Duke's venture into Kunshan, China falls apart

Before I start my principal essay of the day, here are the kind of numbers FC is famous for. Both appeared in Duke PR releases:

-- 12/4/2010 "The city of Kunshan is funding the construction of Phase 1 of the campus -- an investment that would cost about $260 million in U.S. dollars if it were built in Durham." The Chronicle editorial this morning uses that number, hyped as it is.

-- 9/30/2010 "Duke's $650 million campus under construction in Kunshan, China."

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Fact Checker has to hand it to our #1 PR man. Michael Schoenfeld's press release after the Trustee discussion of the Brodhead Administration's debacle in Kunshan had a spin that made it look as though we were on top of our game: words like "reviewing progress" on a "strategic objective" that was "extending Duke's programs to better serve an increasingly interconnected world." Yes, he split the infinitive.

In reality, this entire initiative is chop suey.

✔ 1) Almost a full year after President Brodhead conducted an elaborate signing ceremony with Shanghai Jiao Tong University, the deal is dead. Duke's press release says the institution, which Duke has been bragging about, is unwilling to serve as the "legal partner" required in China. Why this is bubbling up now, and not earlier, is not known. We will return to the scramble to secure a new marriage in a moment.

✔ 2) Loyal Readers, our deal with the city of Kunshan for a new campus apparently isn't what Brodhead once said: a free ride with the city paying for all construction and then paying to run the campus for five years -- including electric power which was specified. Duke's international vice president Jones had to ask the Trustees last weekend for $5.5 million to cover planning, construction and oversight. Moreover, as Jones told the Academic Council last Thursday, he will go back to the trustees next February to seek an operational budget of $1 million a year. Strapped for cash, Duke will have to dip into the principal of its endowment for the money.

✔ 3) Time after time, administrators have waffled on the date when we could take occupancy in Kunshan. As documented below, Dean Nowicki once put the date as August, 2010. Duke Magazine (for alumni) reported last fall we'd move in in 2011 -- and hardly had this ink dried when Jones started to talk about 2012. Talk about it, yes. Explain it, no.

✔ 4) And Jones revealed to the Trustees that the Chinese require an undergraduate program as well as the planned Fuqua Business School offerings. It's not clear why this is just bubbling up now either, but Duke is going to try to fudge it, trying to get by with 50 students or so in programs leading to certificates in global health and entrepreneurship.

OK let's take this step by step.


January 21, 2010: Brodhead is in China, his second trip to the country, no doubt fulfilling the promise made after his first visit in June, 2006 to return every year or two.

This was his first visit to Kunshan, not surprising since it is a backwater (core city, 300,000) with no university, no airport, only one hotel with any stars which is to say only one where he could step and retain any self respect (others with stars that you may see are in the lake region, far from the city itself.) After a program of song and dance on a stage worthy of a Hollywood set, Brodhead (not yet calling himself Uncle Dick) joined his Chinese university counterpart at a long table fronted with scarlet bunting, the staffs of little flags of the US and China crossed in front of them.

You can still watch video of the drama on the internet. Any moment, you expect Obama and Wen Jiabao.

With great ceremony, the legal papers in special folders are signed with memorial pens and exchanged, and then everyone steps from the stage, gets a silver shovel, and turns the first earth for construction.

The failure of this deal has to be a major embarrassment for Brodhead. It is his signature product, his legacy.

We search desperately for a new partner. The Chinese government has set a deadline: March, 2011. FC list of school's to watch: Fudan University, Tsinghua University or the Cheung Kong Graduate School of Business. As Jones acknowledged in a fall interview with Duke Magazine (for alumni), prophetically, "..anytime that something like this doesn’t work, you take a reputational hit. Once we establish a commitment that we’re going to be engaged somewhere, it becomes incumbent on us to do everything possible to make sure that it will work effectively..."


There's an old Chinese proverb: "We flash the money, American educators come running."

Dukies first heard the word Kunshan on the morning of April 16, 2009, in an unusually long and detailed Chronicle article about aspirations of the Fuqua School of Business. Never mind that Fuqua's profitable business of running corporate education programs was tanking (FC uncovered the specifics later, sales plummeting to $47,011,200 from $81,046,560 the year before.) Never mind that Fuqua was even reduced to hawking rooms in its Dave Thomas conference center (yes named for the Wendy's guy; he was Fuqua's next door neighbor) to tourists as a bed and breakfast, $99 for 2 people. And never mind that Fuqua had dropped millions by charging into other international partnerships, the list led by the Goethe-University Frankfurt Faculty of Economics and Business. Plus the London School of Economics. Plus an announced agreement with the Indian Institute of Management in Ahmedabad that was aborted during the first trimester in favor of a vague deal with two alumni in India.

