Volume 1 Number 1 February 2015

Eastern Digest

Canadian Journal of Chinese and Asian Research

ISSN 2368-7231 (Print)

ISSN 2368-724X (Online)

Canadian Journal for Chinese and Asian Research

Editorial Board

Cameron Batmanghlich, PhD, Instituto de Estudios

Superiores Spenta, Mexico. Leadership and

Management, CSR and Philosophy of Management

Gordon Betcherman, PhD, University of Ottawa,

Labour Economics

Alan Chan, PhD, Crandall University, Economic

Modeling, Game Theory

Sue Calhoun, MBA, Calhoun Research &

Development/Recherche et Développement

Seth Crowell, PhD, Crandall University, Sociology

and Psychology

Pierre Marcel Desjardins, PhD, University of

Moncton, Regional Economics

Izold Guihur, DBA, ing., University of Moncton,

Entrepreneurship, Innovation

Dieu Hack-Polay, PhD, Xian Jiaotong Liverpool

University, Organizational Studies and Sociology

Etienne Philippe, MA, China Agriculture University,

Economics

Petrel Qiu, MSc, ICAR Language and Culture,

Management

Ron Schramm, PhD, Xian Jiaotong Liverpool

University, Economics

Tai Chunming, PhD, Education Theory and Policy

Madhu Verma, Asian Heritage Society of NB,

Immigration Policy

Lee Williams, MA, Shanghai QiBao Dwight H.S.,

Education, Cross-Cultural studies

J.R. Gilhooly - Editor/Managing Editor

research@icar-inst.com

© 2015 ICAR

Institute for Chinese and Asian Research

304 Mountain Rd., Moncton, NB,

Canada, E1C 2M1

ISSN 2368-7231 (Print)

ISSN 2368-724X (Online)

1

Eastern Digest

Aims

ICAR was established to serve the research community and business professionals. The Institute is publishing

the Eastern Digest to provide an overview of topical economic and social issues relating to China and Asia.

Eastern Digest provides a refereed/peer reviewed forum for scholarly and practice-based discussions about

contemporary Asian issues.

Volume 1 Number 1 February 2015

CONTENTS

Editorial

2

Research Articles

Transnational Higher Education (TNE) in China: Geographic Distribution, Anomalies, and Models of Operation

Yuen Ying Chan and Arielle S. Emmett

3

Who wants to go to work? An empirical analysis examining full time weeks of work among Canadians

Alan Chan

27

Business Analyses

Living and Working in China: One Person’s Experience

Scott M. Wheelwright

37

Doing Business in Foreign Countries

Klaus Steven

41

Call for Papers

44

2

Editorial

Welcome to the first issue of Eastern Digest! This is a new peer-reviewed journal publishing scholarly research on China

and Asia. Eastern Digest is an online and print, multidisciplinary, peer reviewed journal about economic and policy issues

affecting business conditions and their differences between Asia and the West.

Our aim for the Eastern Digest is to provide a new forum for discussion about international business related issues

involving the interactions between Asia and the rest of the world. This aligns with the objectives of the Institute for

Chinese and Asian Research (ICAR) which houses the journal. In the past three decades Asia as a whole and East Asia

(with the exception of Japan, a long standing economic power) has been thriving technologically, economically and

politically. In the past ten years or so both the West [including North America and the European Union] and the

developing world have been looking to Asia for a revival of their own economies or to steer fresh investment. Eastern

Digest takes the view that such significant modern influence needs acknowledgement and research in many forums.

Eastern Digest is one such forum. It is open to contributions from any part of the world in either English, French or

Mandarin. The journal would like to engage particularly scholars and the business community.

Our first issue has articles from Dr. Alan Chan and Prof. Yuen Ying Chan with her colleague Dr. Arielle Emmett. In the first

article Prof. Yuen Ying Chan and Dr. Arielle Emmett assess the performance of joint ventures between overseas and

local institutions in Chinese higher education. The second article by Dr. Alan Chan counters the commonplace view that

people living in the Maritime provinces are more work averse than other Canadians. In addition to scholarly articles

Eastern Digest provides business profiles or analyses of people and companies with direct experience of the Asian

market and society. The back pages of this issue are concerned with the experiences of operating American/European

businesses in China.

The next issue is open for submissions and particularly encourages contributions from the Atlantic Canada region, China

and India though all submissions will be considered. The Editorial Board also welcomes your feedback on the first issue.

We give a special thanks to our first authors. We hope their example inspires contributions from researchers, scholars

and business leaders globally.

J.R. Gilhooly

Editor

3

Research Articles

Transnational Higher Education (TNE) in China:

Geographic Distribution, Anomalies, and Models of Operation

Yuen Ying Chan*

Arielle S. Emmett**

Abstract

Despite censorship and tightening government regulation, Sino-international cooperative education programs§ are growing steadily in China. Often considered a “third pillar under construction” in Chinese higher education (Feng & Gong, 2006), transnational programs face special challenges because open discourse can thrive only in an information-rich environment. A critical issue for Western institutions is how to produce successful transnational education (TNE) without sacrificing free speech. In addition, transnational administrators must cope with differences in Chinese university structure and Communist Party mission, often resulting in conflicts regarding program control, profit distribution, and teaching practices.

This study provides the first quantitative overview of transnational cooperative activities in China, part of a series of studies we plan in order to explore educational and cultural trends, along with labor skills and financial impacts of TNE training in China. Our planned research will include a separate assessment of transnational journalism, communication, and humanities programs in China, in which debate and discussions regarding free speech and CCP restrictions to information are most likely to arise.

Analyzing data from the Ministry of Education (MOE), cooperative program websites, and direct inquiries to program admissions officers, we identify patterns in the origins and nature of foreign partner institutions, hosting provinces, majors and models of study, and degrees awarded. Further, as the first comprehensive mapping of Sino-international programs, we have identified anomalies in TNE distribution not reported in the literature; for example, the highest number of programs is in Heilongjiang, a less developed province in Northeast, while industrialized Guangdong, paradoxically, hosts only 2.4% of China’s TNE. Our data also suggest that cooperative programs cluster on the populous East Coast, raising questions of how China will offer equal opportunities for international education in less populated provinces.

Keywords

Keywords: Transnational Education; Sino-international cooperative education; Ministry of Education; Chinese educational partnerships; Chinese home-rule; censorship.

§Note, in this paper we have chosen the expression “Sino-international cooperative education programs,” although the Chinese frequently use the expression, “Sino-foreign cooperative education programs” to designate TNE.

*Founding Director of the Journalism & Media Studies Centre, University of Hong Kong

**Fulbright Specialist, Universitas Padjadjaran, Indonesia

4

1. Introduction Even with censorship and tightening government regulation, Sino-international cooperative programs in higher education are growing steadily. These programs, often characterized as a “third pillar under construction” in the China higher education system (Feng & Gong, 2006), face special challenges because international education initiatives can thrive only in an information-rich environment. A critical issue within academe is how to manage Internet censorship and Chinese restrictions on open classroom discussion and publication of controversial ideas. In addition, transnational programs must cope with structural differences in the mission and organization of Chinese universities as opposed to Western ones. Such constraints led us from a specific inquiry into transnational journalism education to a broader survey assessment of transnational education (TNE) in China as a whole.

Based on recent data retrieved from China’s Ministry of Education website along with the websites and published data available from each transnational program, this survey seeks to determine patterns of Sino-international partnership – specifically, the distribution and structure of programs by region and affiliation with foreign partner institutions. A secondary goal is to identify anomalies in the distribution and types of TNE programs throughout China. Based on our survey assessment, we will seek to develop a theory for these findings in future papers.

China’s Ministry of Education has endorsed the TNE concept primarily for building academic capacity (i.e., initiating new collaborative teaching and research programs), modernizing academic standards through knowledge transfer from foreign institutions, along with plugging “skills gaps” among students who will soon participate in China’s advancing economy (The British Council, 2013). However our data also suggest that economic motives play an important role in many joint programs. Although China’s regulatory framework specifically prohibits profit generation as a main motivation for TNE (The British Council, 2013), a large number of cooperative Sino-international programs in China have run on for-profit models, with foreign institutions benefitting from undergraduate 2+2 or 3+1 programs where in-country TNE students are sent to the foreign institution for their final years of study (Emmett, 2011). In addition to profit, both Chinese and Western institutions add a prestige quotient when they decide to cooperate on joint educational ventures. Despite the early exhilaration and desire to break boundaries, Western and even Chinese faculty have frequently reported roadblocks to free educational exchange, where strict controls on Internet access and other forms of information continue in effect (Daly, personal communication, 25 March, 2013; Emmett, 2011; Farrar, 2012; Nix, 2009; Staley & Golden, 2011; Sleeper, 2013).

Previous studies on Sino-international cooperation in higher education (referred to as “transnational higher education,” [UNESCO, 2001]) have focused on MOE policies and regulation documents, reasoning and philosophy of TNE, and histories of specific Sino-international cooperative projects. (Hou, Zhao, Zhou, & Li, 2010; Li, Faulkner, & Yan, 2011; Mok & Xu, 2008). Recent announcements have outlined moves by the Chinese Ministry of Education (MOE) to tighten regulation and government certification of TNE programs granting degrees to Chinese university students (Sino-foreign educational programs face check up, 2011) [Note 1] Other studies and on-the-ground reports outline challenges to academic freedom that foreign universities face (Sleeper, 2013). Among these challenges are government red tape, culture and language difference, infrastructure start-up costs, censorship, and China’s claim to home rule sovereignty and regulation (Helms, 2008; Pan, 2009; Nix, 2009; Emmett, 2011). In some cases, cooperative ventures have proved unpopular, especially those in which a western academic institution invests heavily in a brand-new China campus along with imports of high-prestige faculty (Daly, personal communication, 25 March 2013). New York University’s launch of a satellite campus in Shanghai, for example, met with severe criticism at home for “defining down expectations for a liberal education, much the way corporations do when they look the

5

other way at shoddy labor and environmental practices abroad” (Sleeper, 2013).

This study aims to provide the first quantitative overview of current transnational cooperative activities in China. Our data identify significant patterns in the origins of foreign partner institutions, hosting provinces and areas of study. This analysis also explores various types of Sino-international cooperation and operation models, including the structure of the cooperative venture, degrees awarded, tuition arrangements and language use.

The statistical distribution and types of programs available today suggest that TNE in China is not all about cross-cultural education or equal opportunity across all provinces:

1) In China, a primary motive of transnational education appears to be extending “soft power,” symbolically and for propaganda purposes, by opening doors to both Chinese and international students and encouraging Western investment in prestigious joint ventures (Daly, personal communication, 25 March, 2013; Nix, 2009, Emmett, 2011). These ventures are disproportionately available only in the most populous and developed Chinese East Coast cities; other provinces to the West and South have very few TNE programs.

2) Because China’s ‘home rule’ sovereignty is so carefully enforced through law, regulation, and tight fiscal control of university activities (Table 1), TNE does not, in most instances, emulate the “open” Western university and its free exchange of ideas. Rather, these programs are designed to legitimize Chinese institutional and cultural power while giving native students training in desirable Western technologies and languages (Daly, 2013; Helms, 2008, Pan 2009; Staley & Golden, 2013; Sleeper, 2013).

3) By contrast, Western motives for entering into TNE agreements, most of which are heavily “stacked” toward Chinese administrative and fiscal advantage, are principally to open a conduit for international student revenue. A TNE program establishes a foothold in the country and gives Western universities access both to Chinese students and their ability to pay high tuition rates. At this stage cash-strapped US public universities count on international student enrollment to make up more than $20 billion in revenue shortfalls (Emmett, 2011; Nix 2009).

2. Historical Perspectives and Literature Review

UNESCO and the Council of Europe in the “Code of Practice on Transnational Education” (2001) defined transnational education as “types and modes” of delivering course content (up to whole programs) or services (such as distance education) in which the learners are located in a country different from the one awarding the degree or certificate. The Global Alliance for Transnational Education (GATE) classifies transnational higher education into different forms – branch campus, franchise, articulation, twinning, corporate program, online learning and distance education programs (Huang, 2007; Mok & Xu, 2008). Helms (2008) states that successful transnational higher education programs increase the educational opportunities in host countries, facilitate knowledge exchange, and build cross-cultural understanding and communication.

