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Chinese Companies Are Buying Up Cash-Strapped U.S. Colleges

253 points by samspenc 9y ago

organsnyder 9y ago
Westminster has a towering presence in the choral music world. At one point, the plan was to shut down the college entirely, so this purchase is definitely an improvement. It will be interesting to see how the college evolves after the acquisition.
nwatson 9y ago
Japanese companies bought into US real estate, infrastructure, corporations etc. in the 90s then had to relinquish much of it at cut rate prices. Same will happen here I imagine.
- HumanDrivenDev 9y ago
  China faces even more serious problems that Japan did at the time. Much of the country still lives in poverty and there's no social safety net.
  - qaq 9y ago
    Fortunately US has a very developed social safety net.
hangonhn 9y ago
"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." I think that sentence provides some insight into the deal. As China becomes wealthier, their aspirations will be elevated as well. There's a lucrative opportunity here where the prestige of an American institution can be used to attract family who have the means and aspirations for their children to be acquainted with cultures and arts other than the ones they are born into. It's kind of funny to hear people complain about a former steel company taking an interest in music education given the prestige that Carnegie Hall holds in American culture.
- deleted 9y ago
  [deleted]
- erikb 9y ago
  Even without these institutions arts universities of all kinds are overflowing with children from Chinese rich families. It's already a huge, wealthy market. It's just not as funny as a Chinese math genius, so fewer people outside these schools talk about it.
  - GuiA 9y ago
    Yes, this is important to realize. I work in a fairly reputable design studio, and we take in interns every year. This year, all of our applicants were Asian students from overseas (mostly PRC) attending art/design schools in the US. In many cases, they do seem to come from wealthy backgrounds (eg went to private high schools abroad, etc). That was definitely not the case 5 years ago. The only ones who can attend art school anymore are kids coming from very wealthy backgrounds.
- smilekzs 9y ago
  > Xu Guangyu, chairman of Beijing Kaiwen and a choral singer in college... > Westminster’s odd couple may not be such a mismatch, given Xu’s background as a choral singer at Peking University. In the early 1980s, his high-school music teacher in Beijing took students to performances of operas “Carmen” and “Madama Butterfly,” and the ballet “Swan Lake,” he said. At the very least the buyer does appreciate the art involved.
  - Johnny555 9y ago
    Or, at least he claims to have that appreciation to get the sale done.
    - mazerackham 9y ago
      seems like we could give him the benefit of the doubt in this case, no?
RobertRoberts 9y ago
An idea, any foreign country that forbids buying land in their country [0] is not allowed to buy land in our country. Sound equal? [0] "Foreign investors are not allowed to buy land in China. The land in China belongs to the state and the collectives." https://en.wikipedia.org/wiki/Chinese_property_law#Buying_land https://en.wikipedia.org/wiki/Chinese_property_law#Buying_la... Edit: I think it's reasonable to leverage our freedom as an asset instead of a liability to be abused. Edit: Replaced "fair" with "equal"
- rgbrenner 9y ago
  Chinese can't buy chinese land. They only get the right to use the land. Land-use rights can be bought by foreign investors for some projects.
  - seanmcdirmid 9y ago
    And they might even be granted as an incentive....
  - HumanDrivenDev 9y ago
    That's not the rest of the worlds problem. If they want to buy other peoples land, then other people should be able to buy theres. They're taking advantage of us.
    - ghaff 9y ago
      Except in a small number of locations, the US doesn’t exactly have a land shortage. Nor a particular shortage of small liberal arts schools with sketchy financial situations.
  - pascalxus 9y ago
    Yes, but for the right to use that house or condo, they don't need to pay property taxes, whereas most of the rest of the world you have to pay rent (property taxes) to the government. If you have to pay vast sums of rent to keep it, do you really own it?
jermaustin1 9y ago
Are these colleges accredited? And if so, will they still be accredited and reviewed just as they were when they were wholly owned by the University? It smells weird that a foreign state-owned company wants to buys a US college. Maybe they want the land, or maybe its all about that tuition money. The China sees that we Americans are stupid enough to pay $30-40k per year to go to a private music college, and they want a cut of that.
- lainga 9y ago
  It is a safe haven for capital, too - see the comment below about the 1980s Japanese property bubble.
- pzh 9y ago
  Or most likely, they do it for the real or perceived immigration benefits. An accredited educational institution in the US can issue F-1 student visas, and these can be converted to OPT, H-1B, Greencard, and ultimately a US Citizenship. That's probably what would attract wealthy families to send their kids to an unknown no-brand college that is clearly owned by a Chinese company.
mark-r 9y ago
How is it possible that any colleges are cash-strapped with the tuition they are charging these days? It boggles my mind - they must be incredibly mismanaged.
- dv_dt 9y ago
  I haven't seen any reports, but my impression is that many universities have cut loose many permanent professors, hiring masses of part time, super low wage adjuncts. At the same time gold-plated administration and facilities costs have increased much faster than inflation along with textbooks and tuitions. It's a massive devaluing of the actual education with super-inflation on the trappings of education.
  - sli 9y ago