The Chronicle said Fuqua was finding an explosive interest in its revamped Cross-Continent MBA Program, a gimmick that the newspaper did not detail nor question at all: students would shuttle to five leading cities around the world, well six if we include Durham, put in 60 days total and combined with "distance learning" get an MBA in 16 months. Tuition: cash, no scholarships, no loans, $120,100 plus travel costs. FC dubbed it "Duke on $2,000 a day."

"With applications mounting," we were told in the first Chronicle words, Dean Blair Sheppard expected to enroll at least 180 students in the program's first class, and hoped to grow to 280 students per class, "a goal Sheppard said he is confident will be reached by the second year," that is, the current 2010-11 academic year.

Turns out, applications weren't mounting at all, but lagging, lagging badly and for the first year, Shep had only rounded up 2/3rds of the students he sought. Not 180 but 120. And most of them were Americans, robbing the program of its intended international flavor. We have never been able to find out anything about the board scores or other qualifications of the students.

No worry. Shep promised 280 students in year two, which is to say the current year. This promise was made with full understanding of world economic conditions.

Guess what. Now that we are in year two, Fuqua has made no announcement of enrollment, but an enterprising Deputy Fact Checker got an admissions officer to say there were around 140, half of the goal.

With Fuqua setting the pace, and unspecified other divisions of Duke to follow, the focus for all this intellectual ferment was to be Kunshan, with the city covering, as the Chronicle put it, "all construction and operating costs for the facilities," Phase One in six buildings on 200 acres, precisely twice the size of East Campus. When tuition paying students arrive, it's all gravy for Duke, as "the University will not share a portion of the revenue with the city."

Yes all this with only one Duke commitment: to send perhaps 140 Fuqua students to the city for 9 days a year! (This was later expanded to 16 days a year, to include orientation formerly scheduled for London, where Duke was having its own embarassing problems and holing people up in a London Bridge hotel far from the city's business district.)

Kunshan? Shep explained it was "just outside of Shanghai."

Well not quite. The distance between Shanghai's international airport and Kunshan, is the same as between Durham and Winston-Salem.

Ah, so, our administrators told us, there's a high speed railroad, takes only 20 minutes.

Well not quite. The Chinese have been experimenting with a Shanghai - Nanjing link, called the RMB 146. A conventional train hit 302 miles an hour on the tracks a week ago. Modified trains have hit 357 and 362 miles an hour. It's possible to catch one, but most of these super-trains will whisk by the South Kunshan station -- south of the city -- without even whistling.

20 minutes? The high speed train begins its route at the newly opened Hongqiao Railway Station. From People’s Square on Metro Line 2, it takes about 35 minutes to reach the new railroad. It takes far longer from other locations in teeming Shanghai, with its 17 million people.

Brodhead chimed in that Kunshan enjoyed one of the highest per capita incomes in China. Half of the world's notebook computers, he said, are built here! Lots of other electonics too. Lots of flat panel TV's, not to mention LED electric bulbs.

All that's correct so far as it goes; it neglects that its very success is beginning to cause the demise of the city.

A quarter century ago, as the electronics age dawned, Taiwan became one of the world's outsourcing manufacturing centers. It prospered.

As wages grew, the sharks in Taipei running companies like Compal and FoxComm discovered they could hire workers for one-tenth as much in "mainland China." Yes, one-tenth as much pay. These available workers -- in huge waves -- were mostly young, in their early 20's, leaving farms and rural life, seeking more fulfillment in a city.

Compal and FoxComm picked Kunshan because trucks could be loaded with new computers, driven to ships on the East China Sea, and for the return trip, filled up with empty cardboard boxes (a principal US export) and driven back to Kunshan -- all in one day.

Now two factors are clouding the picture.

Compal -- maker of 38 million laptops last year, 23 percent of the world's total -- is looking further inland to find cheap labor. Forget Kunshan.

And now the other giant FoxComm.

Last June 7 -- as Duke's VP Jones, Supreme Dean Nowicki and other Duke administrators visited an empty hole in the ground in Kunshan to try to visualize what might occur there -- thousands of workers in a nearby rubber factory clashed violently with para-military police. As the AP reported ten days later, "...workers have begun demanding significant wage increases and showed far less tolerance for harsh work conditions than their predecessors did only five years ago."