In November 2001, China joined the World Trade Organization (WTO) after 15 years of intensive and at times combative negotiations. The new international status served as a direct impetus to the higher education system to become more internationalized and competitive (Gide, Wu, & Wang, 2010; Huang, 2006, 2007; Lin & Liu, 2009; Mok & Xu, 2008; Yang, 2008). As a result, Sino-international cooperation in higher education has since become an important element in China’s effort to internationalize its higher education system (Li, 2009).

Today, transnational education programs in China approved by the government exceed 1000 programs and institutions, the majority of which are in higher education (Yuan Z, 2010, as cited in Fang, 2011). China

6

boosted its 18 to 22 year-old post secondary enrollments from 4 percent to 22 percent in less than 15 years, according to the Ministry of Education (MOE). The country also plans to invite 100,000 American students to study in Chinese universities and specialty programs within the next four years, and at least 500,000 foreign students by 2020 (Emmett, 2011). In the US, the international student industry now contributes roughly US$ 20 billion a year to the domestic economy. China has surpassed India for student placement in American universities, with enrollments in U.S. programs increasing 30 percent in the 2009 to 2010 academic year alone (Emmett, 2011). The total number of Chinese students enrolled in U.S. colleges and universities increased by 21 percent in the 2012-2013 school year to almost 235,000 students. That number jumped to 26 percent at the undergraduate level (Institute of International Education, Open Doors 2013).

Chinese universities are seeking Western-style classroom pedagogies to replace or complement traditional “examination” models that stress rote learning over open exchange between learners and teachers (Li & Li 2010; Li, S.X., 2012). China is also eager to develop international perspectives among students (Dong, 2008; Enew & Yang, 2008; Lin & Liu, 2007), many of whom go abroad to complete their training with the expectations of returning to China in fast-track leadership roles (Cheng Li, 2004; Pan 2009). The country is introducing quality Western educational resources to improve local educational curriculum (Zheng, 2008). Yet the Chinese government has imposed restrictions on Western-style educational imports, including cross-border on-line education and access to an open Internet and Western social media (Pan, 2009). Both the Ministry of Education and defenders of China’s educational system stress the need for maintaining “national education sovereignty” in all dealings with foreign academic institutions (Pan 2009). Maintenance of sovereignty has resulted in careful monitoring of Western-style ideologies, along with insistence that China maintain its home-rule advantage. [Note 2][Note 3] According to Robert Daly, Director of the University of Maryland China Initiative:

Most of the specific problems [in transnational education] stem from an overarching problem. Universities, no matter how well intentioned, enter into these transnational agreements based on a false analogy. The premise is that Chinese universities are the same universities in the sense that American universities are universities. Structurally they look analogous to American universities; but in terms of missions, management, and governance, Chinese universities are the last bastions of the old iron rice bowl…run by the [Communist] Party, and their performance expectations must meet Party goals…Nobody wants to accept or say it. But you can’t buy your way out of this problem (R.D. personal communication, 25 March, 2013).

3. Economic Perspective and TNE

The current goal of importing higher education is essentially a reversal of earlier emphasis on political education for class struggle (Hayhoe, 1989; Nix, 2009). After the opening of China and its schools to reforms in 1978, education was revamped with the goal of achieving rapid economic expansion through “the four Modernizations” (agriculture, industry, science and technology, national defense). Education hence became a tool to enhance public welfare and facilitate economic change and marketization (Ministry of Education, 2003, Jiao Wai Zong, 2006; Nix 2009).

By December 2002, transnational ventures in education had surged. More than 650 cooperative institutions had been established in China; the state council or Ministry of Education approved 95 of them to confer academic degrees (Pan, 2009). Foreign institutions authorized masters of business administration degree programs in 26 Chinese universities; and several Chinese-European and China-US joint programs were set up along with dozens of vocational cooperative programs with foreign institutions.

7

By 2003, the influx of foreign programs had become so explosive and, in some instances, unmanageable that China’s State Council passed new regulations governing Sino-international cooperative educational institutional (SFCEIs) investments (Yu, 2003). These new regulations gave foreign institutions some expanded rights to invest in infrastructure and engage in the Chinese educational service marketplace. However, a shortfall was that regulations failed to designate SFCEIs as “for profit” entities, leaving the question of profit transfer and distribution open-ended for legal challenge later on (Yu, 2003).

In recent years, with the passing of Project 985 and Project 211, China has stratified universities into those devoted principally to teaching and those focused on research (Fang 2011). Wenhong Fang (2011) found that for teaching universities, transnational education’s main goal is to increase enrollments, generate revenue, and reduce costs. But for top research universities, the major function is to provide more academic opportunities for those seeking advanced professional degrees (Fang, 2011). TNE “glocal” training provides a stepping stone for Chinese students who participate in intensive Western academic training at home in preparation for advanced study abroad.

4. Research Questions

Sino-international cooperative programs will soon form a third pillar in China’s higher education system (Feng & Gong, 2006). However, current literature points to important discrepancies of opportunity, geographic availability, and quality/oversight of TNE programs [Note 4]. The paucity of nationalized data on TNE, however, leads us to formulate these initial research questions:

RQ1: How do Chinese government directives encourage foreign university investment in TNE while maintaining local institutional control?

RQ2: Are TNE programs distributed evenly across China’s multiple provinces, or are they concentrated in coastal and high-population areas?

RQ3: Are foreign public universities and community colleges participating most heavily in Chinese TNE, or are foreign private colleges and institutions?

RQ4: Which TNE operational models and degree programs best serve the needs of Chinese students?

To clarify research findings, the paper is organized into five major sections below.

The first section provides summaries of our data collection methodology. The second offers a table and explanation of relevant governing Chinese laws and regulations, along with the Chinese government’s rationale for operating these programs. The third provides data on the leading source countries and host provinces, type of partner institutions, the most commonly offered levels of study and subject areas. The fourth section explores various TNE cooperation and operation models, including modes of collaboration, degrees awarded, tuition arrangements and language use. The concluding section identifies critical issues resulting from the earlier sections that require further study.

5. Methodology

To gain an overview of the status of Sino-international cooperation, this study analyzed data retrieved from the Ministry of Education (MOE) website providing information about each TNE program’s leading source countries and host provinces, degrees awarded, and the most commonly offered levels of study and subject areas. However, the MOE website indicates that admission brochures for every program’s mode of study, tuition and requirements are “to be announced.” Therefore, our research team manually verified every program's official webpage to retrieve the missing data. By making additional inquiries to admission officers of

8

colleges, our researchers were able to locate 84% of the total programs’ modes of study, tuition and requirements.

Three steps to collect data were performed as follows:

1. Researchers used scripts in Python and Bash Shell (both programming languages) to retrieve data in an automated fashion from MOE’s regulatory unit on Sino-international cooperation in higher education (http://www.crs.jsj.edu.cn/index.php/default/index). Data were extracted in February 2012 and updated on January 10, 2013. Sorted and organized in an Excel spreadsheet, the data allowed for quick categorization of the attributes of TNE programs.

2. Researchers manually searched all the programs’ official webpages for enrolment details. However, the specific models of TNE cooperation and the mode of teaching were not available for 40% of the programs listed on the Internet. Some programs ceased enrolment because of expired licenses.

3. For those programs without sufficient details, our researchers initiated inquiries by email and phone to college admission officers. JMSC eventually compiled data on 84% of all transnational programs available.

6. Findings and Analyses

6.1. RQ#1: Chinese Government Policy Ensures Local Control of TNE Table 1 is a summary of key government measures regulating “Sino-Foreign Cooperation in Running Schools.” Gleaned from MOE documents and data, these regulations are also applied to Sino-international cooperative programs in higher education. Current transnational higher education in China is therefore a highly regulated activity (Huang, 2006, 2007; Zheng, 2008). Since 1993, the Chinese government has adopted the following key policies which, in essence, enforce local control while encouraging foreign investment in TNE:

Table 1: Chinese government policy directives on TNE

Year Policy Highlights

1993 Notice on Individuals from Overseas Institutions to Run Cooperative Schools in China, issued by the State Education Commission (SEC), which is now renamed as the Ministry of Education (MOE)

First stipulation on transnational higher education in China

1995 Interim Provisions for Chinese-Foreign Cooperation in Running Schools, issued by the State Education Commission (SEC)

Detailed regulations on transnational higher education in China, including principles for the collaboration, limits of examination, approval procedure, and the organization leadership structure

9

1996 Notice on Reinforcing the Administration of Degree Accreditation of Chinese-Foreign Cooperation in Education

Standardization of cooperative education at or above university level education

2003 Regulations of the People’s Republic of China on Chinese-Foreign Cooperation in Running Schools

Detailed regulations governing institute establishment, organization and activity, program approval, administration and assessment details, to provide additional legal protection to students and to Chinese and foreign partners institutions.

2004 Measures for the Regulations of the People’s Republic of China on Chinese-Foreign Cooperation in Running Schools

2006 Opinions of the Ministry of Education on Some Issues concerning Current Sino-foreign Cooperative

Education 教育部关于当前中外合作办学若干问题的意见

In terms of the existing problem, the stipulation reinforces the role of quality management of transnational higher education.

“Tighten the quality control over the Sino-foreign cooperative education. At present, we need to focus on the quality control over Sino-foreign cooperation in higher education, protect the reputation of Sino-foreign cooperative education, and improve the management on student enrollment and nurturing, planning and policies on subjects and majors, the issuance of dual-campus certificates, and tuition and fees.”

http://www.crs.jsj.edu.cn/index.php/default/news/index/1

“There are still some outstanding issues in Sino-foreign cooperative education, which should be great concerns of local departments of educational administration and universities. Further regulate the order in Sino-foreign cooperative education.”

http://www.crs.jsj.edu.cn/index.php/default/news/index/18

2007 Notice of the Ministry of Education on Further Regulating Sino-Foreign Cooperation in Running

Schools 教育部关于进一步规范中外合作办学秩序的通知

10

In China, all Sino-international cooperative programs come under the jurisdiction of the Ministry of Education (MOE) (2003). The most critical document establishing MOE policies was published as “Chinese-Foreign

Cooperation in Running Schools”（中外合作办学; Zhong Wai He Zuo Ban Xue). A translation of key passages appears below:

The Chinese government encourages local universities to cooperate with foreign “accredited” and renowned universities in launching new academic programs to improve the quality of teaching and learning, and to introduce high-quality foreign education resources to local universities (Feng & Gong, 2006; Garrett, 2003b; Helms, 2008; Huang, 2007; Li et al., 2011; Mok & Xu, 2008; Qin, 2007; Tan, 2009). Resources include the concepts, systems and policies, management, courses, teaching materials, and teachers (Tan, 2009).

The Chinese government welcomes local institutions to cooperate with foreign institutions in emerging disciplines, areas of urgent national need, and areas that are weak or perceived to be deficient in China (Huang, 2006, 2007; Li et al., 2011; Qin, 2007).

The Chinese government does not permit foreign universities to set up their independent branch campuses in China; they must collaborate with local institutions (Li et al., 2011; Lin & Liu, 2007; Mok & Xu, 2008).

For Sino-international collaboration in establishing a full campus, not less than half of the members of the governing body of the institution must be Chinese citizens, and the post of president must be filled by a Chinese citizen who is residing in China (Garrett, 2003a; Helms, 2008; Huang, 2006; Yang, 2009)

Tuition fees for Sino-foreign cooperative programs should be decided according to related price policy issued by the Chinese government (Helms, 2008; Mok & Xu, 2008; Yang, 2008). Income from tuition fees should be used solely for the expenditure and development of the Sino-foreign cooperative programs/institutions (Garrett, 2003a; Helms, 2008).

The MOE stipulates that TNE programs in higher education shall abide by Chinese laws and decrees, implement China’s guidelines for education, conforming to China’s need for educational development and requirements for the training of talent to ensure teaching quality (State Education Commission, 1995). Therefore, directives issued by the Chinese government not only serve to support and regulate the growth of TNE, but also ensure “educational sovereignty” on the Chinese side (Feng & Gong, 2006; Huang, 2006).

Consistent regulation stressing local control satisfies RQ#1: How do Chinese government directives encourage foreign university investment in TNE while maintaining local institutional control?