    Literally describes my last uni to a T, it was a new state uni. I left before finishing my degree because all the good professors left after their first year, leaving some very blatantly unqualified professors behind. Most (but not all) of the replacements are adjuncts. Also, I got a job in my field, which made it easier to leave. My favorite example to give to explain their hiring problem is the professor of a webapp development class, a computer science professor, who was completely dumbfounded by ES6 syntax and closures and taught straight from the W3 Schools website. Literally came into class, plugged in his laptop, opened W3 Schools and started reading. I ended up tutoring a lot of people for that class, and typically had to dispute all my test grades by proving that my (handwritten -- he was that type) code worked. That is to say, he was simply not qualified to teach that class. Not even close. We didn't even get anywhere near finishing all the material, we never even wrote a single webapp in that class. We didn't even get close to that point. However, the building is gorgeous. And also sunk so far in the first year that they had to bolster their drainage considerably. This is Florida, by the way. Rain is a way of life here, and they didn't plan for it. After the recent hurricane, the building was damaged, but they can't do a whole lot to fix it because the architect owns a copyright on the building. It's a damn shame that if the damaged parts fail, it will be a huge disaster because directly under them is the glass-filled roof over the student commons. Feel free to guess the school if you like, it should be easy. But I have nothing more to add. E: Wait, I do have one more thing to add. I worked in a lab with grad students, ostensibly as a tech but since I was already experienced with the stuff we were doing (mostly development), I was instead tasked with real R&D. Except all of my work just ended up on a table to be used as a marketing tool during the ten tours that stopped to gawk at us every day. None of it ever went anywhere. And now that lab is going unused. So basically all that money just went completely wasted.
thathappened 9y ago
I wonder if this is their answer to their absurd requirements to get into American Universities
hguhghuff 9y ago
I wonder what it might mean if extrapolated into China eventually buying the lions share of houses, farms, companies, infrastructure, educational institutions.. What would be the outcome? It’s sort of weird that such buyup isn’t seen as a national security issue.
- xkcd-sucks 9y ago
  It is in Australia, where food supply is the hot commodity for foreign investment
- wolco 9y ago
  The outcome would be higher land taxes.
- kuschku 9y ago
  Americans bought the lions share of farms, companies, infrastructure in Europe in the past 70 years. Now it’s gonna be China. It’s too profitable to worry about it, and just like we sold out to the Americans, they’ll now sell out to China, as the circle continues.
  - adventured 9y ago
    The US acquired practically zero infrastructure in Europe over the last 70 years and practically zero of Europe's farming output. Europe as a whole is notoriously protective of its farming, both in terms of ownership and tariff protection. Trains/rail, bus systems, power generation, power distribution, telecom - US companies own an extroardinarily tiny share of those things in Europe overall. Verizon + AT&T are worth ~$420 billion and are giant, wildly profitable businesses. Why don't they own most of Europe's telecom industry, which is mostly dominated by numerous far smaller companies? Because it doesn't work that way. You can't just go into a dozen European nations and buy up all of their telecom, the government roadblocks to doing that make it impossible. Instead, it's Softbank (Japan) that owns Sprint (#4), and it's Deutsche Telekom that owns T-Mobile that is the #3 telecom carrier in the US.
    - 9y ago
RobertRoberts 9y ago
It is apparent that there is Chinese influence on this board. Look at the commenter's history for some of the comments on China related news. This is interesting. China is known for manipulating information and spreading propaganda. I hope HN cracks down on comment manipulation related to Chinese government news stories.
- KaoruAoiShiho 9y ago
  Silicon Valley is like 30% Chinese dude. If there isn't Chinese influence that would be even more problematic.
  - dang 9y ago
    Less than 10% of the HN community is in Silicon Valley.
    - siquick 9y ago
      This surprises me. Would love to see a breakdown of where HN community are based.
      - dang 9y ago
        I looked at this a couple weeks ago. The numbers depend on how you measure 'user' and 'location'. Silicon Valley: 5% - 14%; US: 32% - 56% (including SV); Europe: 28% - 35%; Canada/Australia/New Zealand: 7% - 8%; India: 2% - 7%; China: 0.5% - 3% (including Hong Kong). From European countries, the UK is 5-8% (of the HN total), Germany is 4-7%, France is 1-3%. The Dutch and Swiss are stereotypically stable at 2% and 1% respectively. These ranges include measures like logged-in-ness. If you only look at total users then SV is less than 10%, and the US comes out less than 45%—or even as low as a third, depending on what's specifically measured.
        nkurz 9y ago
        Canada/Australia/New Zealand: 7% - 8% Is this combined for all three, or each individually? If combined, could you break it down? If individually, wow for New Zealand!
buchanaf 9y ago
Well there's one way to slow down China's economy. Nothing says first-world country like crippling student-loan debt.
- deleted 9y ago
  [deleted]
OliverJones 9y ago
Hear that "pop"? It's the student-debt-driven education bubble springing a leak and starting to deflate. Thanks, Bush 43, for your legacy in this when you "reformed" the bankruptcy laws to make it impossible to discharge student loans in bankruptcy. That set educational institutions free to raise their rates to ludicrous levels: it took away the incentive for student lenders to push back. It took away lenders' incentive to say such things as "$126,000 is too much debt for a special education teacher. She'll never be able to pay it back. We won't lend it to her to give it to you. Reduce your tuition, and cut your administrative overhead." Institutions with some cachet, like Westminster, will get rescued. Others will just collapse. This bursting bubble is going to hurt.
- matt_wulfeck 9y ago
