Jerry Zhao, a senior at a local high school affiliated with Fudan University in Shanghai, is a good student and would most likely do well on next spring’s Gao Kao, the entrance examination for Chinese universities. But instead, Zhao has another plan and is applying to a star-studded lineup of institutions not at home but in the U.S., including Yale, Stanford, Columbia, University of Chicago and Massachusetts Institute of Technology.


Assuming that plan goes well, he will be one of some 200,000 Chinese students going to universities abroad next fall. In 2009, China sent 98,150 students to the United States alone for their undergraduate degrees, according to the annual Open Doors report published by the Institute of International Education, a U.S.-based non-profit. Only India, with 103,260, sent more freshmen to U.S. universities. Other countries on the wish lists of Chinese students include Canada, the United Kingdom and Australia.


As the number of Chinese students looking to attend universities outside their country grows, one of the most obvious repercussions is the arrival of a new cottage “education management” industry. A network of “agents” and counseling services – some above board, others not — have now been set up across the country aimed at educating university applicants and their families about the strengths and weaknesses of particular universities, while also addressing the potentially sticky cultural challenges of being a foreigner. “It’s a booming business,” says Lucia Pierce, an American college counselor with a boutique startup called Shanghai Education Consulting Associates, who works with about 25 Shanghai high school students each year, including Zhao.


But the push for overseas university educations is part of a larger trend affecting kids like Zhao, who make up the tail end of “Generation Y” youth born between the 1980s and the mid-1990s, according to Nandani Lynton, a management professor at China Europe International Business School (CEIBS) in Shanghai. No other generation in Chinese history has received such high-quality education for so many people,” she wrote in a BusinessWeek blog earlier this year. “Chinese Gen Ys are single children born under China’s one-child policy…. These single children have grown up in traditional extended families (including four grandparents and two parents), under pressure since kindergarten to pass entrance exams. This means that the child’s educational performance has been a top priority for six adults.” In other words, there’s a lot riding on a single university degree.


Call of the Wild


Part of the reason why Zhao and so many of his peers want to study abroad is a straightforward matter of supply and demand. The aren’t enough university places in China to meet demand, says Shaun McElroy, a high school counselor at Shanghai American School and vice president of the non-profit trade body Overseas Association for College Admission Counseling. Last year, nearly 10 million high school students took the Gao Kao, in the hope of getting one of 6.2 million university places available at China’s 792 universities. (There are also 1,239 junior colleges and 316 independent academies that are monitored by local governments or institutions rather than the Ministry of Education.) In the U.S., by contrast, with more than 3,500 accredited colleges and universities, there is “excess capacity,” says McElroy.


Another factor is quality, perceived and real. The Academic Ranking of World Universities (ARWU) published by Shanghai’s Jiao Tong University puts U.S. universities in 35 of the top 50 positions. Using six criteria, including the number of alumni and staff winning Nobel Prizes and Fields Medals, and the number of highly cited researchers, the ARWU has the top Chinese university, Peking University, falling within the 151-to-200 band of its ranking.


Rankings are important in China. That’s not a surprise given how competitive China’s education system is, notes Jun Cai, a high school counselor at Pinghe High School, a private, English-Chinese boarding school in Shanghai. That starts at high schools, where the Gao Kao scores of students are a matter of pride, as are the actual schools’ rankings in national benchmarks. As a result, for most students and parents, the university rankings supplied by U.S. News & World Report magazine and others “are the only thing they know about U.S. universities,” Cai says.


Another reason for Chinese students’ growing interest in studying abroad: Chinese students see a western university degree as a ticket to a better job, with an opportunity to become fluent in a foreign language. What’s more, parents – and grandparents – now have the financial means to pay for most or all of their children’s degrees in countries like the U.S., where the average tuition plus room and board at a top 20 institution is about US$45,000 a year. That’s the case with Zhao, whose parents own a small business that supplies chemicals to steel manufacturers. Neither his mother nor his father went to university. He describes his family as “in good financial condition,” and plans to apply for scholarships and financial aid.