China’s MOE evidently encourages local institutions to launch cooperative TNE with foreign institutions by adopting a “carrot and stick” approach. The “carrot” is clearly profit potential and knowledge exchange (along with exchange of faculty and students, adding prestige) for foreign institutions as well as Chinese ones; the “stick” is local administrative, philosophical, and curricular controls (Helms, 2008; Li, 2009; Lin & Liu, 2009; Mok & Xu, 2008; Yang, 2008; Zheng, 2008). Foreign countries may view education as an industry -- a form of trade to increase national income (Li, 2009; Qin, 2007) [Note 5].

Similar to their foreign counterparts, many Chinese institutions host cooperative programs for income and profit. is A disproportionately large amount of government funding is allocated to prestigious institutions in China (including the “211 Project” and the “985 Program”) (Li, 2009; Tan, 2009; Zheng, 2008). This results in a shortage of funding for many local universities.

11

6.2 RQ#2: Uneven Geographic Distribution of Sino-international TNE

This section examines the source countries, types of partner institutions, the levels and the subject areas of cooperative programs. According to the data from the MOE as of January 10, 2013, 773 Sino-international cooperative programs at the undergraduate level or above have been reviewed and approved. Of the total, 665 permits for the programs were still valid, while 90 had expired by December 31, 2012. The distribution of these programs is geographically uneven, presenting challenges of opportunity for Chinese students throughout the lesser-served provinces.

6.2.1. Main Source Countries and Host Provinces Previous research shows that large foreign partner institutions mostly come from developed countries or regions with developed economies and advanced technology (Li, 2008; Mok & Xu, 2008; Yang 2008). Qin (2007) reveals that foreign partner institutions mainly come from members of the Organization for Economic Co-operation and Development (OECD), especially English speaking countries. Our data (Table 2, Figure 1) demonstrate a similar trend.

Among the 773 Sino-foreign cooperative programs, UK institutions represent the majority at (22% of the total, with 170 projects, followed by the United States (17.6% %) and Australia (15.5%%). A range of other countries, including Russia, Canada, Hong Kong, Germany, and France, also have cooperative programs in China.

Table 2. Top 10 source countries and administrative regions (including Hong Kong SAR) for Sino-international cooperative programs

Source Countries

No of Programs

Source Countries

No of Programs

UK 170 Hong Kong 38

USA 136 Germany 34

Australia 120 France 34

Russia 94 Korea 23

Canada 55 Ireland 12

12

Figure 1: Source countries for TNE in China

6.2.2. Host Provinces

Previous research has shown that many cooperative programs are concentrated in the economically developed and metropolitan Eastern coastal area (Adams & Song, 2009; Qin, 2007; Yang, 2008). Qin (2007) states that policy initiatives do not emphasize cooperative programs in the less developed and more remote areas in China such as the West. Helms (2008) and Qin (2007) add that business-oriented foreign partner institutions favour collaboration with Chinese institutions with good reputations in economically developed areas.

Our data show a similar scenario. The 773 cooperative programs in the MOE database spread over 27 Chinese provinces, with a concentration in the Eastern coastal area. These findings generally support the condition of unequal distribution of TNE throughout China (RQ#2), with most Sino-international cooperative programs concentrated in the highest population areas.

However, anomalies exist. One interesting finding is that the comparatively sparsely populated northeast province of Heilongjiang hosts the highest number of cooperative programs. Of the 773 Sino-foreign cooperative programs studied, 166 are hosted in Heilongjiang, 1.6 times the number of cooperative programs in Shanghai (102), and double those in Beijing (75). Moreover, Russia is a significant source country for Heilongjiang TNE, offering partnerships to 82 of the 166 programs in Heilongjiang (Table 3, Figures 2, 3).

By contrast, Guangdong province, one of the most economically developed provinces in China, hosts far fewer cooperative programs than other developed areas, such as Shanghai and Beijing. However, Guangdong’s close proximity to Hong Kong, a seat of global learning, may affect administrative decisions to establish programs further south in the Hong Kong SAR.

13

Table 3. Top 10 host province for Sino-international cooperative programs:

Host Province No of Programs

Host Province

No of Programs

Heilongjiang 166 Shandong 49

Shanghai 102 Liaoning 33

Beijing 75 Zhejiang 33

Jiangsu 67 Hubei 29

Henan 56 Tianjin 28

Figure 2. Host provinces of Sino-international cooperative programs

14

Fig 3. Main sources countries of Sino-international cooperative programs in Heilongjiang

6.3. RQ#3: Public Universities Lead in Sino-international Investment and Participation

Earlier research shows that most of the foreign partner institutions are not ranked as world-class universities in terms of research and teaching (Feng & Gong, 2006; Li, 2009; Lin & Liu, 2007, 2009; Qin, 2007).

Partner institutions can be classified into three categories: (1) public universities, community colleges and public higher education institutions; (2) private universities and colleges, and (3) private companies Associations, Foundations and individual. However, 84% of the foreign partners are public universities, community colleges and public higher education institutions, indicating a definitive answer to RQ#3: The vast majority of international participation and investment in cooperative TNE programs comes from the public college and university sector. Presumably, public universities that cope with declining state and federal funding over the years are now turning to TNE to fill the budget gap.

Based on the Times Higher Education 2012-2013 survey (Table 4)[Note 6], only 95 foreign partner institutions (around 12%) rank among the top 200. In other words, the majority of international partner institutions in China are not ranked as world-class universities in terms of research and teaching.

Table 4. Types of partner institutions in Sino-international cooperative programs

Types of partner institutions No of Programs

%

Public universities, community colleges and public higher education institutions

652 84.1%

Private universities and private colleges 113 14.6%

Private companies Associations, Foundations and individual 10 1.3%

15

6.3.1. Level and Subject Areas Offered Past research shows that undergraduate study dominates cooperative programs (Liu & Lin, 2009). Our data are consistent; the MOE data show that nearly 70% of the cooperative programs are undergraduate and 22% are master’s programs. However, the MOE data also indicate that cooperative programs with Hong Kong institutions are mostly graduate level; of the 38 programs partnering with institutions from Hong Kong, 31 are Master’s program and one is a PhD program. Students in 28 programs can receive degrees awarded by institutions from Hong Kong.

Fig 4. Level of programs offered in China

Fig 5. Level of programs offered by institutions from Hong Kong

Previous studies indicate that many cooperative programs are related to business, commerce and management (Garrett, 2003a; Gide et al., 2010; Huang, 2006; Li, 2009; Lin & Liu, 2007, 2009; Qin, 2007). Our data show a similar picture, in which 338 out of 773 programs are related to business, commerce, finance

16

and management, followed by programs on information and communication technology (131 programs). These programs (Table 5) are known because they produce “low cost and high profit” (Qin, 2007).

Table 5. Areas of study in Sino-international cooperation

Discipline Number Of Programs

Business Administration (MBA/EMBA), Economics and Finance; Sales and Marketing; Accounting; Project Management; Economic Management, International Business and Trade, Hospitality and Tourism Management; E-Commerce, Sport Management

338

Computing Technology, Networking Technology, Information Engineering, Communication Engineering, Information Management, Information Systems, Software Engineering

131

Mechanical Engineering and Automation, Automobile Engineering, Electrical Engineering and Automation, Civil Engineering, Traffic Engineering Aircraft Engineering, Shipbuilding and Oceanography, Engineering, Maritime, Oil Reservoir Engineering, Nuclear Technology and Engineering; Textile Engineering,

129

Chemistry, Applied Chemistry, Bioscience, Mathematics And Applied Mathematics, Science, Animal Science, Food Science and Engineering, Physics, Applied Physics, Biological Engineering, Chemical Engineering

73

Art and Design, Industrial Design, Animation, Costume Design, Music, Acting, Film Studies 55

Language studies, English, Japanese, Korean, Russian 42

Farm, Agriculture, Grass and Science, Environmental Science And Engineering, Agriculture Management

30

Nursing, Clinical Medicine, Optometry and Dentistry, Public Hygiene 27

Civil Engineering, Architecture, Urban Planning, Building Construction And Real Estate 20

Education, Early Childhood Education, Sports Education, Vocational and Technical Education 17

Law 14

Social Work, International Affairs and International Relationships 12

Journalism, Media Studies, Digital Media, Advertising, Photography 14

History, Literature, Culture, Cultural Heritage Protection, Culture Exchange 6

Total(* Some Programs Offered Multiple Discipline Studies) 907

6.4. RQ#4. Models of TNE Operation/Cooperation Favor Combinations of Home Study & Study Abroad 6.4.1.Types of Sino-international Cooperation According to the MOE database, there are only eight Sino-international institutions with independent legal status along with an independent campus (5 existing,3 under construction). MOE has approved three Sino-

17

international institutions to construct China campuses: NYU Shanghai University, a joint project of East China Normal University and New York University; Duke Kunshan University (DKU), a joint project of Kunshan city government ,Wuhan University and the Duke University; Wenzhou-Kean University, a joint project of Wenzhou University and Kean University. Separately, 34 Sino-international institutions operate at existing Chinese universities without independent legal entity status [Note 7].

6.4.2. Common Operations Models and Degree Awards Since 39 of the Sino-international programs provide several different types of administrative operation, here we enumerate the most popular operations models based on our data discovery. Many program models are differentiated by years of student study in home institutions vs. institutions abroad. For example, over a hundred of China’s TNE programs currently require that students complete their four years of undergraduate degree study in China. However, 320 cooperative programs now permit Chinese students to go abroad for international study part of the time, hence satisfying their desire for exposure to international lifestyles, language, educational practices, and culture. Further, a 3:1 institutional preference for a “split” program experience both at home and abroad strongly suggests the answer to RQ#4: the most popular operational model for TNE in China is the “open combination model” of local and international study experience (see model #2 below). TNE programs not only differ according to the years students spend at host vs. foreign institutions, but also by the majors and degrees offered, the numbers of international faculty on host campuses, and the costs of tuition. In summary, the most common attendance models are as follows:

Model 1: Studying Abroad At Home (“4+0” for undergraduate programs and “1+0”, “2+0”, “3+0 for diploma programs)

This model allows Chinese students to pursue a joint program in China for the entire period of their study. A number of studies describe this “X+0” mode as “studying abroad at home” (Hou et al., 2010; Li et al., 2011) or “overseas study without going abroad” (Huang, 2006). The advantages of this study mode include comparatively low tuition fees, localization of the learning environment, and a combination of Western and Chinese language learning (Hou et al., 2010).

Model 2: Studying at Home and Abroad The common models for study both at home and abroad are commonly referred to as “2+2”, “3+1”, “1+3,” each referring to a combination of years in China and those studying at international institutions. For “2+2”, Chinese students spend the first two-year in China and the remaining two-year’s of study in the home campus of the foreign partner institutions. For “3+1”, Chinese students complete the majority of their study in China and complete the program by spending a year abroad. For “1+3,” Chinese students spend the first year of the study in China, mainly studying a foreign language and basic courses. They then go abroad to the foreign partner institutions for three years of more advanced study.

6.4.3. Degrees Awarded

In Sino-foreign cooperative programs, students can either receive single degrees or double degrees (Zheng, 2008). For single degree programs, only a Chinese or foreign degree will be awarded upon completion of the program. In most cases, students receive a degree offered by the foreign partner institution. For double degrees, students will receive two degrees, one each from the Chinese university and from the foreign partner upon completion of studies. Double degrees may have some value in the graduate admissions process (Emmett, 2011).

18

For undergraduate and diploma programs, 105 such programs currently offered require students to complete the entire program inside China. Fifty-five (55) offer Chinese bachelor degrees, 26 offer double degrees, while 2 offer students foreign degrees only. Six mention that students will receive a Certificate of Graduation from the foreign partner institutions and a Chinese bachelor’s degree. Also, one program states that foreign bachelor degrees will be awarded only to students enrolled outside the quotas allocated to universities by the MOE, while double degrees will be awarded to students within the quota system [Note 8]. Typically, non-state quota students pay higher tuition fees. They could also be admitted with lower scores in the national university entrance exam known as Gaokao.

On the other hand, among the 320 TNE programs providing opportunities for study abroad, 144 state that students will receive double degrees upon completion of their studies at both campuses in China and abroad. One hundred seventy (170) programs mention that students will be awarded only a Chinese bachelor’s degree even after completing their studies at both Chinese and foreign campuses. Two institutions mention that students will receive a bachelor’s degree from the foreign partner institution exclusively. Another four institutions state that students will be awarded one degree and one certification from the international institution partner.