  I don’t really understand how there can exist any debt that can’t be bankrupted, apart from federal treasuries. It may produce some desired affect in the short term, but in time creates a massive liability for everyone, not just those who took out the debt.
  - cbr 9y ago
    The standard argument for why student loan debt survives bankruptcy is that otherwise students would declare bankruptcy on graduation. At least with our current system, where bankruptcy is wiped from your record after 7 (or 10) years this would be a good move for most students.
    - mlindner 9y ago
      Right. That would have the correct feedback to properly represent what a poor investment investing in students actually is (not a good investment). This would cause interest rates for student loans to be much higher and there would be more rigor in who is allowed a loan.
      - ohyes 9y ago
        Arguably, students are a great investment, just not for money.
pure_ambition 9y ago
> "Xu Guangyu, chairman of Beijing Kaiwen... runs K-12 schools in China and said Westminster could provide the knowledge to help upgrade arts education for his students." There you have it. The Chinese company is buying the college specifically for the purpose of using their intellectual property. Is this not the same thing they have been doing buying US businesses? Purchasing the know-how that they lack to gain a competitive edge, while preventing MNCs from competing fairly in the Chinese domestic market? It's a smart strategy and seems to be working. Not fair though, and shouldn't be allowed.
- horsecaptin 9y ago
  Perhaps we shouldn't allow any foreign national to own US property when a US national can't own property in their country.
  - shanghaiaway 9y ago
    Maybe all countries should ban American citizens and corporations from owning anything outside of the US.
    - acct1771 9y ago
      That'd go a long way to making US citizens and corps more interested in development and repair of our nation. Or making them leave, not sure.
- analyst74 9y ago
  US does the same, no? Think of all the Chinese researchers, athletes and business people who immigrated to US and brought their knowledge and resources to America. In the end, the more countries and firms compete on expert knowledge, the better it is for knowledge workers.
  - adventured 9y ago
    > US does the same, no? No, the US doesn't do the same. You're comparing two very different things. Property is/can be owned, people are not and should not be. China & the US do not own their people or their brains, even if they'd like to. Both countries technically allow people to move to and work in them, from other nations. It's practically impossible to become a citizen of China as a foreigner. The US grants a million green cards per year. China almost entirely disallows outbound technology/IP/property/asset tranfers. That's the overwhelming point of contention.
JustAnotherPat 9y ago
American colleges have an anti-asian bias. I, for one, don't blame the Chinese for buying up the system so that they get decide who comes through the door now.
- tabtab 9y ago
  Re: American colleges have an anti-asian bias I don't think it's an anti-Asian bias but more of a pro-diversity bias. Colleges often want a good mix of ethnic groups such that having 60% Asians when the US population is about 8% Asian won't get them the mix they want. Whether the goal of "diversity" is more important than the "fairness" of raw merit is a complex moral and philosophical debate.
  - Consultant32452 9y ago
    After years of looking at this phenomenon your post finally made something click in my head. We've decided that birth rate is the primary measure of your merit. The more babies you have the more people that look like you we're going to allow into universities and good jobs. So weird...
    - tabtab 9y ago
      Perhaps it may end up that way in some cases, but that's not the intention. Art & Music universities often feel that diversity increases creativity, and they are in the creativity biz: the more (perceived) creativity that flows out of the U, the more they can hike tuition. Having one group heavily- or over-represented may be seen as going against that goal. It's not necessarily personal against Asians. They may not want too many whites either.
      - Consultant32452 9y ago
        But proportional to birth rate is arbitrary. If we decide there's 10 "races" why not try to force representation to be at 10% each? Wouldn't that be even better for diversity? If your race has a lower birth rate maybe we should give you a little boost by making sure you get a college education and a good job.
FLUX-YOU 9y ago
/slight-tinfoil-hat A lot of espionage recruiting goes on through academics, so I'm wondering if this isn't just a good opportunity to open avenues for spies to be sent over. That name change alone makes me immediately suspicious of this company: - From: Jiangsu Zhongtai Bridge Steel Structure Co - To: Beijing Kaiwen Education Technology Co.
- tozeur 9y ago
  I think that would really depend on the university. I doubt the Chinese government would care to plant spies in US choir societies versus let’s say sending students to Georgetown with direct recruitment feeds to Capitol Hill.
  - FLUX-YOU 9y ago
    Sure, although if you own the university (also, this is near Princeton), it probably makes the job easier. Unless Georgetown is run by the Chinese already.
- seanmcdirmid 9y ago
  This is common. Either it’s a back old listing or a failing SOE that is looking to exit the steel industry with some cheap capital.
deleted 9y ago
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apo 9y ago
Can't help but be reminded of this: The Mitsubishi Estate Company of Japan plans to walk away from its almost $2 billion investment in Rockefeller Center, the Hope diamond of world real estate. https://www.nytimes.com/1995/09/12/business/japanese-scrap-2-billion-stake-in-rockefeller.html https://www.nytimes.com/1995/09/12/business/japanese-scrap-2...
- seanmcdirmid 9y ago
  We are already seeing that happen with HNA.
  - fspeech 9y ago
    HNA seems to have made money on disposed assets so far. Maybe they are hanging onto the losers for now.
    - seanmcdirmid 9y ago
