The private-equity tycoon Stephen A. Schwarzman, backed by an array of mostly western blue-chip companies with interests in >China , is creating a $300 million scholarship for study in China that he hopes will rival the >Rhodes scholarship in prestige and influence.
The programme, whose endowment represents one of the largest single gifts to education in the world and one of the largest philanthropic gifts ever in China, was announced by Mr. Schwarzman in Beijing on Sunday.
The Schwarzman Scholars programme will pay all expenses for 200 students each year from around the world for a one-year master’s programme at Tsinghua University in Beijing.
The programme’s creation underlines the tremendous importance of China and its market to Wall Street financiers and corporate leaders, who have become increasingly anxious as security and economic frictions grow between China and the West.
Mr. Schwarzman said his goal was to reduce such tensions by educating the world’s future leaders, but his role in the project will also raise his political profile in China, potentially giving him and his >private equity firm, the >Blackstone Group , increased access to Chinese leaders. Many of them, including Xi Jinping, >who became President of China last month, attended Tsinghua, one of the country’s top universities.
Mr. Schwarzman said he was donating $100 million from his personal fortune, which Forbes estimated last month at $6.5 billion.
He said he had raised $100 million from donors, and expected to raise the remaining $100 million by the end of this year.
Many of the donors have sprawling business interests in China and frequently deal with government regulators and state-owned enterprises that have wide discretion over the activities of foreign companies.
The donors include Boeing, which is aggressively marketing jets in China, the world’s second-largest aircraft market, and Caterpillar, which sells earthmoving equipment in what has become the world’s largest construction market. They also include JPMorgan Chase, Bank of America and Credit Suisse, which provide financial services to the Chinese government and state-owned banks.
The personal foundation of Mayor Michael R. Bloomberg of New York is also a donor. Mr. Bloomberg’s media company is trying to lease more news and data terminals to state-owned banks, but it has been stymied by the government since the company’s publication last year of an investigation into the financial dealings of Mr. Xi’s family.
The scholarship’s advisory board is a who’s who of investors, diplomats and other influential figures, some of whom also have political or financial ties to China. It includes three former Secretaries of State, Condoleezza Rice, Colin L. Powell and Henry A. Kissinger; two former Treasury Secretaries, Robert E. Rubin and Henry M. Paulson Jr.; a number of university presidents and cultural figures, including the cellist Yo-Yo Ma; former President Nicolas Sarkozy of France; and the former Prime Ministers of three countries, Tony Blair of Britain, Kevin Rudd of Australia and Brian Mulroney of Canada.
Many large Western companies have been pressing for closer ties with China even as security experts warn about China’s military expansion and territorial claims, and many smaller businesses and labour groups warn that China seeks to dominate a wide range of industries.
Mr. Schwarzman said his concern was that as long as the Chinese economy grows two to three times as quickly as the American economy, and with European economies barely growing at all, tensions are likely only to rise.
“The idea was to deal with this problem in a generational manner,” he said in a video interview from New York, adding later in an e-mail, “I feel grateful to be able to have the resources to help change future leaders to impact their countries’ and China’s destinies.”
The programme plans to take in 10,000 students over the next 50 years, forming an international network that can bridge differences between China and the West, he said. Forty-five per cent will come from the United States, 20 per cent from China, and 35 per cent from Australia, Canada, Europe, Latin America and the rest of Asia. Africa may be added later.
The scholarship programme will not be Mr. Schwarzman’s first major foray into China, where private equity firms like his have been trying to gain entry. In 2007, as he was preparing to take Blackstone public, he sold a $3 billion stake in the company to the >China Investment Corporation , the country’s giant >sovereign wealth fund . The deal stirred >controversy in China when the value of the stake plunged, along with most stocks, during the global financial crisis, drawing vehement criticism among some Chinese. Chinese leaders brushed off the concerns, and the stock has since nearly recovered when dividends are included.
Mr. Schwarzman said his scholarship programme had nothing to do with Blackstone or the China Investment Corporation. “This is a private thing by me, it’s not a Blackstone initiative,” he said.
Mr. Schwarzman, 66, got his start at Donaldson, Lufkin & Jenrette, an investment bank later purchased by Credit Suisse. Except for a brief stint in the Army Reserve, he has spent most of his career at two Wall Street giants: Lehman Brothers, whose sale he led in 1984, and then Blackstone, where he is chairman and chief executive. On taking Blackstone public in 2007, he received $4.77 billion when his stake was converted to stock.
His name is also attached to the main branch of the New York Public Library on Fifth Avenue, which was renamed for him after he >pledged $100 million in 2008 , which he has since donated.
To match Rhodes
When it begins in 2016, the Schwarzman scholarship programme will match the 111-year-old Rhodes in the number of students and the size of its endowment.
The Rhodes endowment is worth about $203 million, according to its trustees. It awards grants to 83 scholars a year, who typically study at Oxford for at least two years though some stay on to complete a doctorate, said Dr. John Hood, a former vice chancellor of Oxford who is the chairman of the Rhodes trustees. About 200 scholars are on stipend at any one time.
Cecil John Rhodes, a British colonialist who made a fortune in South African diamond mines, established the programme in 1902 to bring scholars to his home country, the leading imperial power of the day. Mr. Schwarzman will be sending scholars largely from the industrialised world to study in a less-developed country that is seen as a rising world power.
The programme will be housed in a new facility at Tsinghua, Schwarzman College. Ground breaking is scheduled for late this year, with a design by Robert A. M. Stern, dean of the Yale School of Architecture.
Students will live in pods of eight bedrooms with a common living room, a design taken from the executive education program at Harvard Business School. The building will also include 12 residential suites for the dean, director and visiting faculty; a two-story forum resembling the one at the Harvard Kennedy School; an auditorium; and four classrooms.
Areas of focus
The programme will offer master’s degrees in public policy, international relations, economics, business and, later, engineering. It will start each June with a summer-long immersion programme in Chinese culture and issues, and an introduction to Mandarin, followed by a full academic year of courses at Tsinghua. David Daokui Li, a prominent economist at Tsinghua who is the dean of the new scholars programme, said the university already offers a third of its courses in English, and more than half in subjects like business and economics. Coincidentally, the ivy-garlanded Tsinghua University was founded in 1911 with foreign money: the United States chose not to accept part of the indemnities promised by China after the Boxer Rebellion, a nationalist uprising against foreigners that ended in 1901, and instead channelled the money to education.
While Mr. Schwarzman said that his main goal was to promote understanding between China and the rest of the world, he acknowledged another, more personal, motive.
When he was a senior at Yale in 1969, he was turned down for a Rhodes scholarship and advanced to finalist but did not win a two-year fellowship at Cambridge. He ended up going to Harvard Business School and Wall Street instead.
“I didn’t get any of those, and wanted one,” he said.
Now that he has created his own international scholarship programme, he said, “Maybe even I might have been selected if I were back at Yale in 1969.” — New York Times News Service
