does easily yield a logical answer.

Responding to that query however, are the best and brightest of China, flocking to American colleges and universities in record numbers. Xi Mingze, the daughter of Xi Jinping, the First Secretary of the Central Secretriat of the Communisty Party, goes to Harvard University, as does Bo Guagua, the son of former Chinese mayor, governor, and finance minister Bo Xilai.

Chinese students have been attending American tertiary education institutions in record numbers. Former Secretary of Education William Bennet recently stated that,

"When I engaged Chinese parents about their children, they would often say, "My son (or daughter) is going to Princeton (or fill in the elite American university)." I would respond, 'Great! What year is your son or daughter right now?" And they would say, "Three years old.'"

Last year the number of Chinese students attending American colleges increased by 43%. This is a tremendous weakness for Chinese consumers: it would be difficult to find an American high school senior aspiring to attend college in the People's Republic.

Chinese students leaving for college in American are most likely the most accomplished and affluent. As they want to leave China for a reason, there are probably even more reasons they will not want to go back after graduating from American universities. China's loss is America's gain.

For China to be a global leader it needs a superior education system -- meaning college, not kindergarten. By leaving for college in the United States, Chinese consumers of higher education are voting with their feet.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, International, Stocks

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