Figure 6: TNE Programs at Home or Abroad

6.4.4. TNE Master’s Programs One hundred-forty (140) Sino-international cooperative master’s programs have three modes of study: part-time study (80 programs), full-time study (33 programs), and part-time/full-time study (7 programs). A total, 71 Sino-international cooperative Master’s programs indicate that the entire program will be taught inside China. Fifty (50) programs will award students with a foreign partner institution’s Master’s degree while 16 programs will award students with a foreign partner institution’s Master’s degree together with a Chinese Certification upon completion of study. Five programs mention that students will be awarded double degrees.

523 undergraduate and diploma programs

425 with information

105 Studying Abroad at Home

42 double degree

55 only Chinese degrees

2 only foreign degree

6 Chinese degree+ foreign certification

320 Study at Home and Abroad

144 double degree

170 only Chinese degree

2 only foreign degree

2 Chinese degree+ foreign certifation

2 Chinese Certifation+ foreign degree

98 no information/terminal/ expired

19

Forty-nine (49) Sino-international cooperative Master’s programs provide students opportunity to both study in China and abroad; and six of these programs will award their students double degrees while 38 will award degrees from the foreign partner institution. Five will award a foreign partner institution’s master’s degree and a Chinese certification.

Figure 7: Master’s Programs Study Model and Degree Awarded

6.4.5. TNE Doctoral Programs There are altogether seven Sino-international cooperative doctoral programs in China, all part-time. Of these doctoral programs, two allow students to complete their entire study in China and offers students a foreign doctoral degree only. One program awards a Chinese doctoral degree only. Students from the other programs can choose to pursue part of their studies overseas at the foreign partner’s home campus. Of these five, four award foreign doctoral degrees and only one program, a Doctor of Optometry program formed from a collaboration of Wenzhou Medical College and the New England College of Optometry, offers a double degree.

Figure 8: Model of transnational doctoral programs and degrees awarded

160 master

programs 120 with information

71 Studying Abroad at Home

5 double degree

50 only foreign degree

16 Chinese Certification + foreign degree

49 Study at Home and Abroad

6 double degree

38 foreign degree only

5 Chinese certification + foreign degree

40 no information/terminal/

expired

7 doctoral

programs 7 part-time

2 Studying Abroad at Home

2 only foreign degree

5 Study at Home and Abroad

1 double degree

4 only foreign degree 0 full-time

20

6.4.6. Undergraduate-Master’s Programs There are 43 Sino-foreign cooperative programs offering joint undergraduate/master programs whose length of study ranges from five to six and a half years. All provide postgraduate studying abroad and will award foreign master degree if students completed. Seventeen (17) of these undergraduate-Master’s programs are “study abroad at home” in the undergraduate stage, followed by student abroad for the Master’s degree. There are 40 combined degree programs allowing both “study at home and abroad” at both the undergraduate and master’s levels; each of these awards different combinations of degrees and diplomas. For example, 26 programs offer students a Chinese bachelor degree and a foreign partner institution’s Master’s degree upon their completion of programs in both China and overseas.

Table 6: Degree awarded: “study abroad at home” programs

Degree Awarded (study abroad at home) Undergraduate Master’s PhD

Double degree 42 5 0

Only External degree (including HK degree)

2 50 2

Only China degree 55 0 0

one certification + one degree 6 16 0

Total 105 71 2

43 undergraduate-master jointed

programs(* some have

multiple choice)

17 undergraduat at home+Master abroad(4+0+1)

3 Chinese Bachelor’s Degree + Foreign Bachelor’s Degree +

Foreign Master’s Degree

12 Chinese Bachelor’s Degree + Foreign Master’s Degree

2 Chinese Bachelor’s Degree + Foreign

Certificate(undergraduate) +Foreign Master’s Degree

40 undergraduate home + undergraduate abroad + Master

abroad(3+1+1/2+2+1/)

13 Chinese Bachelor’s Degree + Foreign Bachelor’s Degree +

Foreign Master’s Degree

26 Chinese Bachelor’s Degree + Foreign Master’s Degree

1 Chinese Bachelor’s Degree + Foreign

Certificate(undergraduate) +Foreign Master’s Degree

Figure 9: Models of Undergraduate-Master’s joint programs of study and Degrees Awarded

21

Table 7: Degree awarded: “study at home and abroad”

Degree Awarded (study at home and abroad)

Undergraduate Master’s PhD

Double degree 144 6 1

Only External degree (including foreign and HK degree)

2 38 4

Only China degree 170 0 0

one certification + one degree 4 5 /

Total 320 49 5

6.4.7. Enrolments and Tuition Fees Of the 734 TNE programs studied, 416 either require students to study overseas, or offer them the opportunity as an option.

Among 272 undergraduate programs providing their own data, 209 indicated that students need to pay both the Chinese and foreign institutions if they studying at home and abroad. In terms of tuition paid for studying

in China, 60% of undergraduate programs charge ￥10,000-19,999 per year. Of 99 master programs with

information, 45% of them charge ￥100,000-199,999 in total. The most expensive programs are two Executive (EMBA) programs offered by Zhejiang University operating jointly with the business school HEC (Hautes études commerciales) Paris, France; and Fudan University operating jointly with Washington University in St.

Louis, USA. They combined programs charge ￥58,000 for tuition and fees.

Table 8: Cooperative TNE Undergraduate Programs and Tuition Rates

Undergraduate -Tuition in China (￥ per year ) Number of Programs

￥4000-6000 20

￥10,000-19,999 163

￥20,000-29,999 64

￥30,000-39,999 9

￥40,000-49,999 11

￥50,000-100,000 5

Total 272

Master – Tuition (total,RMB) Number of Programs

0 2

￥1-99,999 28

22

￥100,000-199,999 45

￥200,000-299,999 13

￥300,000 -600,000 11

Total 99

6.4.8. Language Proficiency

Of the 178 undergraduate programs with information, 102 require their students to pass international standardised tests in English language proficiency, such as IELTS and TOEFL; 71 programs require students to pass a foreign language test other than English before attending the foreign partner institutions. Eight institutions do not require any language proficiency test.

7. Discussion This introductory survey found that as of January 10, 2013, a total of 773 Sino-international cooperative TNE programs had been reviewed and approved by the Ministry of Education of the People’s Republic of China (MOE). In this study, our goals were to identify important empirical trends in TNE program distribution, investment, and operational models while addressing potential roadblocks to cooperative program development. Among those roadblocks are government regulation based on China’s claim to “home rule” educational sovereignty and local control, culture and language difference, infrastructure start-up costs, outright censorship, and conflicting educational philosophy and practices (Helms, 2009; Pan, 2009; Nix, 2009; Emmett, 2011; Daly, 2013).

Regarding source countries of foreign partner institutions in China, the largest percentage comes from English-speaking OECD member countries. Most cooperative programs are based in the more economically developed metropolitan Eastern coastal area in China, raising the question of how China will offer equal opportunities for international education to students in less populated parts of the country.

We developed two findings not reported in the current literature. First: Heilongjiang, a less economically developed province in northeast China, hosts the highest number of Sino-international cooperative programs. Of these programs, nearly half are partnered with institutions from Russia, a non-English speaking, and non-OECD country. Second: Guangdong province in southern China, one of the richest provinces in China, hosts only 19 cooperative programs.

In terms of types of partner institutions, MOE data show that not more than one-third of foreign partner institutions rank among “world-class” universities in terms of teaching and research; however, among all partner institutions, 84% are coming from the public university and college sector.

Regarding study level and subject areas offered, we found that nearly two-thirds of the cooperative programs are undergraduate programs. Fifty-five percent (55%) belong to professional and practical fields including business, commerce, management, and information and communication technology and engineering. Finally, 31 out of 38 programs partnered with higher education institutions in Hong Kong are Master’s level or higher programs. The Hong Kong connection is a deviation from the general pattern of mainland TNE programs concentrated in the undergraduate sector.

All Sino-international institutions are without independent legal status, which means that foreign institutions cannot establish independent academic programs without Chinese domestic partners.

23

Most undergraduate and diploma programs provide study abroad opportunities. Most of these programs offer double degrees to their graduates. For master’s programs, nearly 60% of the programs are entirely taught within China. Also, a majority of Master’s programs offer foreign degrees only. For undergraduate-and master’s programs, most require students to study at home and abroad, for which students are awarded different combinations of degree and diplomas. The different pattern of study modes at all academic levels provides a certain flexibility to meet student (and market) demands.

This paper provides a baseline overview of the current Sino-international cooperative activities, which is only a first step toward learning about the nature of transnational higher education. This analysis of basic data, which has become more readily available than in past years, offers insight into future areas of research that might include:

(1) A detailed study of Sino-foreign cooperation in Heilongjiang province. Research questions would probe the reasons for the predominance of Russian institutional partners, the quality of the programs and the reason why most program and degree information is not available on their websites.

(2) A study on Sino-Hong Kong cooperation. While the majority of Sino-foreign programs are undergraduate level programs, 31 out of 38 programs partnering with Hong Kong institutions are Master’s level or above programs. Why and what are the rationales behind the demand (China) and supply (Hong Kong) side of this educational exchange?

(3) A study on Sino-foreign cooperation in Guangdong. As one of the most economically developed province in China, why does Guangdong province host only 19 cooperative programs, which constitute a mere 2.4% of all cooperative programs in China?

(4) A detailed and comprehensive research study on the partnership arrangements of all Sino-international cooperative programs, including financial arrangements, academic and operation managements.

(5) A specific inquiry into the extent to which sensitive subjects of communications and journalism can be handled at the core of a TNE partnership program, especially when a prerequisite for success would appear to be avoidance of government strictures of freedom of information and communication.

Further research in these areas will have policy implications for China’s policy on Sino-foreign cooperation in higher education, issues of quality control, and foreign institutions expansion in China.

8. References Adams, J., & Song, H. (2009). Key developments and future challenges in Chinese-foreign cooperation in higher

education. Journal of Knowledge-based Innovation in China, 1(3), 185-205. British Council (2013). The shape of things to come: the evolution of transnational education: data,

definitions, opportunities, and impacts analysis. Going Global 2013. Retrieved from http://www.britishcouncil.org/sites/britishcouncil.uk2/files/the_shape_of_things_to_come_2.pdf

Conn, P. (2011). Beware the dragon. Chronicle of Higher Education, December 11, 2011. Dong, Y. (2008). Research on Sino-Australia co-operative program teaching management pattern and implementation plan. US-China Education Review, 5(3), 43-48. Emmett, A.S. Go anywhere but here. Caixin Online, October 24, 2011. Retrieved from

http://english.caixin.com/2011-10-24/100317029.html Ennew, C. T., & Yang, F. (2009). Foreign Universities in China: a case study. European Journal of Education,

44(1), 21-36. Fang, W.H. (2012). The development of transnational higher education in China:

24

a comparative study of research universities and teaching universities. Journal of Studies in International Education (16): 5, 5-23. Retrieved from http://jsi.sagepub.com/content/16/1/5.full.pdf+html

Farrar, L. (2012, June 3). Treading a Fine Line Teaching Journalism in China. The New York Times. Retrieved from http://www.nytimes.com/2012/06/04/world/asia/04iht-educlede04.html

Feng, G., & Gong, S. (2006). Sino-foreign joint education ventures: a national, regional and institutional analysis. London: The Observatory on Borderless Higher Education.

Feng, J. (2009). Promoting the quality of Sino-foreign cooperation school. US-China Education Review, 6(5), 21-25.

Garrett, R. (2003a). Higher education in China, part 1: context & regulation of foreign activity. London: The Observatory on Borderless Higher Education.

Garrett, R. (2003b). Higher education in China, part 2: scale of foreign activity & examples. London: The Observatory on Borderless Higher Education.

Gide, E., Wu, M., & Wang, X. (2010). The influence of internationalisation of higher education: A China's study. Procedia - Social and Behavioral Sciences, 2(2), 5675-5681.