      They are about to take a huge loss on an old Park Avenue building in NYC. They made out on HK plots they sold. Heaven knows what will happen when they start unloading mainland properties.
      - fspeech 9y ago
        Interesting to see how much the NYC property will go for. I don't think the regulators are that concerned about HNA's properties in China. Domestically it is a zero sum game. Their loss would be someone else's gain, as long as solvency of the banks is not threatened.
        seanmcdirmid 9y ago
        They have to pay their loans...I think it is only a matter of time until Hainan Airlines starts having problems paying for fuel.
quickConclusion 9y ago
"Westminster is at least the fourth college site bought by Chinese interests since 2015." Pretty much one per year. Let's keep looking at it, but probably nowhere as near as foreign companies investing in China's education system.
malloreon 9y ago
This might be my favorite paragraph in a news article ever: "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." Bridge steel -> Music education. Now that's innovation!
- leereeves 9y ago
  Carnegie did it 100 years ago.
  - downrightmike 9y ago
    Now that's grade A copying!
  - adventured 9y ago
    No he didn't. Carnegie gave away his wealth. US Steel did not rename itself the US Library Corporation.
bawana 9y ago
I guess they see tuition inflation as a guaranteed revenue stream. Certainly they have experienced this firsthand as much of Asia sends their offspring for a US ‘education’.
SubiculumCode 9y ago
Letting China control American universities may give China an opportunity to influence intellectual thought about the role of China in the world, and the abuses it has committed at home. There are multiple reports about China using money and influence to limit the free speech of students [1,2], and is consistent with reports that China is heavily investing in international propaganda[3]. 1. https://www.nytimes.com/2017/11/26/opinion/beijing-free-speech-america.html https://www.nytimes.com/2017/11/26/opinion/beijing-free-spee... 2. https://www.washingtonpost.com/news/worldviews/wp/2017/05/23/a-chinese-student-praised-the-fresh-air-of-free-speech-at-a-u-s-college-then-came-the-backlash/?utm_term=.e5ce8fb234cf https://www.washingtonpost.com/news/worldviews/wp/2017/05/23... 3. https://www.bloomberg.com/news/articles/2018-03-20/xi-creates-voice-of-china-broadcaster-to-improve-global-image https://www.bloomberg.com/news/articles/2018-03-20/xi-create...
- macintux 9y ago
  I’m not sure it scares me as much as, say, the Koch brothers doing the same. http://time.com/4148838/koch-brothers-colleges-universities/ http://time.com/4148838/koch-brothers-colleges-universities/
lgleason 9y ago
Given how regressive/repressive many universities have become this is really scary. With that being said it is not entirely surprising given the amount of Chinese investment going into the us with things such as this https://www.politico.com/magazine/story/2018/01/16/how-china-infiltrated-us-classrooms-216327 https://www.politico.com/magazine/story/2018/01/16/how-china... . It is getting more brazen by having them buy our universities and is the perfect Trojan horse. As it is, our universities, which used to be institutions that valued free speech, open inquiry etc. are becoming places with strict speech codes, repression of dissenting ideas and places where due process is thrown out the window. The US education bubble needs to pop, but if it is bailed out and propped up by foreign interests (who's interests are not direct profit from the venture) there could be a lot of other negative consequences for the US beyond stealing IP. To continue to be innovative we need generations of people to be able to critically think about things, not a mass of indoctrinated people.
naveen99 9y ago
I thought most universities are non profit and essentially own themselves. I don't think they can be sold as no one owns them.
- deleted 9y ago
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watertom 9y ago
Since all Chinese companies are partially owned by the Chinese Government, and ultimately controlled by the Chinese Govrrment they all should be blocked from purchasing anything in the U.S. we would never sell anything to the Russian government, or the German govt. etc. It’s foolish to test their companies as independent from the government.
throwawaymanbot 9y ago
When china behaves itself, with its bullying and menacing methods of silencing students and those who dare criticize it in the slightest, then it should be allowed to buy things like colleges in America.
jedberg 9y ago
In the 1980s, people assumed that Japanese companies would eventually own everything in the US. You can see this in the pop culture of the time, namely in Back to the Future 2, where they go to 2015 and Marty works for a Japanese company. I have no idea if China is in a fundamentally different position than Japan was in the 80s, but just something to keep in mind when prognosticating doom and gloom about a "Chinese takeover".
- xeeeeeeeeeeenu 9y ago
  >I have no idea if China is in a fundamentally different position than Japan was in the 80s, It is. Its economy is much bigger, it is not a democracy and, most importantly, today's China is much more expansionistic than post-1945 Japan ever was.
- zumu 9y ago
  As far as Japan's position in the 80's, they were in a massive bubble through most of the decade all the way up to '91. When the bubble burst Japan was stopped dead in it's tracks. The 90's are called the 'Glacial era' or 'Lost decade' of Japanese economic development. Time will tell if China is in a bubble and if so when it will pop.
Proven 9y ago
Good, now these SJWs hellholes will become true bastions of communism.
forkLding 9y ago
I do think that for the Chinese owner, they're either very interested in music, see something we don't see, has children attending that college or is involved in a very clever money capital outflow plan as Chinese overseas investment and major currency outflow is heavily monitored and restricted by the Chinese govt: https://www.bloomberg.com/view/articles/2017-04-10/china-finally-stems-capital-outflows-now-what https://www.bloomberg.com/view/articles/2017-04-10/china-fin...