FoxComm requires its workers to put in six 12 hour days a week. Its workers must live in bleak compounds next to their factories, which are surrounded by barbed wire since the city is a high crime nightmare. In Kunshan and elsewhere, the company was hit last spring with a rash of suicides by employees who could not tolerate these conditions.

The company's response: all employees in Kunshan were asked to sign a pledge that they would not commit suicide. And the company put up safety nets, like those used by trapeze artists at a circus, all around its high-rise dormitories. Soon after, a woman jumped -- killed when she missed the net and instead became impaled on a steel support for it.

On his return to Durham, Jones said our delegation was not aware of the strike. Mindful of the way Duke students confronted segregation in Durham decades ago and poor working conditions in sweatshops turning out University clothing more recently, Fact Checker wrote VP Jones to ask if he saw Duke students on the Kunshan campus engaged in such local issues.

We still await his answer.


In its first mention of Kunshan on April 16, 2009, the Chronicle quoted Sheppard
saying construction would begin in August, 2009.

The next we heard was on December 4 -- precisely a year ago -- when the Trustee winter meeting rolled around -- and the breathless PR people said Duke would send a delegation to Kunshan in January to "break ground," adding "the facilities would be ready for occupancy in 2011."

In January of this year, as noted above, when Uncle Dick went to Kunshan (saying very little about the city, but praising lake country north as beautiful), Duke PR flooded editors with pictures of the "ground-breaking." Behind Brodhead was a huge sign declaring the "cornerstone ceremony."

Six months later, June 16, the Chronicle -- without bothering to tell us about the other deadlines -- reported on a visit to Kunshan by a coterie of Deans trying to figure out what to do with the facility. Oh that's not what the official announcement said; but that's what it meant.

Steve Nowicki allowed that -- as the Chronicle put it -- "construction is set to begin soon."

Huh? Soon?????

And in an apparent contradiction, Nowicki said "The University will use the (Kunshan) facilities for the Global Semester Abroad program beginning next semester," a reference to undergraduates and August, 2010.

And the biggest laugh was in the Chronicle headline: "Chinese city prepares for opening of Duke campus."

By the time October rolled around, Jones, without ever wincing, had advanced the occupancy date to 2012.

Fact Checker, curious about the shifting sands, wrote to PR VP Schoenfeld, who dodged by saying site preparation and utility work was underway. When pressed, Schoenfeld snapped back, "Buildings need foundation, utilities and infrastructure before the “steel and stone” go up, unless you’ve come up with a new process. So the answer is yes, construction has started."


Two generations ago, when Duke had another Yale English Ph.D. named Douglas Knight as its foundering president, the Ford Foundation encouraged some promising universities to become regional centers of excellence. We went from that modest goal to "national university" with audacious ambitions under Terry Sanford. Nan Keohane incessantly referred to a "research university," and now Uncle Dick conquers the world, the "global university."

Dare not speak, however, about problems like academic freedom, in places like Singapore or Kunshan. Or some of the unsavory characters we are making deals with, like the sheik in Dubai.

Ralph Litzinger, an associate professor of cultural anthropology, is the only voice FC has heard on our campus. He calls the Kunshan plans “beautiful.” But he notes there are films that are banned, books that are banned, scholars who are censored.

“Will I be able to go onto the Kunshan campus and teach a contemporary ethnicity course that does an evaluation of the Xinjiang and Tibet protests? Will I be able to teach an environmental class that talks about how, in the developing world, community groups can organize against the state? Will I be able to use examples of protests in China? Will I be able to bring community leaders in China, people who work in labor and the environment and who are under surveillance by the Chinese government, onto the campus? These are the things that a lot of us are worrying about—just what the pedagogical experience will feel like on a campus like this. That’s assuming that this is going to be a campus where there really will be a critical liberal-arts education.”

Brodhead has only talked of "trade-offs" in international deals.

✔ In his first three months on the job, VP Jones travelled to Kunshan, Singapore, India, South Africa and Brazil which was “a kind of discovery process of learning what’s going on, what the opportunities are, what the needs are, what the challenges are.” We do not know about Inchon, South Korea, which had been reported dangling a deal like Kunshan.

FC expects many more Kunshans, triumphs and failures, meaning plenty of work for currrent and future Fact Checkers.

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