Making the Grade


All these factors create demand for new “education management” services, and in today’s China, entrepreneurs are always ready to meet demand. One such entrepreneur is Stanley Xu, a 1999 Wharton graduate who, with Yale graduate Brian Ong, founded Taurus Education International Group in 2008. Taurus is developing what Xu calls a “new model” of college counseling. It hires graduates of the U.S.’s top universities as counselors and offers courses to help with applications and prep work to get a place at a U.S. university.


Xu attended high school and university in Shanghai before studying in the U.S. and working in finance in New York, London and Hong Kong. When he returned to China to start a business, he says he “saw a business and a social opportunity” in education management.


Taurus has expanded rapidly. From five counselors and 21 clients in 2008, it met its initial goal of 200 clients earlier this year and now has 25 counselors. It has added to its flagship office in Shanghai by opening offices in Beijing, Shenzhen, Nanjing and Hangzhou, and a new office in Chengdu is in the works. Students pay fees from US$6,000 and US$15,000 for six to eighteen months of preparatory study and assistance through the application process. Taurus has helped 91% of its students get places at the U.S.’s top 30 universities. With annual revenue of about US$1.2 million last year, “We’re doing pretty well,” he says.


Part of what drives the booming business for Xu and others is their help in addressing the differences between Chinese and U.S. education systems. For Chinese applicants not familiar with the U.S. application system, “the process can be just overwhelming,” says McElroy.


In China, the Gao Kao is the be all or end all for high school students applying to university. The three-day exam, administered once a year, is more or less Chinese universities’ only admissions criterion. It is considered so important that cities close streets and halt construction projects during the exams to reduce noise levels and outside distractions. In contrast, U.S. and other western high school students face different admission criteria. Not only are they are expected to have good grades and SAT scores, they also need to develop a curriculum vitae of outside activities, including volunteer work, club memberships, and extra-curricular sports or musical activities.


While language is another big consideration, that barrier is relatively straightforward to overcome with diligent study and — like Zhao — a steady diet of western movies growing up. “My accent is from Hollywood,” he says. But fluency in a language can mask over cultural differences that can come as a surprise even for students like Zhao, who spent his junior year as an exchange student at the Landon School, a private all-boy high school in Bethesda, Maryland.


Lynton of CEIBS says the similarities between kids in the west and the rapidly westernizing Chinese kids are generally “superficial.” This can affect how Chinese students cope with their new lives while abroad. For example, the professors found that in a new environment, Chinese “Gen Ys” emphasize the development of new friendships “while western respondents focus almost entirely on the new aspects of a novel environment and the emotions arising from the experience.” Their other research has found that Chinese Gen Ys, like their parents, place great importance on harmony, family values, and groups and relationships over individualism.


Chinese exchange students at western universities often find these values challenged, say experts. U.S. professors expect students to be independent — not only intellectually but also in terms of time management. “A lack of self-management is noticeable among Chinese students,” Xu says. “In China, [the educational system] is all tailored for you. Students [when they reach the United States] struggle to manage their time and course loads.” Speaking up in class, offering alternative points of view, even challenging professors are also alien for Chinese students, many of whom have gone to school in classes with as many as 50 students, making individual participation next to impossible, Xu adds.


But the difference goes beyond classroom sizes. “Chinese students don’t think about why,” says Pinghe High School’s Cai. “They are not taught to be critical thinkers and they don’t challenge their teachers a lot.” That becomes apparent when it’s time to prepare their applications for a foreign university, which often require writing self-confident statements about themselves. Chinese high school students “are afraid of talking about themselves and speaking out,” she says.


To bridge this gap, advisory businesses are beginning to put just as much emphasis on helping students prepare for what to expect in foreign lecture halls and campuses, along with larger cultural aspects of living abroad as they are on the more technical aspects of the application process. Taurus has been developing what Xu calls “supplementary education,” expanding preparatory courses and encouraging students to take part in extracurricular activities and community service. Taurus is opening an after-hours school in Suzhou, near Shanghai, with a longer-term plan of opening a full-service school.


The pipeline of Chinese students looking to study abroad is likely to continue to expand. U.S. universities, for example, have been looking to increase the diversity of their student bodies and have been sending admissions officers on recruiting trips to China for several years now. The Chinese government is doing its part as well. Since 2001, its Ministry of Education has sponsored annual education expos in Beijing, Shanghai and other cities to bring together Chinese students and university recruiters from western countries. That suits outward-looking kids like Zhao just fine.