253 points by samspenc 9y ago

Westminster has a towering presence in the choral music world. At one point, the plan was to shut down the college entirely, so this purchase is definitely an improvement. It will be interesting to see how the college evolves after the acquisition.

nwatson 9y ago

Japanese companies bought into US real estate, infrastructure, corporations etc. in the 90s then had to relinquish much of it at cut rate prices. Same will happen here I imagine.

HumanDrivenDev 9y ago
China faces even more serious problems that Japan did at the time. Much of the country still lives in poverty and there's no social safety net.
- qaq 9y ago
  Fortunately US has a very developed social safety net.

hangonhn 9y ago

"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." I think that sentence provides some insight into the deal. As China becomes wealthier, their aspirations will be elevated as well. There's a lucrative opportunity here where the prestige of an American institution can be used to attract family who have the means and aspirations for their children to be acquainted with cultures and arts other than the ones they are born into. It's kind of funny to hear people complain about a former steel company taking an interest in music education given the prestige that Carnegie Hall holds in American culture.

deleted 9y ago
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erikb 9y ago
Even without these institutions arts universities of all kinds are overflowing with children from Chinese rich families. It's already a huge, wealthy market. It's just not as funny as a Chinese math genius, so fewer people outside these schools talk about it.
- GuiA 9y ago
  Yes, this is important to realize. I work in a fairly reputable design studio, and we take in interns every year. This year, all of our applicants were Asian students from overseas (mostly PRC) attending art/design schools in the US. In many cases, they do seem to come from wealthy backgrounds (eg went to private high schools abroad, etc). That was definitely not the case 5 years ago. The only ones who can attend art school anymore are kids coming from very wealthy backgrounds.
smilekzs 9y ago
> Xu Guangyu, chairman of Beijing Kaiwen and a choral singer in college... > Westminster’s odd couple may not be such a mismatch, given Xu’s background as a choral singer at Peking University. In the early 1980s, his high-school music teacher in Beijing took students to performances of operas “Carmen” and “Madama Butterfly,” and the ballet “Swan Lake,” he said. At the very least the buyer does appreciate the art involved.
- Johnny555 9y ago
  Or, at least he claims to have that appreciation to get the sale done.
  - mazerackham 9y ago
    seems like we could give him the benefit of the doubt in this case, no?

RobertRoberts 9y ago

An idea, any foreign country that forbids buying land in their country [0] is not allowed to buy land in our country. Sound equal? [0] "Foreign investors are not allowed to buy land in China. The land in China belongs to the state and the collectives." https://en.wikipedia.org/wiki/Chinese_property_law#Buying_land https://en.wikipedia.org/wiki/Chinese_property_law#Buying_la... Edit: I think it's reasonable to leverage our freedom as an asset instead of a liability to be abused. Edit: Replaced "fair" with "equal"

rgbrenner 9y ago
Chinese can't buy chinese land. They only get the right to use the land. Land-use rights can be bought by foreign investors for some projects.
- seanmcdirmid 9y ago
  And they might even be granted as an incentive....
- HumanDrivenDev 9y ago
  That's not the rest of the worlds problem. If they want to buy other peoples land, then other people should be able to buy theres. They're taking advantage of us.
  - ghaff 9y ago
    Except in a small number of locations, the US doesn’t exactly have a land shortage. Nor a particular shortage of small liberal arts schools with sketchy financial situations.
- pascalxus 9y ago
  Yes, but for the right to use that house or condo, they don't need to pay property taxes, whereas most of the rest of the world you have to pay rent (property taxes) to the government. If you have to pay vast sums of rent to keep it, do you really own it?

jermaustin1 9y ago

Are these colleges accredited? And if so, will they still be accredited and reviewed just as they were when they were wholly owned by the University? It smells weird that a foreign state-owned company wants to buys a US college. Maybe they want the land, or maybe its all about that tuition money. The China sees that we Americans are stupid enough to pay $30-40k per year to go to a private music college, and they want a cut of that.

lainga 9y ago
It is a safe haven for capital, too - see the comment below about the 1980s Japanese property bubble.
pzh 9y ago
Or most likely, they do it for the real or perceived immigration benefits. An accredited educational institution in the US can issue F-1 student visas, and these can be converted to OPT, H-1B, Greencard, and ultimately a US Citizenship. That's probably what would attract wealthy families to send their kids to an unknown no-brand college that is clearly owned by a Chinese company.

mark-r 9y ago

How is it possible that any colleges are cash-strapped with the tuition they are charging these days? It boggles my mind - they must be incredibly mismanaged.

