Washington Week: Student Voices (O)

China grants Yale access to market
By Chip McCorkle
The Daily Princetonian (Princeton)
05/08/2006

(U-WIRE) PRINCETON, N.J. — Buried amidst the diplomatic gaffes and protests that marked Chinese President Hu Jintao's recent visit to the United States was the news that the Chinese government has opened its domestic market to Yale University's $15 billion endowment.

The Chinese Securities Regulatory Commission added Yale to its Qualified Foreign Institutional Investors, an exclusive list that consists of 40 foreign institutions allowed to invest in China's highly restricted "A-shares" securities market. "B-shares" are already open to foreign investment, though they are considered less attractive than their more controlled counterparts. Yale is the first foreign university granted access to A-shares.

The move could signal that other universities, including Princeton, are in line for similar offers in the future.

The Chinese economy has exploded in recent years, logging a 10.2 percent growth rate in the first quarter of 2006.

Officials at the Princeton Investment Company, which manages the University's endowment, declined to comment on the University's prospects for receiving the nod.

Economics professor-emeritus Gregory Chow said in an email that "from the viewpoint of being able to invest a part of Princeton's large endowment in Chinese assets for the purpose of diversification, having the same privilege as Yale would be desirable."

But East Asian Studies professor Perry Link expressed concerns about the possibility of accepting such an offer from China, particularly if it were extended in the same way as it was to Yale.

"By far the most common complaint that ordinary Chinese people have about their government officials is 'corruption,' " Link said in an email.

"Fiction and popular jokes are full of stories about how the Chinese elite uses its political power for economic advantage and uses economic power to buy political favor," he said. "When Hu Jintao offers special market access to Yale in return for Yale's red carpet to Hu Jintao, he is inserting the same corrupt subculture into New Haven."

Link co-published "The Tiananmen Papers," a collection of official Chinese government documents from the 1989 Tiananmen Square massacre. The Chinese government has since prevented him from entering the country.

Chow, however, rejected any notion that the Chinese government would be influenced by individual professors' relationships or viewpoints.

"Princeton as a university does not have a relationship with the Chinese government nor vice versa," Chow said. "Some faculty members are more involved with China and the Chinese government than others. Some faculty members are more positive about China and/or the Chinese government than others."

Link, too, seemed unconcerned by this possibility.

"If Yalies are thrilled, let them be," he said. "Princeton is better off taking the position, together with China's common people that trading money for political favors is wrong."

Asked about China's poor human rights record, Yale's assistant director of public affairs Gilda Reinstein stressed that "we are aware of what's going on in the world," but declined to comment specifically on Link's criticism.

"Yale has a strong concern for human rights," she said. "Yale is an open university, with room for a wide range of opinions and positions. While the university as an institution was delighted and welcoming [of Hu], there certainly were individuals and faculty who felt otherwise."

Why Yale

It didn't come as a surprise that Yale was the first university to be chosen for this offer, Chow said, since there has been "a long tradition of relationship between Yale and China."

Yale's ties to China date back to 1854, when Yung Wing graduated from the university to become the first Chinese person to receive a postsecondary degree in the United States.

The relationship remains close today. China currently sends more students to Yale than does any other foreign nation, the New York Times reported. Yale also offers 80 different exchange programs with Chinese universities, and Yale president Richard Levin has visited China four times since 2001 to meet with government officials.

Princeton, by comparison, "has become more cosmopolitan only in very recent years," Chow said. "Yale, Cornell and Harvard had more international and especially Chinese students as a fraction of the total student body than Princeton for a long time."

Nonetheless, Chow did not see the University's late-blooming internationalism as a roadblock to being added to the QFII. "The Chinese will allow Princeton to invest if it's in their best interests," he said.

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