STEVEN KUO: SA lacks knowledge of Asia and its possibilities

I have just returned from an Asian business development trip to Singapore, Beijing, Shanghai and Hong Kong with the executive education team of the University of Cape Town Graduate School of Business. We spoke to 10 elite business schools and discussed trends, issues and co-operation with the deans, programme directors and directors of internationalisation.  

The Covid-19 lockdowns had put an end to our Asia business drive, so we are rekindling old friendships and starting new ones. The trip was brilliant; Asian business schools all recognise the importance of the emerging African market and are keen to develop partnerships. It was also fascinating for us to exchange views on the business of business education.  

My view on why the Chinese economy has not rebounded as fast as many analysts expected is that international business’s confidence in China has been seriously damaged by its Covid-19 lockdown policies.  

Business confidence is a fragile thing. Businesses invest their energy and resources in places where they feel there is the highest likelihood of returns. Harsh lockdown policies and US-China political tensions have seriously damaged business confidence in China. 

Chinese and Hong Kong business schools tell us they are still feeling the effects of the lockdowns. Singapore schools say they’ve benefited. For South Africans, the lockdowns are already a distant memory, but the multilayered international relationships Chinese and Hong Kong schools worked so hard to build are in tatters.

Not yet a year after opening, their deans and programme directors report that they are still scrambling to rekindle old relationships with US and European schools. Exchange visits, especially study tours involving 30 or 40 MBA students, take months to arrange and things are not yet back to normal.  

To add fuel to the fire, China-US geopolitical tensions mean visas for US academics coming to China and Chinese students wanting to study in the US have become more difficult to obtain. Friends in Hong Kong tell us the protests in 2019 and 2020 and subsequent Covid-19 lockdown have done lasting damage to Hong Kong’s reputation as an international hub for education, finance and related services.   

Business schools function as a market for information exchange. Students, academics and business practitioners come together to discuss and exchange ideas and expertise. Whereas economists can calculate the effect lockdowns had on combined factory output, it is harder to quantify the damage caused by geopolitical tensions. Once trust and confidence are damaged, they are difficult to repair.  

Hong Kong business schools tell us they saw a drop in international student applications because of the protests and lockdowns. It was not hard to leave Hong Kong during Covid-19, but returning meant three weeks stuck in a small room, and few wanted to do this. On the bright side for Hong Kong, more mainland Chinese students are applying to study there because they are struggling to get US visas. In fact, the demand for business education by mainland Chinese students is so large that even Singapore business schools are now offering MBAs and executive MBAs in Mandarin.  

While Hong Kong and Singapore business schools do not lack applicants, they are concerned about the reduction in the diversity of their student cohort. After all, the value proposition of an MBA is peer learning and the alumni network. It defeats the purpose for Chinese students to go abroad to sit in a classroom where all their classmates are Chinese. 

Over the years I have lamented SA businesses’ tendency to focus on the traditional markets in Europe and the US, even though East and Southeast Asia are now the centre of global trade. Compared with other African countries, SA sends relatively few students to study in China, and as a result there is a dearth of expertise on China in SA. Our business executives tend to have a very superficial understanding of China and Asia as a whole.  

The business schools, and I imagine all East Asian businesses, are hedging their bets on whether the China-US tensions will be resolved. Business schools in Singapore and Hong Kong are beginning to set up programmes targeting Southeast Asia, and they tell us Africa as an emerging market is of great interest to their students.  

I believe it is a matter of time before Southeast Asia and China replace the US and Europe as SA’s largest markets and sources of investment. It is important that SA businesses invest in the capacity to prepare for this.  

• Dr Kuo is adjunct senior lecturer in the University of Cape Town’s Graduate School of Business.