dv_dt 9y ago
I haven't seen any reports, but my impression is that many universities have cut loose many permanent professors, hiring masses of part time, super low wage adjuncts. At the same time gold-plated administration and facilities costs have increased much faster than inflation along with textbooks and tuitions. It's a massive devaluing of the actual education with super-inflation on the trappings of education.
- sli 9y ago
  Literally describes my last uni to a T, it was a new state uni. I left before finishing my degree because all the good professors left after their first year, leaving some very blatantly unqualified professors behind. Most (but not all) of the replacements are adjuncts. Also, I got a job in my field, which made it easier to leave. My favorite example to give to explain their hiring problem is the professor of a webapp development class, a computer science professor, who was completely dumbfounded by ES6 syntax and closures and taught straight from the W3 Schools website. Literally came into class, plugged in his laptop, opened W3 Schools and started reading. I ended up tutoring a lot of people for that class, and typically had to dispute all my test grades by proving that my (handwritten -- he was that type) code worked. That is to say, he was simply not qualified to teach that class. Not even close. We didn't even get anywhere near finishing all the material, we never even wrote a single webapp in that class. We didn't even get close to that point. However, the building is gorgeous. And also sunk so far in the first year that they had to bolster their drainage considerably. This is Florida, by the way. Rain is a way of life here, and they didn't plan for it. After the recent hurricane, the building was damaged, but they can't do a whole lot to fix it because the architect owns a copyright on the building. It's a damn shame that if the damaged parts fail, it will be a huge disaster because directly under them is the glass-filled roof over the student commons. Feel free to guess the school if you like, it should be easy. But I have nothing more to add. E: Wait, I do have one more thing to add. I worked in a lab with grad students, ostensibly as a tech but since I was already experienced with the stuff we were doing (mostly development), I was instead tasked with real R&D. Except all of my work just ended up on a table to be used as a marketing tool during the ten tours that stopped to gawk at us every day. None of it ever went anywhere. And now that lab is going unused. So basically all that money just went completely wasted.

thathappened 9y ago

I wonder if this is their answer to their absurd requirements to get into American Universities

hguhghuff 9y ago

I wonder what it might mean if extrapolated into China eventually buying the lions share of houses, farms, companies, infrastructure, educational institutions.. What would be the outcome? It’s sort of weird that such buyup isn’t seen as a national security issue.

xkcd-sucks 9y ago
It is in Australia, where food supply is the hot commodity for foreign investment
wolco 9y ago
The outcome would be higher land taxes.
kuschku 9y ago
Americans bought the lions share of farms, companies, infrastructure in Europe in the past 70 years. Now it’s gonna be China. It’s too profitable to worry about it, and just like we sold out to the Americans, they’ll now sell out to China, as the circle continues.
- adventured 9y ago
  The US acquired practically zero infrastructure in Europe over the last 70 years and practically zero of Europe's farming output. Europe as a whole is notoriously protective of its farming, both in terms of ownership and tariff protection. Trains/rail, bus systems, power generation, power distribution, telecom - US companies own an extroardinarily tiny share of those things in Europe overall. Verizon + AT&T are worth ~$420 billion and are giant, wildly profitable businesses. Why don't they own most of Europe's telecom industry, which is mostly dominated by numerous far smaller companies? Because it doesn't work that way. You can't just go into a dozen European nations and buy up all of their telecom, the government roadblocks to doing that make it impossible. Instead, it's Softbank (Japan) that owns Sprint (#4), and it's Deutsche Telekom that owns T-Mobile that is the #3 telecom carrier in the US.
  - 9y ago

RobertRoberts 9y ago

It is apparent that there is Chinese influence on this board. Look at the commenter's history for some of the comments on China related news. This is interesting. China is known for manipulating information and spreading propaganda. I hope HN cracks down on comment manipulation related to Chinese government news stories.

KaoruAoiShiho 9y ago
Silicon Valley is like 30% Chinese dude. If there isn't Chinese influence that would be even more problematic.
- dang 9y ago
  Less than 10% of the HN community is in Silicon Valley.
  - siquick 9y ago
    This surprises me. Would love to see a breakdown of where HN community are based.
    - dang 9y ago
      I looked at this a couple weeks ago. The numbers depend on how you measure 'user' and 'location'. Silicon Valley: 5% - 14%; US: 32% - 56% (including SV); Europe: 28% - 35%; Canada/Australia/New Zealand: 7% - 8%; India: 2% - 7%; China: 0.5% - 3% (including Hong Kong). From European countries, the UK is 5-8% (of the HN total), Germany is 4-7%, France is 1-3%. The Dutch and Swiss are stereotypically stable at 2% and 1% respectively. These ranges include measures like logged-in-ness. If you only look at total users then SV is less than 10%, and the US comes out less than 45%—or even as low as a third, depending on what's specifically measured.
      - nkurz 9y ago
        Canada/Australia/New Zealand: 7% - 8% Is this combined for all three, or each individually? If combined, could you break it down? If individually, wow for New Zealand!

buchanaf 9y ago

Well there's one way to slow down China's economy. Nothing says first-world country like crippling student-loan debt.

