UNIVERSITY VENTURES EAST

Among hundreds of international ventures, Duke Kunshan University has emerged as the tour de force in Duke’s global expansion movement.

Scheduled to open in July 2012, the University’s China campus has fueled steady conversation among faculty members, students and administrators since the project began to take shape in 2009. Although DKU has drawn criticism because of its potential risk factors, administrators who oversee the project remain confident that they are taking all the necessary steps to create a viable institution abroad.

Administrators took a major step forward June 20 when they submitted an official government proposal required to open an international institution in China, Nora Bynum, director of global strategy in the office of global strategy and programs, wrote in an email June 24. This proposal is an operational plan for both the construction and potential academic programs at DKU.

The proposal will first be evaluated by the Jiangsu Province Education Bureau—the province where the city of Kunshan is located, outside of Shanghai—before going to the Chinese Ministry of Education for final approval. The document was submitted several months later than administrators anticipated, as Duke originally expected to offer the proposal in March.

Duke administrators hope that the proposal will be approved within the next few months, Bynum said, adding that DKU campus development will continue while the approval is still pending.

“There is much to work on, in terms of academic planning, for example,” Bynum said. “Construction on the Phase One buildings and operational planning also continues.”

Administrators have noted that although the proposal could technically be rejected by the Chinese government, they are confident it will be accepted.

Although the Fuqua School of Business will be the first school to offer degrees at DKU—a Masters in Management Studies program to enroll students in 2012 and an Executive Masters of Business Administration to begin in 2013—academic planning is still in its early stages, said Fuqua professor Jeanette Song, a member of the DKU EMBA planning committee.

As a condition for building a campus in China, Duke was required to have a Chinese university co-sign its proposal. The University ultimately chose a “silent partner,” Wuhan University, which would act as a legal partner with limited involvement in academic planning at DKU.

Wuhan, however, does have interests which align with other areas of Duke, particularly the Duke Global Health Institute. The DGHI and Wuhan will soon move forward with an academic partnership, said DGHI Director Dr. Michael Merson, who also serves as the interim vice president and vice provost for the office of global strategy and programs. Merson replaced Greg Jones who stepped down from the position in June due to health reasons.

In China this month, President Richard Brodhead will sign an agreement between the Wuhan School of Public Health, the DGHI and the Duke School of Nursing. The partnership will allow for potential global health research collaborations and student exchanges between the schools, Merson said.

This also marks the first time Brodhead will meet with current Wuhan President Li Xiaohong.

“We’ve had conversations at many levels, but this is my first visit personally to Wuhan,” Brodhead said, adding that he is looking forward to evaluating the distinguished university on the ground.

Wuhan, however, was not Duke’s first choice for a Chinese partner. In a November 2009 presentation to the Academic Council, administrators announced that Shanghai Jiao Tong University would act as DKU’s legal and academic partner. That relationship fell through the following summer, however, after Shanghai Jiao Tong pulled out of the agreement, administrators said.

Brodhead announced in February that Wuhan would take over as DKU’s legal partner, though it would have fewer academic and administrative responsibilities than SJTU had under their original agreement.

Wuhan is not ranked on U.S. News and World Report’s top 400 world universities, though the list does include SJTU and seven other Chinese universities.

A financial risk

The cost of the DKU campus has also raised concerns as the University rebounds from the financial crisis, which caused the University to cut spending significantly during the past three years.

The city of Kunshan is fronting a majority of the costs for the campus’ construction, which would total about $260 million if it were to be built in Durham. Greg Jones, former vice president and vice provost of global strategy and programs, told the Academic Council last September that Phase One of DKU would cost Duke $11 million.

In March, however, Brodhead announced to the council that it will actually cost Duke about $37 million in operating costs over the first six years, with $10 million to come from outside donations and the rest to be funded by Duke funding sources. Kunshan will subsidize the operating costs by contributing $33.5 million.

