Is the purchase of a US college by a Beijing company a sign of the times?
Chinese companies are increasingly looking to the American education system for new acquisitions, it has been reported. This is in part due to opportunities from colleges which are making a loss and need a business to turn things around.
The latest acquisition, reported by Bloomberg, is that of Westminster Choir College, a classical music conservatoire at Rider University, New Jersey.
The college has been purchased by Beijing Kaiwen Education Technology Co for $40mn.
This company was up until weeks ago called “Jiangsu Zhongtai Bridge Steel Structure Co”, but Chairman Xu Guangyu does operate some schools in China, and has connections to the Arts, making this a slightly less confusing area of interest for a steel company.
Westminster College has been operating for nearly 100 years but since 2015 it has reported losses of just under $11mn. In November, the economic outlook for the whole of Rider University was downgraded to negative by Moody’s.
Rider University has responded to critics of the move by saying the sale of the college was the best way to keep it open.
Xu has stated he hopes Westminster College will be able to provide knowledge to help upgrade arts education for students at the schools he already operates. It is also hoped that exchange opportunities will be offered for Chinese students.
Xu, who was previously a choral singer at Peking University, has pledged not to cut budgets or staffing, and added: “They can set up our entire music curriculum and bring all kinds of exchange opportunities. It’s pretty difficult to find these musical resources.”
The move could therefore benefit students in China whilst also keeping a failing US institution afloat – but is this a sign of wider problems or bigger things to come?
In January, as Bloomberg reports, Standard and Poor’s downgraded the entire US Colleges sector to negative outlook. According to the National Center for Education Statistics, a total of 66 higher education institutes closed in 2015-16.
Other Chinese companies to have bought American colleges have included Ambow Education Holding Ltd, which purchased Bay State College in Boston, and Hong Da Financial Holding Ltd which took a 51% stake in Dowling College, Oakdale, NY, which filed for bankruptcy in 2016. The new majority stakeholders intend to open up the college to Chinese students.
Ambow stated that is was “excited” about the purchase and CEO Dr Jin Huang added: “The investment in Bay State College aligns perfectly with our growth strategy and creates tremendous value in our effort to address the rising demand for studying abroad and the pursuit of international career opportunities among Chinese students.”
Huang also said that the company would continue to look at opportunities in “high-quality US colleges”.
Dowling College’s Oakdale Campus was purchased as a whole by NCF Capital, with Hong Da being the main shareholder, but the situation is slightly different as Dowling closed as a college in 2016, and the company does not presently have permission to open it as an educational organisation.
While these acquisitions will doubtless create much-coveted opportunities for Chinese students, whether corporations with little experience in US education will be of benefit to these floundering institutions remains to be seen.
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