Tsinghua University: The "MIT of China"

By Patricia Mohr@

It is easy to see why people call Tsinghua University the “MIT of China.” It is not the oldest university in China, but it is the most elite and most prominent. Tsinghua (pronounced “Ching-whah” and also called Peking University) attracts the best and brightest students from China and from around the world.

It is a destination for U.S. and other visiting diplomats. The week after our delegation of some 30 graduate students visited the university, U.S. House Speaker Nancy Pelosi paid a visit, as did a delegation from Harvard Kennedy School.

We arrived on campus early one Thursday morning in May 2009. It was striking to see that not only is the campus impressive thanks to its beautifully landscaped gardens and modern buildings, the surrounding urban area is also eye-catching. It is located in a high-technology business center—a Silicon Valley of sorts. And that’s not a coincidence. The university sponsors the neighboring Tsinghua Science Park, which houses and supports Google, Sun Microsystems, Procter and Gamble, and the Beijing-Tsinghua Development Institute. The area is what some analysts would call a high functioning “eco-system” that fosters groundbreaking research and development. Tsinghua’s sophisticated science and technology research department drives innovation for its corporate partners, and its university graduates provide ample talent for company recruiters.

We met the assistant dean of Tsinghua’s School of Public Policy and Management upon our arrival and we gathered around a large rectangular table in a meeting room.  Our hostess, the assistant dean, wore a sharply tailored designer dress and spoke in impeccable English, which sounded more polished than my own English.

The history of Tsinghua is unlike that of any university I can imagine. Like China itself, it has transformed itself many times since its founding. It was started with seed money from the United States as a preparatory school for studying in U.S. universities. It became a polytechnic school in 1952, following the country’s founding and a nationwide restructuring of higher education under Mao Zedong. After China opened its economy to the world in 1979, the university founded additional schools, including economics, management, science, humanities, social sciences, and law.

As our host delicately explained, the university has tried to recover “disciplines that were lost.” More striking than that is what she did not say: Tsinghua University was at the center of the violent and disruptive Cultural Revolution. The Red Guards held their first meeting on the campus at the start of the revolution in 1966, and the university was shut down between 1966 and 1970.

Economic Strategy

We next met a faculty member who spoke to us through a translator about China’s economic development strategy. Dr. Yu Yongda said the Chinese have long debated the differences between comparative advantage theory and competitive advantage theory. He argued that the first theory—comparative advantage—does not work for developing countries like China. The problem with comparative advantage, Yu said, is that it enables developed countries to become more developed while backward countries become more backward.

Yu said China can achieve economic growth by using its comparative advantage in producing low cost goods. Its labor is cheap; its land is on average one-tenth the cost of U.S. land; its environmental expenses are one-sixth the cost of those in the United States; and energy costs businesses a third of what it costs U.S.-based companies. China has a clear cost advantage. But, Yu said, the current economic system also produces clear disadvantages: overcrowding in the cities, social problems, and environmental damage. The bottom line, Yu said, is that China cannot become a developed country using the current comparative advantage model. It needs a new strategy. It needs to think beyond GDP growth.

“What is the final objective of development?” Yu asks.

Yu’s solution is to move up the economic value chain by relying on a new economic theory he calls “Advantage Integration.” The idea is that to achieve sustainable growth, China must rely upon more than just physical and financial capital. It must integrate foreign talent, technology and knowledge into its own tapestry of industry, infrastructure, government and educational institutions.

“Just look at the U.S. example,” Yu said, emphasizing that U.S. companies have been able to integrate high quality talents from all over the world. International integration and exchange and the keys, and campus visitors are part of the solution, Yu said. “By being here, you are integrating your advantages with China.”