Hayhoe, R. (1989). China's universities and western academic models. Higher Education. 18, 49-55. Helms, R. M. (2008). Transnational education in China: key challenges, critical issues, and strategies for

success. London: The Observatory on Borderless Higher Education. Hou, R., Zhao, X., Zhou, J., & Li, H. (2010). Method exploration and practice to improve the teaching quality of

computer speciality sino-ireland cooperative education. Paper presented at the the 5th International Conference on Computer Science and Education (ICCSE), Hefei, China, August 24-27, 2010, 1645 - 1648.

Huang, F. (2006). Transnational higher education in mainland China : A focus on foreign degree-conferring programs. R.I.H.E. international publication series 10, 21-33.

Huang, F. (2007). Internationalization of Higher Education in the Developing and Emerging Countries: A Focus on Transnational Higher Education in Asia. Journal of Studies in International Education, 11(3-4), 421-432.

Jiao, Y.Z. (2006, February 7). Opinions of the Ministry of Education on relevant issues concerning current Sino-Foreign cooperative education. Asian Legal Information Institute, 5.

KPMG (2010). Education in China. Retrieved from http://www.kpmg.de/docs/Education-in-China-201011.pdf Li, C. (2004). Bringing China's best and brightest back home: Regional disparities andpolitical tensions.

Leadership Monitor. 1(1). Retrieved from http://media.hoover.org/sites/default/files/documents/clm11_lc.pdf

Li, S. B. (2009). Transnational education in China: thirty years. Paper in Asia-Pacific sub-regional preparatory conference for the 2009 world conference on higher education, 'Facing global and local challenges: the new dynamics for higher education,' 24-26 September, Macao SAR, PRC. Retrieved from http://www.unescobkk.org/fileadmin/user_upload/apeid/workshops/macao08/papers/2-a-1.pdf

Li, S.X. (2012). China's International Education initiatives and view of its role in global governance [Electronic version]. Frontiers of Education in China. (7):1, 103-123.

Li, W., & Li, Y.X. (2010). An analysis on social and cultural background of the resistance for China's education reform and academic pressure [Electronic version]. International Education Studies. 3 (3), 211-214.

Li, Z. (2013). Study and thought on Sino-Foreign Cooperative Education in higher vocational colleges in Jiangsu province. Asian Social Science (9):1, 112-121.

Li, X., Faulkner, D., & Yan, Y. (2011). The strategic stages of China-UK educational alliances: an empirical study. Asia Pacific Education Review, 17(1), 7-24.

Lin, J., & Liu, Z. (2009). Appropriate Importation and Effective Utilization of Top Quality Foreign Higher Education Resources for Sino-Foreign Cooperation in Running Schools. Chinese Education & Society, 42(4), 68-77.

25

Lin, J. H., & Liu, Z. P. (2007). Importing quality higher educational resources through Chinese-foreign cooperation in running schools. US-China Education Review, 4(3), 1-7.

Ministry of Education of the People's Republic of China. (2003). Regulations of the People's Republic of China on Chinese-foreign Cooperation in Running Schools. Retrieved from http://202.205.177.9/english/laws_r.htm

Mok, K. H., & Xu, X. (2008). When China opens to the world: A study of transnational higher education in Zhejiang, China. Asia Pacific Education Review, 9(4), 393-408.

Nix, J.V. (2009). Sino-U.S. transnational education—'buying' an American higher education program: a participant observation study. (Unpublished doctoral dissertation). Washington State University, Pullman, WA.

Pan, M.Y. (2009). An analytic differentiation of the relationship between Education Sovereignty and Education Rights. China Education & Society, 42(4), 88-96.

Qin, M. (2007). The current situations of Chinese-foreign cooperation in operating schools and its countermeasures. Frontiers of Education in China, 2(3), 336-348.

Sino-foreign educational programs face check up, China.org.cn, November 21, 2011. Retrieved March 26, 2012 from http://www.china.org.cn/china/2011-11/21/content_23966758.htm

Sleeper, J. (2013, August 31) Liberal Education in Authoritarian Places. The New York Times. Retrieved from http://www.nytimes.com/2013/09/01/opinion/sunday/liberal-education-in-authoritarian-places.html?_r=0

Staley, O., & Golden, D. (2011, November 28), China halts U.S. college freedom at class door. Bloomberg. Retrieved from http://www.bloomberg.com/news/2011-11-28/china-halts-u-s-college-freedom-at-class-door.html

State Education Commission (SEC). (1995). Interim provisions for Chinese-foreign cooperation in running schools. Retrieved from http://www.edu.cn/cooperate_1406/20060323/t20060323_4010.shtml

Tan, Z. (2009). Internationalization of Higher Education in China: Chinese-Foreign Cooperation in Running Schools and the Introduction of High-Quality Foreign Educational Resources. International Education Studies, 2(3), 166-171.

UNESCO/COE. UNESCO & Council of Europe. (2001). The UNESCO-CEPES/Council of Europe code of good practice for the provision of transnational education. Paris: UNESCO.

Yang, R. (2008). Transnational higher education in China: Contexts, characteristics and concerns. Australian Journal of Education, 52(3), 272-286.

Yang, R. (2005) Corruption in China’s higher education system: A malignant tumor. International higher education, 39 (Spring), 18-20.

Yu, D. (2003). Sino-foreign cooperative educational institutions. China Law & Practice. Retrieved March 30, 2013 from http://www.chinalawandpractice.com/Article/1693216/Channel/9940/Sino-foreign-Cooperative-Educational-Institutions.html

Zheng, L. (2008). Chinese universities motivations in transnational higher education and their implications for higher education marketization. In T. Coverdale-Jones & P. Rastall (Eds.), Internationalising the university -the Chinese context (pp. 33-56). UK: Palgrave Macmillan.

9. Notes

Note 1. A brief report entitled “Sino-foreign educational programs face check-up” released on China.org.cn, November 21, 2011,

noted that the Ministry of Education (MOE) had clamped down on joint Chinese-foreign owned educational programs approved by

the government. Of the 161 joint programs that applied, MOE approved only 45 in August, 2011, warning students to register first

on an MOE-designated website to ensure their program had met accreditation requirements.

Note 2. As Pan Mao Yuan, a professor at Xiamen University, stated in 2009: “At the present time, Chinese institutions stand at a

disadvantageous position for running schools with foreign partners….Foreign universities have rich experience in course planning,

26

recruitment of lecturers and executives, and exploiting the global market. …Market access may lead to infiltration of Western values

and cultures at odds with current Chinese circumstances, adding to our task to safeguard educational sovereignty, maintain Chinese

cultural heritage, and resist the Westernization of the Chinese life style.”

Note 3. Oliver Staley and Daniel Golden highlighted some of the diverging perspectives on academic freedom in an article published

in Bloomberg online: “China Halts U.S. College Freedom at Class Door” (November 28, 2011). The authors described an incident at

Nanjing University-Johns Hopkins joint campus in China, in which an American student violated Chinese rules by attempting to

showcase the best American and Chinese student work in his class by publishing a journal. Administrators forced a student to

withdraw an article about Chinese protest movements and prevented the journal from circulating outside campus. Johns Hopkins

and Nanjing University have yet to publish a joint academic journal in the 25 year history of their campus program.

Note 4. Cheng Li (2004) cites the dangers of disproportionate educational opportunities between coastal and inland regions and

especially between locally educated and foreign educated elites. Transnational programs have also faced accreditation and

corruption issues in parts of the country (Yang, 2005; Nix, 2009). Some institutions have been recognized of as diploma mills with

inferior standards and a lack of teaching quality, assessment and accountability (Pan, 2009; Li & Li, 2010). Nixhas cited the selling of

exam questions in some TNE programs, along with student purchases of masters and doctoral degrees and credits without attending

classes or doing academic work (2009).

Note 5. A Chinese government document issued in 2003 on regulating Sino-international cooperation in higher education does not

forbid foreign partner institutions from making a profit from running cooperative programs/institutions in China (Huang, 2006; Mok

& Xu, 2008; Yang, 2008). Foreign partners are allowed to seek “reasonable profit”, though the meaning of that term is not spelled

out. (Lin & Liu, 2009).

Note 6. http://www.timeshighereducation.co.uk/world-university-rankings/

Note 7. An example: China－EU School of Law in China University of Political Science and Law.

Note 8. Every year the Chinese government imposes a quota system on the number of candidates admitted to public and private

universities. The MOE endorses degrees for graduates within the state quota system (KPMG, 2010).

27

Who wants to go to work? An empirical analysis examining full time weeks of work among Canadians

Alan Chan, Ph.D*

Abstract: This paper uses the 2010 Canada Survey of Household Spending to find the determinants of the number of full time work weeks among Canadian employees. This paper empirically tests four potential factors (price, economic, demographic and geographic) and concludes that economic and demographic factors, not price or geographic factors, are the major determinants for hours of work by Canadians. The finding also suggests that workers from two of the four Maritime Provinces (New Brunswick and Nova Scotia) are working similar full time weeks compared to the rest of Canada. Keywords

Keywords: full time work; Atlantic Canada workers; geographical analysis; economic and demographic

variables

1. Introduction:

The Canadian Equalization Payment has been controversial for decades. It enables financial resources to flow from the richer provinces to the poorer ones. The provinces of Quebec, New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island are usually the recipients of these payments, whereas Alberta and British Columbia are generally providers. The purpose of the equalization scheme is to ensure provinces that lack “fiscal capacity” receive support to provide comparable government services to all Canadians wherever they live. One key source of revenue in different provinces is income tax and the key determinant of income tax is the amount of income made by individuals. Income, however, is strongly related to the hours an individual is willing to work. It is generally agreed that the Maritime Provinces are poorer than the rest of Canada, hence this paper studies whether there is evidence to argue that Atlantic Canadians are less engaged in their working habits than other Canadians. This paper examines the determinants for the number of full time weeks worked among Canadians to see if Maritimers are more adverse to full time work.

It is worth mentioning that Atlantic Canada is well-known for its beauty and relaxed lifestyles. Hunting, fishing and hiking are common activities enjoyed by Atlantic Canadians. In economic terms the opportunity cost of working longer hours can be assumed to be higher among Atlantic Canadians. Also, with comparatively affordable housing prices Atlantic Canadians may be wealthier in terms of real income. Therefore, they do not need to work long hours to get a higher standard of living compared to those living in Western Canada. As a result, it would not be surprising to see Atlantic Canadians working less than the residents of the rest of Canada. With economic constraints in the region, large enterprises are unlikely to have headquarters in the Maritimes and as a result, the number of higher paid jobs available in the region is likely to be less. However, it is also possible that Atlantic Canadians may need to work more to raise a family since their salaries are likely to be lower. *Crandall University

28

The focus this paper is to examine the number of weeks worked full time by Canadians in different provinces, not the income generated. The author is interested in knowing the determinants of hours of work. Working long hours may potentially cause many socio-economic problems including long term effects on interpersonal relationships. Working too little, on the other hand, may reduce economic benefits and cause financial distress. This paper examines the determinants of individual labor supply in terms of hours of full time work weeks per year.

This study focuses on those who work full time. It uses the micro data file of the Canada Survey of Household Spending for 2010. This survey captures the expenditure behavior as well as the work habits of Canadian households. The sample size of the dataset is 10811 individuals distributed across the 10 provinces and 3 territories of Canada. Table 1 below shows the percentage of workers who are not working full time. PEI and NB have a smaller percentage of citizens not working full time compared to the national average, whereas the provinces of NS and NL have a higher percentage of citizens not working full time compared to the national average.

Table 1: Percentage of citizens not working full time for at least one week in the last 52 weeks

BC AB SK MB ON QC NB PE NS NL Territories

Canada

% not Fulltime

48.14%

36.39%

42.11%

41.93%

44.28%

44%

43.26%

42.89%

47.27%

49.18%

35.60% 43.34%

Among those who have worked at least 1 week full time, the average numbers of full time weeks worked across different provinces are listed in table 2. Not surprisingly, there seems to be a geographical disparity between the East and the West coasts of Canada. According to the data, the hardest working citizens are from the province of Saskatchewan who worked an average of 46.64 weeks full time. The least hard hardworking citizens are from the province of Newfoundland and Labrador with an average of 39.23 weeks of full time work. The national average was 44.50 weeks of full time work. It is interesting to note that Atlantic Canadians are doing less full time work than the national average. All the other provinces and territories work more than the national average. Table 2: Number of weeks working Full time among provincial workers

BC AB SK MB ON QC NB PE NS NL Territories

Canada

Mean

45.32

46.49

46.64

45.31

45.81

44.51

43.28

41.21

43.72

39.23

44.97 44.50

RANK

4 2 1 5 3 7 9 10 8 11 6

Do Atlantic Canadians really work less than the rest of the country? This paper checks if it is indeed the culture of the Maritimes or if other demographic/economic factors may have caused this evidence of inequality.