Executive Vice President Tallman Trask told The Chronicle in March that operating costs for the campus could not be finalized until administrators can confirm student enrollment numbers and tuition price. He added that neither of those figures will be solidified until the DKU proposal is approved by the Chinese MOE.

According to a consultant report prepared for the University in December, Chinese students are likely only willing to pay a discounted tuition to attend DKU. Provost Peter Lange, also a member of the DKU board, said administrators anticipate that DKU’s expected tuition rate will be well received by the Chinese.

Song said one of the challenges the Fuqua degree development committees are facing is how to develop academic programs that will be sure to create revenue and offset DKU’s costs.

Paul Zipkin, R. J. Reynolds professor in business administration at Fuqua, said this issue of financial risk is the predominant concern among Fuqua faculty, another contributing factor in the delay of the vote to approve DKU’s academic programs. He said the University should expect to lose money initially with the confidence that DKU will be a profitable long-term investment, though added that this expectation is influenced by the fact that people cannot remember a time before the financial crisis.

“When you make big decisions, you should be thinking about the longer term,” Zipkin said. “And if we do not have the financial resources to weather a period of losses, we have no business doing it.”

The consultant report also found that Chinese students are concerned that DKU would not offer programs of the same quality as those of Duke’s domestic campus. Song noted that Chinese students might better understand the value of a DKU education once Fuqua begins to market its programs, which will also begin after the proposal is approved.

Merson added that Brodhead’s July trip to the region could raise awareness about the DKU venture among Chinese students and businesses.

“The president’s trip will highlight Duke’s status as a committed partner in higher education and research and will boost Duke’s brand in China,” Merson said.

An educational bubble

Duke, however, is not the only university hoping to enter the relatively untapped Chinese educational market and further themselves in the development of higher education.

Several American universities are building a presence within Chinese universities—unlike Duke, which is establishing an independent campus. For example, Stanford University announced in March that it is establishing the Stanford Center at Peking University in Beijing.

New York University, like Duke, announced in March that it is opening an independent Shanghai campus with East China Normal University as its legal partner.

A March 27 NYU press release called NYU Shanghai “the first American university with independent legal status approved by the Ministry of Education,” a title that many expected would be given to DKU.

“[NYU and its partners] both believe in being guided by nothing short of academic excellence,” NYU President John Sexton wrote in an email April 26. “We both believe this will be an enormously successful undertaking, and we both believe in the global network university idea and the advantages it will bring to students and faculty.”

There are, however, several significant differences between DKU and NYU Shanghai. DKU will cater largely to graduate students, whereas NYU Shanghai will be an undergraduate school. Chinese nationals will also be the primary pool of students at DKU, but NYU Shanghai plans to enroll a balanced population of Chinese, American and international students.

Brodhead said China is partnering with American universities because it wants to model its educational institutions after successful U.S. schools like Duke and Stanford.

“Their deepest interest is in having Duke come demonstrate its education model—they want to understand how it works,” Brodhead said. “It’s a great kind of partnership where what someone else wants is to have you be good at who you are.”

Although it might seem as if there is a bubble of American educational ventures in China, Michael Schoenfeld, vice president of public affairs and government relations, said there will always be a strong global need for quality higher education.

He added that Chinese officials are particular about their partnerships—so, many prospective ventures might not succeed.

“Realistically, China and other countries are very careful about what’s let in, and there is a lot of talk but not a lot of action,” Schoenfeld said. “You have to be deliberate, you have to be patient. That’s all to the good because it weeds out speculators and shadier characters.”

Zipkin said the relationship between Duke and China will be a particularly viable one because DKU will offer specific business programs desired by Chinese students.

“If [Duke] comes into China, you can offer [education] as a luxury good—if you don’t, other people will figure out a way to do it,” he said. “I think that’s really important for the future of Duke and the future of America because China is going to be important—I don’t think there are any doubts about that.... A prosperous, healthy China is much less dangerous to us.”