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OliverJones 9y ago

Hear that "pop"? It's the student-debt-driven education bubble springing a leak and starting to deflate. Thanks, Bush 43, for your legacy in this when you "reformed" the bankruptcy laws to make it impossible to discharge student loans in bankruptcy. That set educational institutions free to raise their rates to ludicrous levels: it took away the incentive for student lenders to push back. It took away lenders' incentive to say such things as "$126,000 is too much debt for a special education teacher. She'll never be able to pay it back. We won't lend it to her to give it to you. Reduce your tuition, and cut your administrative overhead." Institutions with some cachet, like Westminster, will get rescued. Others will just collapse. This bursting bubble is going to hurt.

matt_wulfeck 9y ago
I don’t really understand how there can exist any debt that can’t be bankrupted, apart from federal treasuries. It may produce some desired affect in the short term, but in time creates a massive liability for everyone, not just those who took out the debt.
- cbr 9y ago
  The standard argument for why student loan debt survives bankruptcy is that otherwise students would declare bankruptcy on graduation. At least with our current system, where bankruptcy is wiped from your record after 7 (or 10) years this would be a good move for most students.
  - mlindner 9y ago
    Right. That would have the correct feedback to properly represent what a poor investment investing in students actually is (not a good investment). This would cause interest rates for student loans to be much higher and there would be more rigor in who is allowed a loan.
    - ohyes 9y ago
      Arguably, students are a great investment, just not for money.

pure_ambition 9y ago

> "Xu Guangyu, chairman of Beijing Kaiwen... runs K-12 schools in China and said Westminster could provide the knowledge to help upgrade arts education for his students." There you have it. The Chinese company is buying the college specifically for the purpose of using their intellectual property. Is this not the same thing they have been doing buying US businesses? Purchasing the know-how that they lack to gain a competitive edge, while preventing MNCs from competing fairly in the Chinese domestic market? It's a smart strategy and seems to be working. Not fair though, and shouldn't be allowed.

horsecaptin 9y ago
Perhaps we shouldn't allow any foreign national to own US property when a US national can't own property in their country.
- shanghaiaway 9y ago
  Maybe all countries should ban American citizens and corporations from owning anything outside of the US.
  - acct1771 9y ago
    That'd go a long way to making US citizens and corps more interested in development and repair of our nation. Or making them leave, not sure.
analyst74 9y ago
US does the same, no? Think of all the Chinese researchers, athletes and business people who immigrated to US and brought their knowledge and resources to America. In the end, the more countries and firms compete on expert knowledge, the better it is for knowledge workers.
- adventured 9y ago
  > US does the same, no? No, the US doesn't do the same. You're comparing two very different things. Property is/can be owned, people are not and should not be. China & the US do not own their people or their brains, even if they'd like to. Both countries technically allow people to move to and work in them, from other nations. It's practically impossible to become a citizen of China as a foreigner. The US grants a million green cards per year. China almost entirely disallows outbound technology/IP/property/asset tranfers. That's the overwhelming point of contention.

JustAnotherPat 9y ago

American colleges have an anti-asian bias. I, for one, don't blame the Chinese for buying up the system so that they get decide who comes through the door now.

tabtab 9y ago
Re: American colleges have an anti-asian bias I don't think it's an anti-Asian bias but more of a pro-diversity bias. Colleges often want a good mix of ethnic groups such that having 60% Asians when the US population is about 8% Asian won't get them the mix they want. Whether the goal of "diversity" is more important than the "fairness" of raw merit is a complex moral and philosophical debate.
- Consultant32452 9y ago
  After years of looking at this phenomenon your post finally made something click in my head. We've decided that birth rate is the primary measure of your merit. The more babies you have the more people that look like you we're going to allow into universities and good jobs. So weird...
  - tabtab 9y ago
    Perhaps it may end up that way in some cases, but that's not the intention. Art & Music universities often feel that diversity increases creativity, and they are in the creativity biz: the more (perceived) creativity that flows out of the U, the more they can hike tuition. Having one group heavily- or over-represented may be seen as going against that goal. It's not necessarily personal against Asians. They may not want too many whites either.
    - Consultant32452 9y ago
      But proportional to birth rate is arbitrary. If we decide there's 10 "races" why not try to force representation to be at 10% each? Wouldn't that be even better for diversity? If your race has a lower birth rate maybe we should give you a little boost by making sure you get a college education and a good job.

FLUX-YOU 9y ago

/slight-tinfoil-hat A lot of espionage recruiting goes on through academics, so I'm wondering if this isn't just a good opportunity to open avenues for spies to be sent over. That name change alone makes me immediately suspicious of this company: - From: Jiangsu Zhongtai Bridge Steel Structure Co - To: Beijing Kaiwen Education Technology Co.

tozeur 9y ago
I think that would really depend on the university. I doubt the Chinese government would care to plant spies in US choir societies versus let’s say sending students to Georgetown with direct recruitment feeds to Capitol Hill.
- FLUX-YOU 9y ago
  Sure, although if you own the university (also, this is near Princeton), it probably makes the job easier. Unless Georgetown is run by the Chinese already.
seanmcdirmid 9y ago
This is common. Either it’s a back old listing or a failing SOE that is looking to exit the steel industry with some cheap capital.