The rest of this paper is organized as follows: Chapter 2 looks at the literature review concerning hours of working full time; Chapter 3 discusses the dataset and the descriptive statistics; Chapter 4 illustrates regressive results and discusses the findings; Chapter 5 concludes and suggests future research.

29

2. Literature Review What determines the hours of work for an individual? One could quickly point to the traditional neoclassical single period model of the leisure and work tradeoff. This traditional analytical framework allows us to theoretically look at rational choices made by workers to determine the equilibrium level of hours of work. Workers choose the optimal level of Leisure (L) that maximizes their utility level under the constraint of their current wage rate (w) and transfers (G). Mathematically, each worker solves: subject to

, where Y is the income level and T* is the maximum possible hours of work.

As suggested by this single period traditional framework, many studies have tried to determine the effect on work hours with respect to wage changes. It is generally believed that two opposite forces are acting against each other: the negative income effect and the positive substitution effect. The income effect argues with higher wage rate, workers are wealthier. As a result, they will choose to have more leisure, i.e., the hours of work decreases. The substitution effect, however, says as wage rate increases, the opportunity cost of leisure goes up. As a result, workers will not choose more leisure time. Depending on the relative magnitude of these forces, a worker can work more hours or less hours if there is an increase or decrease in wage rate. With this theoretical framework in place, empirical researchers started to make estimates using different datasets. Early empirical studies like Cain and Watts(1973); Masters and Garfinkel(1977); DaVanzo, DeTray and Greenberg (1976) have indicated the net wage effect is generally negative (i.e. The income effect dominates). Borjas (1980), on the other hand, has raised the possibility that a methodological bias has induced such findings. He argues that the net wage effect should be slightly positive once this bias is eliminated. Overall, the relationship between wages and hours worked is mixed in the literature throughout the last few decades. A recent empirical study by Gicheva (2013) found a positive relationship between wage rate and hours of work. In the dataset used for this paper personal wages rate were not available. Therefore, this paper had to presume an independent wage variable, which is the ratio of personal earned income over the total number of hours worked in a year.

Other economic variables also play an important role in the determinants of labor supply. For instance, Moffitt and Nicholson (1982) studied the effect of unemployment insurance on labor supply. Unemployment insurance can typically discourage work hours as it increases the reservation wage to work. In this study we will look at impacts of economic variables such as lifestyle expenditure requirements, investment income, and government transfers on the decision of how many weeks to work full time1.

Demographic variables are also employed. In the literature, some key demographic variables are gender and family composition. Scandura and Lankau (1997) examine the relationship among contractual differences between males and females. They found that females are more likely to choose contracts that are more flexible in working hours. Booth and Van Ours (2009) have also found out that females are happier working part time than working full time. However, Cha and Weeden (2014) used American CPS data from 1979 to 2009 which show that the difference between male and female hours of work is gradually decreasing. In this study we will include demographic variables like marital status, age, education, disability, number of earners, number of dependents and household size to study the impact of the choice of weeks working full time. Some of these demographic variables are expected to be positively related to the number of weeks of full time work (e.g. Number of dependents, household size). Some of them are expected to have negative effects (e.g. disability, numbers of earners). The others may have mixed effects (e.g. marital status, age, education level).

1 The author wants to thank Joe Gilhooly for pointing out that it may be easier for create part time rather than full time jobs in

economically challenged areas.

30

Finally, one important objective of this study is to find out if there is a regional difference in the choice to work full time. As suggested in the introduction chapter, we have evidence that Atlantic Canadians work less full time weeks than an average Canadian. We want to know if this finding is simply because of a regional culture effect or if it is due to other demographic or economic reasons listed above. Therefore, in this study, we will include some provincial dummies and check their directions and significance. Overall, our final empirical model of regression looks like:

where wi is the average wage rate of individual I; Rp is the regional dummies; Ye is the economic variable and Dk is the demographic variable. Since this paper focus on the determination of the number of full time weeks worked under the assumption of holding other things constant, four key sets of hypothesis are examined:

It is expected that the dummies for the Maritime province should be negative and significant if Atlantic Canadians do work less full time weeks than others, ceterus paribus. The result of regression is discussed in chapter 4. 3. Data and descriptive statistics This paper employs the 2010 Canada Survey of Household Spending conducted by Statistics Canada. It consists of a sample size of 10,811 respondents. Table 3a shows the descriptive summary of the dependent variable: Number of week full time among all participants, by province; Table 3b shows the descriptive statistics of those who are full time earners, by province.

Table 3a: Summary Statistics of number of week full time, all individuals, by province

Table 3b: Summary Statistics of number of week full time, only full time workers

Province

Mean N Std. Deviation

AB 29.58 926 24.195

BC 23.50 1076 24.463

MB 26.31 830 24.415

NB 24.56 927 24.024

NL 19.93 978 22.904

NS 23.05 897 23.989

ON 25.52 1486 24.611

PE 23.53 492 23.595

QC 24.92 1275 24.179

SK 27.00 938 24.749

Province

Mean N Std. Deviatio

n

AB 46.49

75 589 11.5212

9

BC 45.32

44 558 12.8160

8

MB 45.31

12 482 12.8345

7

NB 43.27

76 526 14.3626

2

NL 39.22

54 497 16.5858

4

31

Territory

28.96 986 23.975

Total 25.22 10811 24.278

NS 43.71

88 473 13.6750

7

ON 45.80

80 828 12.5442

1

PE 41.20

64 281 15.6673

0

QC 44.50

56 714 13.1098

8

SK 46.64

09 543 11.8797

0 Territ

ory 44.97

17 635 13.1117

2

Total 44.50

28 6126 13.4845

1

In terms of independent variables, a total of 31 variables are used. Like most empirical study, monetary variables are transformed into logarithms. A few dummies are used in the regression. The author has grouped the independent variables into 4 main categories: Price Variable (wage), Economic Variables; Demographic Variables; and Provincial Variables. The complete list is tabulated in Table 4. Table 4 List of independent Variables

Price Variable

Economic Variables Demographic Variables Geographic Variables

Variable

Measurement

Variable Measurement

Variable Measurement

Variable Measurement

Wage Ratio Expenditure Ratio (Log)

Household Size

Ratio NL Dummy

Investment Income

Ratio (Log)

Number of child under

4

Ratio PE Dummy

Government Transfer Income

Ratio (Log)

Number of child

between 4 and 17

Ratio NS Dummy

Other non-labor Income

Ratio (Log)

Number of Seniors

Ratio NB Dummy

Number of Full Time Earners

Ratio Respondent Age

Ratio QC Dummy

Number of Part Time Earners

Ratio Respondent Degree

Dummy ON Dummy

Weeks of Respondent working Part

time

Ratio Respondent Disability

Dummy MB Dummy

32

Spouse Age Ratio SK Dummy

Spouse Degree

Dummy AB Dummy

Spouse Disability

Dummy BC Dummy

Respondent Gender

Dummy

Marital Status

Dummy

Living in Urban Center

Dummy

The first purpose of the study is to identify if there are regional effects. Figure 1 illustrates the number of weeks workers work full time across different Canadian provinces and territories. It is shown that there is evidence that Maritime Canadians are working the least number of weeks full time. The second purpose of the study is to examine the relationship between wage rate and the number of weeks worked. The scatterplot in figure 2 gives evidence of mixed effects. The third purpose of the study is to examine economic variables. The scatterplot in figure 3 shows the relationship between government transfer income and the number of weeks working full time. It is expected to have a negative relationship, since government transfers are directed to those who are in need, i.e. the unemployed. However, with the scatter plot, it is difficult to check if we have a positive or negative relationship. This may indicate a policy failure by the government. The fourth purpose of this study in terms of demographics, is whether gender plays a role in the determination of hours worked. Figure 4 below illustrates the gender difference in terms of number of weeks worked full time. From the sample, it is unclear if gender plays a role in this determination. The number of full time weeks by working male and females are close according to this descriptive analysis.

Figure 1 Average weeks full time, by Province

Figure 2 Weeks full time Vs Wage Rate

33

Figure 3 Weeks Full time Vs Government Transfers

Figure 4 Average Weeks Full time, by

Gender

5. Regression Results and discussions

A simple ordinary least square regression (OLS) method is used in this study. Regressive results show an Adjusted R-square of 0.678 and this indicates the OLS estimation is satisfactionary. The OLS results are tabulated in Table 5a and the estimates of coefficients are tabulated in Table 5b below. Table 5a: OLS Results

Model Summary

R R Square Adjusted R Square

Std. Error of the Estimate

.824a .680 .678 13.723

ANOVAa

Model Sum of Squares

df Mean Square

F Sig.

1

Regression 2514023.258 30 83800.775 445.017 .000b

Residual 1184277.444 6289 188.309

Total 3698300.702 6319

Table 5c shows the coefficients and their significance in the OLS regression. The significant variables are summarized in below.

34

Table 5b Significant Variables

Price Variable Economics Variables

Demographic Variables

Geographic Variables

Significant at 0.01

Expenditure (+) Government Transfer (-) Other Income (-) Number FT earners (+) Number PT earners (+) Number PT weeks (-)

Household Size (-) Number of children <4 (+) # child btwn 4 and 17(+) Respondent Age (-) Respondent Degree (+) Respondent Disabled (-) Spouse Age (+) Spouse Degree (-) Spouse Disabled (+) Respondent is Male (+)

Significant at 0.10

Investment Income (-)

Newfoundland (-) PEI (+)

Table 5c: Estimates of Coefficients

Model Unstandardized Coefficients

Standardized Coefficients

t Sig.

B Std. Error Beta

1

(Constant) -3.403 4.490 -.758 .449

Wage .002 .002 .005 .722 .470

logexpense 2.184 .401 .056 5.452 .000

LNINVESTINC -.065 .035 -.014 -1.856 .063

LNTRANSINC -.134 .037 -.033 -3.592 .000

LNOTHERINC -.299 .034 -.076 -8.832 .000

NUMFT 20.315 .369 .665 55.100 .000

NUMPT 7.049 .312 .238 22.593 .000

RPWEEKPT -.510 .013 -.292 -37.799 .000

HHSIZE -5.338 .365 -.254 -14.617 .000

age_4 4.819 .555 .098 8.680 .000

35

age_17 5.018 .422 .172 11.898 .000

senior -.404 .394 -.012 -1.025 .306

RPAGE -.236 .035 -.150 -6.784 .000

Degree 1.857 .449 .035 4.133 .000

Disable -4.844 .549 -.068 -8.823 .000

SPAGE .102 .034 .066 3.019 .003

SPDEGREE -2.205 .462 -.040 -4.777 .000

SPDISABLE 2.882 .564 .040 5.109 .000

Male 7.965 .403 .163 19.781 .000

City .676 .463 .012 1.460 .144

NL -1.458 .828 -.018 -1.761 .078

PE 1.976 1.080 .017 1.830 .067

NS -.108 .862 -.001 -.126 .900

NB .891 .822 .011 1.084 .278

QC .093 .796 .001 .116 .907

ON -.002 .740 .000 -.002 .998

MB .738 .856 .008 .863 .388

SK -1.023 .830 -.012 -1.233 .217

AB -.118 .819 -.001 -.145 .885

BC .689 .804 .008 .857 .391

In the OLS results the wage variable is not significant. With the opposite income and substitution effect mentioned in the literature, it is not surprising to see that the wage parameter is not significant in this dataset. In this study we can argue that wage rate does not affect the number of full time weeks a worker work in Canada.

In terms of the economic variables the number of full time weeks increases with the expenditure requirement of households, number of full time earners and the number of part time earners. It is unclear why the number of earners will affect the number of full time work weeks. It will be interesting to research this finding in the future. The number of full time weeks decreases with all other non-labor income. In other words, when households receive more monetary transfers from either their investments, their governments or other sources, they are likely to work less full time weeks.

As for the demographic variables, the number of full time weeks increases with the number of child dependents, but decreases with household size. When a family has more young children, they will need to work more to raise their family. However, when the household size increase (and the increased family members are adults), the results show this decreases the number of weeks an individual works full time. In terms of personal characteristics the regression result shows that the number of weeks working full time decreases with the respondent’s age and if the respondent is disabled. However, having a university degree or being male increases the number of full time weeks. It is also evident that if one spouse is older or if one spouse is disabled, their partner tends to work more. One interesting finding is that as long as their spouse have a university degree, people will work less full time weeks.

The last hypothesis deals with geographical effects. In this analysis only the provinces of Newfoundland and Prince Edwards Island are significant. In other words the other two Maritime provinces (New Brunswick and

36

Nova Scotia) are not statistically significant than the rest of Canada in terms of the number of full time weeks worked. Surprisingly, the results for Prince Edward Island and Newfoundland are opposite. Workers from Newfoundland tend to work less full time weeks whereas those from Prince Edward Island tend to work more full time weeks in a year. The finding about PEI is contradictory to the descriptive statistics shown in Chapter 1. Despite a significance level of only 0.1, it suggests that the demographic or economic situation in the province of PEI may be quite different from the rest of Canada. Our results indicates that, under the same economic and demographic situation, the regional impact in PEI will in fact make workers work more full time weeks. Future studies need to be conducted to examine this special effect found in PEI. 6. Conclusion and future research The paper examines the determinants for the number of full time weeks worked among Canadians. It is argued that there are four different types of factors that may affect hours worked, namely wage, economic, demographic and geographic factors. Using the Canadian Survey of Household Spending in 2010, an OLS regression was employed. The wage factor is not significant, but most other economic and demographic variables are proven to be important determinants of the number of full time weeks worked.

The geographical analysis is an important component of this study; descriptive statistics show that all four Maritime province workers work less than the national average in terms of full time weeks. However, a regressive analysis shows that only two of the provinces in the Maritimes are statistically significant. Those living in Newfoundland and Labrador are working less full time weeks whereas those living on Prince Edward Island are working more full time weeks under the ceterus paribus condition.

Future research may include an analysis of why the number of earners in the household can increase the number of full time weeks worked. It would be expected that the number of earners should decrease the number of work weeks needed, but such was not the case in this study. Future research needs to shed more light on this finding. Moreover, one puzzling finding is that living in the province of Prince Edward Island has a positive effect on the number of full time weeks worked. This is a surprising finding and more research is needed to identify potential reasons or the rationale underlying this fact. References

Booth, A. L., & Van Ours, J. C. (2009). Hours of Work and Gender Identity: Does Part‐time Work Make the Family Happier?. Economica, 76(301), 176-196

Borjas, G. J. (1980). The relationship between wages and weekly hours of work: The role of division bias. Journal of Human Resources, 409-423. Cain, G. G. and Watts, H.W. (1973) Income Maintenance and Labor Supply: Econometric Studies. Chicago Cha, Y., & Weeden, K. A. (2014). Overwork and the slow convergence in the gender gap in wages. American Sociological Review, 0003122414528936. DaVanzo, J., DeTray D. N. and Greenberg, D (1976). The sensitivity of male labor supply estimates to choice of assumptions. Review of Economics and Statistics, 313-325 Gicheva, D. (2013). Working Long Hours and Early Career Outcomes in the High-End Labor Market. Journal of Labor Economics, 31(4), 785-824. Masters, S and Garfinkel, I (1977) Estimating the Labor Supply effects of income Maintenance Programs. New York: Academic Press Moffitt, R., & Nicholson, W. (1982). The effect of unemployment insurance on unemployment: the case of federal supplemental benefits. The Review of Economics and Statistics, 1-11. Scandura, T. A., & Lankau, M. J. (1997). Relationships of gender, family responsibility and flexible work hours to organizational commitment and job satisfaction. Journal of Organizational Behavior, 18(4), 377-391.

37

Business Analyses

Living and Working in China: One Person’s Experience

Scott M. Wheelwright, PhD*

Working overseas provides many opportunities for personal and professional growth, however, challenges

abound and success is not assured. I have been fortunate to work in China now for five years and though at

times life has been extremely stressful, overall the benefits have outweighed the problems. My experiences

are closely connected with the history of the two companies I have started here, Innovent and Complya.

Innovent Biologics is a biopharmaceutical manufacturing company developing drugs for the treatment of

cancer and other diseases. The company has a six-hectare site with buildings exceeding 900,000 square feet in

area, though only a portion of these are occupied by the 120 current staff. Founded in 2010, Innovent was

originally funded by the venture arm of the financial services firm Fidelity Ventures.

For the past 30 years I have worked in the field of biopharmaceutical manufacturing and quality assurance.

Pharmaceutical products, by which I mean prescription drugs, are classified into two groups, based on how

they are made. Most drugs that we as consumers take are what we refer to as “small molecules” and are

made by synthesis of various chemicals to give the desired compound, such as aspirin or ibuprofen. These

drugs are called small molecules because each molecule has a mass equal to about 150 – 200 times the mass

of hydrogen. (We refer to this as the molecular mass; the unit of mass equivalent to one hydrogen atom is

called a dalton, after the English chemist John Dalton, 1766 – 1844.)

In contrast, many of the new drugs developed by biotech companies are proteins with molecular masses of

150,000 to 200,000 daltons, which is 1000 times larger than aspirin, comparable to the difference in scale

between a golf ball and a basketball. Proteins are not chemically synthesized in reactors, but are produced in

cells that have been modified by making changes to their genes to enable use of the cellular processes to

efficiently produce these large molecules. Some of these proteins are a type known as monoclonal antibodies,

and are produced in genetically engineered animal cells. These cells are complex organisms that require highly

specialized manufacturing facilities for their culture and for purification of the resulting proteins. Collectively,

these protein products are referred to as biopharmaceuticals, to distinguish them from small molecule

products made synthetically, which are referred to as pharmaceuticals.

Many of the miracle drugs of recent years, such as Herceptin® for the treatment of breast cancer and Humira®

for the treatment of arthritis, are such monoclonal antibodies. The facilities for manufacture of these

products are specialized and expensive to build, which is one of the reasons why these drugs are priced in the

tens of thousands of dollars for a course of therapy.

After working for 20 years in the industry for companies such as Abbott Laboratories and Scios (now part of

Johnson and Johnson), I became a consultant in 2004. Most of my clients are companies interested in

ensuring the quality of drug manufacturing facilities and compliance with US and European regulations for

manufacture of these products. Known as Good Manufacturing Practice and abbreviated as GMP, these rules

are laws promulgated by governments to ensure the quality of drugs that are sold within their borders.

* Owner, Complya Asia

38

Sometimes a client is an investment firm conducting due diligence on a potential investment. During one such

trip to India, while in discussion with the investor, the topic of biopharmaceuticals in China came up. The

investor was interested in investing in biopharmaceutical manufacturing capability in China, but though they

had looked around the country, they had not found anything with the quality of facility or management that

met their standards. So as any good opportunist would, I suggested we build the facility ourselves.

Thus was born the idea for Innovent Biologics, which when completed will become the largest and most

modern facility in China for the production of biopharmaceuticals. A partner at the investment firm and I

wrote the first business plan, which after many revisions was accepted for funding and Innovent began

operations, with myself as COO and two colleagues who joined me.

So far we see several points that all successful companies share: a good idea, with good timing, and sound

financial backing. A large part of the success that Innovent has achieved is due to the efforts of the investment

team, which had spent many years in China developing relationships with government personnel.

Relationships are crucial in China, and time spent cultivating personal rapport is important. There is no

substitute for time spent in activities together. In China this usually consists of elaborate dinners, a non-

Chinese company can invite visiting Chinese executives to baseball games, deep-sea fishing and other group

activities. However, when government officials are involved, there are other issues that we will discuss later.

Competition is wonderful because it quite often leads to lower prices and better quality. This is also true in

government-run business parks. Each city in China has multiple industrial zones that try to attract new

businesses to locate in their areas and bring tax revenue and employment to their cities. These industrial

parks compete against each other to provide incentives in the form of reduced or deferred taxes, rent, and

training support, in much the same way communities in other countries compete for new businesses to locate

in their areas.

In China the government owns all property and companies obtain a ground lease that enables them to hold

the property for a fixed number of years (typically 50 or 70 years for undeveloped land). This means the

government has an added incentive they can offer in the form of free or deferred rent on the land.

In the case of Innovent, the investment team had developed relationships early with key business parks in

multiple cities. Innovent was able to obtain an incentive package from the industrial park where they located

that included deferred payments on rent and also included other incentives related to their manufacturing

facility. The package Innovent received was due in large measure to the relationships developed by the

investment team.

A note of caution should be made at this point regarding relationships with government personnel. In the US

the Foreign Corrupt Practices Act (the FCPA), and in other countries similar laws targeting bribery, are strictly

enforced and a potential minefield for foreigners working in China. Payments to government officials that are

outside the normal requirements for transacting business may be considered bribes and may be subject to

federal prosecution, including hefty fines and prison sentences. This is of particular concern in my field of

healthcare, where most doctors in China work at government owned hospitals, which makes them

government employees. Gifts to doctors of travel fees or training sessions may be construed as inappropriate

payments.

39

The example of Innovent brings to our attention another common situation in China: the government is

always your partner.

I worked in India for six months in 2008, where I participated in the construction and startup of a

biopharmaceutical facility. That experience, which was perhaps the most difficult work experience of my

career, taught me that each country has unique work practices, which must be learned and applied to be

successful in that country.

Between the time of writing the first edition of the business plan for Innovent and actually founding the

company, I moved to China to learn Chinese business practice. At the time I was a consultant working from an

office in California. As most consulting work is done through the telephone, email and the internet, I kept my

consulting clients, but moved my office to China. This enabled me to easily attend industry conferences and

meetings, to work on consulting projects in China, and in general to gain exposure to Chinese business

practices before being thrown into the challenge of building a company from scratch.

I had also previously lived and worked in Japan, where the business card holds a special place in business

practice. While in Japan I acquired the habit of collecting and preserving business cards from everyone I met.

So when I moved to China I kept up the practice of maintaining folders of business cards. I quickly observed

that in China half of the cards I obtained were from government personnel. Nowhere else I have worked is the

government so involved in the lives and operations of business. The advantage is that knowing the right

person may help to obtain answers to questions. The disadvantage is that business may not always need (or

want) the government involved in what we are doing.

Working for a company such as Innovent, though attractive in many ways, was not at all like being a

consultant, which I enjoy particularly for the variety of projects and the absence of personnel problems. So

even though Innovent provided many opportunities for growth, including the design and construction of a

large-scale biopharmaceutical manufacturing facility, I returned to consulting. In the meantime I had

remarried, and as my wife was from the Chinese city of Suzhou, I decided to stay in China and build a

consulting practice here.

Suzhou is a ‘small Chinese city’ of around 11 million people about 70 km west of Shanghai. By high-speed rail

Shanghai is about 30 minutes away, making travel to visit with clients an easy day trip. However, compared to

Shanghai the rents in Suzhou are about half. A large part of Suzhou is dominated by the Suzhou Industrial Park

(SIP), the second largest industrial park after that in Tianjin. Suzhou is a very easy place to live as a foreigner,

even if one’s Mandarin is only at the beginner level. We have good taxi, bus and subway transportation, with

railway lines connecting us directly to Shanghai, Nanjing, Hangzhou, and Beijing.

When I first travelled to China twenty years ago I learned one of the most important words anyone can know

in Chinese: fapiao (发票). A fapiao is an official government receipt. Only official receipts can be used to claim

an expense on taxes (or to contest a taxi charge).

Setting up a small private firm offered additional experience in navigating the Chinese bureaucracy. The first

thing I needed was a lawyer, of which there are many qualified who speak English well. Following up on the

referrals of a few friends who had recently started small businesses brought me a qualified professional.

However, since there was no company yet, I could not obtain a fapiao from the lawyer for the initial work.

40

I also needed an assistant who spoke Chinese, as mine is almost non-existent. But unless you have an

incorporated entity, you cannot hire someone. Fortunately, there are recruiting agencies that can hire

someone and that person can be sent to you on assignment. Once your company is incorporated, you can

transfer the employee from the agency to your firm.