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apo 9y ago

Can't help but be reminded of this: The Mitsubishi Estate Company of Japan plans to walk away from its almost $2 billion investment in Rockefeller Center, the Hope diamond of world real estate. https://www.nytimes.com/1995/09/12/business/japanese-scrap-2-billion-stake-in-rockefeller.html https://www.nytimes.com/1995/09/12/business/japanese-scrap-2...

seanmcdirmid 9y ago
We are already seeing that happen with HNA.
- fspeech 9y ago
  HNA seems to have made money on disposed assets so far. Maybe they are hanging onto the losers for now.
  - seanmcdirmid 9y ago
    They are about to take a huge loss on an old Park Avenue building in NYC. They made out on HK plots they sold. Heaven knows what will happen when they start unloading mainland properties.
    - fspeech 9y ago
      Interesting to see how much the NYC property will go for. I don't think the regulators are that concerned about HNA's properties in China. Domestically it is a zero sum game. Their loss would be someone else's gain, as long as solvency of the banks is not threatened.
      - seanmcdirmid 9y ago
        They have to pay their loans...I think it is only a matter of time until Hainan Airlines starts having problems paying for fuel.

quickConclusion 9y ago

"Westminster is at least the fourth college site bought by Chinese interests since 2015." Pretty much one per year. Let's keep looking at it, but probably nowhere as near as foreign companies investing in China's education system.

malloreon 9y ago

This might be my favorite paragraph in a news article ever: "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." Bridge steel -> Music education. Now that's innovation!

leereeves 9y ago
Carnegie did it 100 years ago.
- downrightmike 9y ago
  Now that's grade A copying!
- adventured 9y ago
  No he didn't. Carnegie gave away his wealth. US Steel did not rename itself the US Library Corporation.

bawana 9y ago

I guess they see tuition inflation as a guaranteed revenue stream. Certainly they have experienced this firsthand as much of Asia sends their offspring for a US ‘education’.

SubiculumCode 9y ago

Letting China control American universities may give China an opportunity to influence intellectual thought about the role of China in the world, and the abuses it has committed at home. There are multiple reports about China using money and influence to limit the free speech of students [1,2], and is consistent with reports that China is heavily investing in international propaganda[3]. 1. https://www.nytimes.com/2017/11/26/opinion/beijing-free-speech-america.html https://www.nytimes.com/2017/11/26/opinion/beijing-free-spee... 2. https://www.washingtonpost.com/news/worldviews/wp/2017/05/23/a-chinese-student-praised-the-fresh-air-of-free-speech-at-a-u-s-college-then-came-the-backlash/?utm_term=.e5ce8fb234cf https://www.washingtonpost.com/news/worldviews/wp/2017/05/23... 3. https://www.bloomberg.com/news/articles/2018-03-20/xi-creates-voice-of-china-broadcaster-to-improve-global-image https://www.bloomberg.com/news/articles/2018-03-20/xi-create...

macintux 9y ago
I’m not sure it scares me as much as, say, the Koch brothers doing the same. http://time.com/4148838/koch-brothers-colleges-universities/ http://time.com/4148838/koch-brothers-colleges-universities/

lgleason 9y ago

Given how regressive/repressive many universities have become this is really scary. With that being said it is not entirely surprising given the amount of Chinese investment going into the us with things such as this https://www.politico.com/magazine/story/2018/01/16/how-china-infiltrated-us-classrooms-216327 https://www.politico.com/magazine/story/2018/01/16/how-china... . It is getting more brazen by having them buy our universities and is the perfect Trojan horse. As it is, our universities, which used to be institutions that valued free speech, open inquiry etc. are becoming places with strict speech codes, repression of dissenting ideas and places where due process is thrown out the window. The US education bubble needs to pop, but if it is bailed out and propped up by foreign interests (who's interests are not direct profit from the venture) there could be a lot of other negative consequences for the US beyond stealing IP. To continue to be innovative we need generations of people to be able to critically think about things, not a mass of indoctrinated people.

naveen99 9y ago

I thought most universities are non profit and essentially own themselves. I don't think they can be sold as no one owns them.

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watertom 9y ago

Since all Chinese companies are partially owned by the Chinese Government, and ultimately controlled by the Chinese Govrrment they all should be blocked from purchasing anything in the U.S. we would never sell anything to the Russian government, or the German govt. etc. It’s foolish to test their companies as independent from the government.

throwawaymanbot 9y ago

When china behaves itself, with its bullying and menacing methods of silencing students and those who dare criticize it in the slightest, then it should be allowed to buy things like colleges in America.

jedberg 9y ago

In the 1980s, people assumed that Japanese companies would eventually own everything in the US. You can see this in the pop culture of the time, namely in Back to the Future 2, where they go to 2015 and Marty works for a Japanese company. I have no idea if China is in a fundamentally different position than Japan was in the 80s, but just something to keep in mind when prognosticating doom and gloom about a "Chinese takeover".

xeeeeeeeeeeenu 9y ago
>I have no idea if China is in a fundamentally different position than Japan was in the 80s, It is. Its economy is much bigger, it is not a democracy and, most importantly, today's China is much more expansionistic than post-1945 Japan ever was.
zumu 9y ago
As far as Japan's position in the 80's, they were in a massive bubble through most of the decade all the way up to '91. When the bubble burst Japan was stopped dead in it's tracks. The 90's are called the 'Glacial era' or 'Lost decade' of Japanese economic development. Time will tell if China is in a bubble and if so when it will pop.

Proven 9y ago

Good, now these SJWs hellholes will become true bastions of communism.

forkLding 9y ago

I do think that for the Chinese owner, they're either very interested in music, see something we don't see, has children attending that college or is involved in a very clever money capital outflow plan as Chinese overseas investment and major currency outflow is heavily monitored and restricted by the Chinese govt: https://www.bloomberg.com/view/articles/2017-04-10/china-finally-stems-capital-outflows-now-what https://www.bloomberg.com/view/articles/2017-04-10/china-fin...