The actual process of incorporation varies not only from province to province, but from city to city, and within

each city, from borough to borough. So even though I had decided to incorporate in Suzhou, the rules of

incorporation are different in Suzhou Industrial Park (SIP) than in Suzhou Old District or in Suzhou New District.

Differences include the amount of founding capital needed to incorporate and the time it takes for

incorporation. In SIP I was told it would take about three months, though it actually took about six months. I

have been informed it is now possible to incorporate a new business entity within one month.

My consulting firm, Complya Asia, focuses on helping clients in China and elsewhere in Asia to meet

international GMP requirements for manufacturing. We also assist foreign clients to manage projects here,

such as sourcing from reputable vendors or performing contract research and development. It is much easier

to manage a project in China with a local project manager who speaks the language and is in the same time

zone.

In addition to the benefits of challenging work in China, there are other personal benefits. Though my children

are adults and only visit for short times, I have several expatriate friends who have brought their families to

China. They learn Chinese and develop a greater appreciation for their home countries by experiencing the

culture of China. Living and working in China has given me enriching business experiences and many long

lasting friendships. I could not have foretold I would be living an international life, but there is little I would

change about how it has unfolded.

41

Doing Business in Foreign Countries

Klaus Steven, Diplomkaufmann*

“In my China experience everything is possible if you are talking to the right people.”

I have lived and worked in China for more than ten years. Currently, I am in charge of 2 factories

with over 3,000 employees and more than 250 million Euro in annual business. My studies were in

Automotive Engineering with additional qualifications in Technical Business studies. My

apprenticeships in logistics and back office management provided a basic knowledge of modern

manufacturing enterprises and their financial organization.

For the next nine years after graduation I followed my career within the Siemens group, a major,

diversified multinational supplier to the automotive and power industries among others. My

responsibilities for finance and accounting management evolved from being Department Head

reporting to the factory’s CFO to serving as CFO and new Project Leader reporting to the head office

CFO. During this time I worked in several German cities, two Chinese cities and the Czech Republic.

In 2003 I was asked to settle in Huizhou, a city in Guangdong province in the south of China. I was

the CFO and Executive VP and one of my main tasks was to plan and supervise a new factory making

radio and navigation systems for OEMs and to integrate the newly acquired company into Siemens

processes and standards. Working with a Joint Venture partner [70-30] I worked together with a

young manager from the JV to plan the build with a set budget and timeline.

Chinese businesses are much quicker to invest in buildings than German ones - we build when we

have orders, whereas Chinese firms build when they see potential. Most notable were the vast

differences in building standards between China and Europe. For production facilities in emerging

markets Siemens expects a ‘Golf class’ building standard, not a ‘Mercedes S class’ facility. The JV

partner found this a high standard, considering that most modern Chinese factories are expected to

last no more than 10-15 years rather than the 100 year duration common in Germany. Once

expectations were understood the JV went ahead to secure all of the government permissions

required, Siemens signed a 5 year lease and we began production on time and budget.

My next project was another new factory build in the Czech Republic. After my previous experience

in Huizhou, European processes were predictable but slow. Unlike China, Czech regulatory

requirements were non-negotiable. Since this factory replaced production from British and German

installations, the experience of having to discuss compensation with more than 100 laid off

employees added to my dissatisfaction with this project. The lesson learned was that executives

who down-scale or close factories do not make for good work partners and they are frequently not

helpful to the overall good of the company.

*CEO, Suzhou Bordnetze, China

42

My last year with Siemens was a return to China as CFO. Reporting to the CFO in Germany, I ran an

industrial drive factory with full responsibilities for profit & loss, purchasing and local sourcing,

finance and controlling. I exceeded all targets for performance and improvement by significant

percentages.

After 10 years with Siemens Group I received an opportunity in 2008 with a mid sized, family owned

company, a component supplier to the heavy truck industry. Voss Automotive had no experience in

China and I took the lead role as General Manager in building up the company’s complete China

operation. This greenfield project in east China’s Shandong province required complex negotiations

with government to secure an ‘advantageous project status’ with its generous tax concessions.

Drawing on my technical experience in opening manufacturing projects and fully responsible for all

financial targets, the company made its first deliveries 9 months after approvals were complete.

Voss had sent an overseas Chinese as a bridge between Germany and China and who was to take

over as GM once the factory was finished. However, he he lacked knowledge of the Chinese auto

industry, refused to move near the factory and the local people refused to accept his leadership.

Like many medium sized western companies with expansion plans, Voss was hard hit by the credit

crisis in 2008. The company asked me to remain in place to run the operation in Jinan, however, this

wasn’t what I wanted. I was now a China specialist with a good understanding of local conditions,

the Chinese auto industry and its supply chains and was determined to continue using these hard

won skills.

By now I had a proven reputation for leading new projects, working with Chinese partners and a

sound knowledge of the structure and regulations of the Chinese auto industry. I enjoyed meeting

and working with different people from all over China, so I accepted a position with the First Auto

Works-Volkswagen, a 40-60 JV in Chanchun, North East China. The company manufactured front

and rear axles for the commercial truck industry. As head of finance and interim GM I introduced

new production technology and then prepared to open up a branch plant using this technology in

Chengdu, Sichuan province in Southwest China.

Again, we had our JV partner build the factory and I budgeted for a Chinese-German construction

consulting company to supervise the project and protect VW’s interests. Like Europe, there are large

differences in local habits and attitudes between the regions of China. In Guangzhou people were

ambitious, in Shandong relaxed and family oriented, in Jilin happy to work but passive and in

Sichuan uninterested in overtime work. Once built and in production, I was asked to stay on and run

the operations but believed doing that was another dead end. A second reason to move on was

VW’s refusal to offer global contracts to their Chinese management.

My 3 years within the VW ecosystem gave me an inside look at at their decision-makers and the

standards needed to secure contracts as suppliers. Draexlmaier Group, a supplier of wiring

harnesses to VW in Europe, wanted to win VW business in China. I defined a strategy for them,

presented a suitable Chinese JV partner and designed the organization for the business unit. The

43

company would not agree that having a local company as a partner was necessary and has still not

succeeded in booking any business in VW’s largest market.

To continue my career as an expert in new factory development I joined Suzhou Bordnetze as the

CEO of the factory in Wujiang in East China. I was able to secure the existing business as a supplier to

Shanghai VW and am in complete charge of setting up a new factory in Changsha. In 2013 China’s

slowing economy and its push to develop cities in the interior of the country led to excellent

conditions and incentives for foreign investment. I scouted 3 possible locations in the city’s

development zones and during negotiations achieved excellent results. The new factory will be the

only supplier of wiring harnesses in the region and will provide product to the new VW auto plant

scheduled to open in 2015.

When I first arrived in China in 2003 automobile production was less than a million vehicles/year; in

2014 China produced more than a million/month.

For me China is the the most interesting industrial country on earth. I am lucky in that my wife

shares my enthusiasm for living and working here. Like Germany after the war, China is experiencing

its own ‘Wirtschaftswunder’ (Economic Miracle). China has a continuing need to improve from

cheap labour production to an environmentally responsible, technology leader with its own

international brands. My target is to enable these goals to increase the value added production for

the companies I represent. I enjoy being part of China’s rise to a prosperous future for all of the

people I work with. I suspect I’ll remain here for a long time.

44

EASTERN DIGEST

Call for Papers - Volume 1 Number 2

Eastern Digest provides an overview of topical economic and social issues relating to China and Asia. Eastern

Digest is a forum for scholarly and practice-based discussions about contemporary Asian issues.

Eastern Digest is a quality refereed/peer reviewed journal for theoretical, analytical and practical research in

the following fields of interest:

Economic growth and trading relations Politics and inter-government relations Culture, culture exchange and culture change Globalization and the rise of Asia North America - Asia diplomacy Worker migration Immigration and population growth Corporate responsibility

Essays (<6,000 words), articles, reports, reviews and case studies can be emailed to research@icar-inst.com

for possible publication in Eastern Digest. Contributions should be sent in Word or RTF formats. Please avoid

complex formatting as much as possible. Include short author biographies on a separate page with your

submission.

For our Guide to Authors visit www.icar-inst.com/Research-Publication

EASTERN DIGEST

Volume 1 #2

Appel d’articles pour publication

Eastern Digest est une revue académique et professionnelle qui couvrira des thèmes économiques et sociaux

relatifs aux mondes chinois et asiatiques. La revue Eastern Digest est un forum de dissémination pour les

chercheurs et les professionnels sur des thèmes contemporains relatifs à l’Asie et à ses relations avec le reste

du monde.

Eastern Digest est un trimestriel dont les articles sont soumis au scrutin des experts des domaines touchés. Le

champ d’intérêt couvre :

Développement Economique et relations commerciales Politiques et relations inter-gouvernementales Culture, échanges culturels et changements culturels Globalisation et la montée de l’Asie Diplomatie Amérique du Nord-Asie Migration des travailleurs Immigration et population Responsabilité sociale de l’entreprise

45

Les articles soumis doivent être dans l’ordre 6000 mots. Ils doivent être envoyés par courriel à research@icar-

inst.com pour examen et publication dans Eastern Digest. Les contributions doivent être en format Word ou

RTF Si possible, évitez les formats complexes. Soumettez avec votre article une courte biographie de l’auteur

dans document séparé.

Le Guide pour Auteurs est disponible à www.icar-inst.com/Research-Publication.

EASTERN DIGEST 征稿

征稿--第 1 期第 2 季

Eastern Digest 涉及亚洲和中国的热门及最新经济和社会现象。Eastern Digest 提供一个当代亚洲时事学术性和实践性探讨平台。

属同行评审高质杂志涵盖理论性、分析性及实践性研究，诸如下列：

Economic growth and trading relations 经济发展与贸易关系

Politics and inter-government relations 政治与政府间关系

Culture, culture exchange and culture change 文化、文化交流与互换

Globalization and the rise of Asia 全球化与亚洲崛起

North America - Asia diplomacy 北美-亚洲外交

Worker migration 工作人口迁移 （流动）

Immigration and population growth 移民与人口增长

Corporate responsibility 企业责任

期待投稿：文章（6000字以内），商务分析、报告、评论及案例分析邮件至research@icar-inst.com。形式要求：WORD 文档或RTF 格式。投稿时请单独附上作者简介。Eastern

Digest接受英语、法语和法语投稿。

具体要求请访问：www.icar-inst.com/Research-Publication

OH BUSINESS AND CONSULTING SERVICES OH 商务与咨询服务

Wherever You Are Located and Whatever You Plan to Do for Business, Education and Tours

Contact and Make Us Your Bases in New Brunswick CANADA and CHINA. Make Your Business Trips and Pleasure Journeys Easy and Joyful. We Provide Continuous Services and Support For Our Customers.

为我们的客户提供永续服务与支持。

WE OFFER/ 我们提供：

INTERNATIONAL BUSINESS DEVELOPMENT SERVICES 国际商务发展与支持服务

Assistance in seeking and developing international

markets; or sourcing raw materials and semi-finished

goods from global suppliers; and train your in-house

staff on all export / import activity from inception to

completion.

INTERNATIONAL ETIQUETTES 国际礼仪与文化培训

PERSONAL DEVELOPMENT COACHING AND MENTORING

个人发展辅导与启导

CONSULTING AND TRAINING 咨询与培训服务 Develop in-house global program; Assist in establishing export and/or import department(s) and offer training on all practical aspects necessary to the operations of the company based upon their immediate needs & goals; mentoring program for owner’s, management and staff.

（亚洲背景）培训与咨询证书

CALL/ EMAIL us BEFORE, DURING and AFTER your trips.

邮件：haiyan.qiu@icar-inst.com or bk.vaswani@icar-inst.com 电话：+86 18862150959 (China) +1 5068578619 (Canada)

Visit: 304 Mountain Road, Moncton, E1C 2M1, New Brunswick, Canada/ R 2-10014, No. 1398 Suzhan Road, Gusu District

Suzhou, China (Opposite Suzhou Railway Station) 中国苏州市姑苏区苏站路 1398 号 2 幢 10014 室 （苏州站斜对面）

1

An ICAR Publication

ISSN 2368-7231 (Print)

ISSN 2368-724X (Online)

© 2015 ICAR

www.icar-inst.com