China Universities Learn Capitalism

LIFE at the Beijing University Biology Department hasn't been the same since Chen Zhangliang took charge last summer.

The brash, young scientist with an American doctorate had already raised eyebrows when he achieved full professor, a title of particular eminence in China, at the ripe age of 28.

But three years later, when Mr. Chen strode over faculty outcry to become department chairman, he launched a shake-up that has rattled the staid, ill-paid academics and smug Communist bureaucrats burdening this struggling university.

In a free-wheeling interview at his university office, laden with the American jargon picked up during his graduate studies at Washington University in St. Louis, the lanky geneticist rarely sat still.

Dressed in a running suit and jogging shoes, Chen often bounded out of his chair to deal with frequent interruptions from colleagues, offer his five-page resume to visitors, or restage last July's triumph when he confronted an audience of hostile biologists and made his pitch.

"There was a huge crowd and all was quiet," Chen said in a near whisper. "I stood up and said, `Listen, you guys. I want to reform this department. And if at the end of one year, I can't make it, I'm out.... I need 80 percent of your support because I want to make our department into a company.... I want to change your salaries now. Anyone who works hard can make money.' "

Thus, with official blessing and capital, Beida Weimin Bioengineering Co. came to life and showed, to the relief of cash-strapped administrators, the delight of government economic reformers, and the horror of intellectual purists, that money can change a university.

Earning $300,000 in its first three months by selling biology department research to pharmaceutical companies, the company has become a cause cbre at Beida, as Chinese call the university, and made Chen the boy wonder of academic capitalism.

"We need reform, and to have reform, we need money," says the scientist who conceived his company while watching biotechnology stocks soar on Wall Street.

Such companies have become the watchword for universities struggling to make ends meet in an era of shrinking government grants and subsidies.

Beida has started nine companies, while about two dozen others are run by individual departments. Last March, the university pulled down a wall on the southern end of campus for a shopping center and placed a Communist Party official in charge of real estate and development.

University administrators openly seek foreign investors for new ventures and are cutting deals with Chinese enterprises and overseas Chinese and are pushing companies to recruit lucrative foreign students.

In the second half of 1992, departments at the University of Politics and Law set up 10 law firms and other companies, which are projected to net about $90,000 by the end of 1993. The funds are mainly earmarked to increase faculty salaries.

Chen Guangzhong, university president and a lawyer, bemoans the fact that he is turning into a fund-raiser like US counterparts, although China's troubled state enterprises are hardly hefty corporate donors.

"Personally, I'm not in favor of a university spending a lot of time in raising its own revenues," he says, "but I have no choice. I spend half my time doing this."

Turning lofty Chinese intellectuals into businessmen, though, is an uphill task. Despite official enthusiasm for campus business, many companies exist in name only. While Qinghua, China's preeminent science university, and science-related departments on other Beijing campuses are selling technological research, departments of humanities and social sciences limp along with few options other than to sell snacks or do tutoring.

"We were told last year that all departments had to set up companies," says a music professor at Beijing Normal University, where departments are required to pay two-thirds of their office expenses. "But many are just shells and not making any money."

Under the business push, many professors also are seeking second jobs or consulting work to augment meager salaries. The trend dismays many Chinese, who hold intellectuals in high esteem and were appalled to read reports last fall of a college teacher selling meat pies on the street.

The problem of pitiful salaries has become so acute that universities face the worrying exodus of bright young professors lured from academics by the fast bucks of China's emerging marketplace.

"This has already become a threat to the teaching quality," admits Mr. Chen, president of the University of Politics and Law.

At Beida, Chen, the biology chairman, bought out adverse professors, who earned an average $25 a month, by promising a $100 bonus a year after the company started and paying a $30 bonus when the company was officially launched. He also offered faculty an unheard of 66-cent premium per hour of teaching, triggering a scramble for class time.

The scientist then tackled streamlining of the communist bureaucracy in the department, which had 100 professors but 250 other workers. "I promised [workers] 100 yuan [about $10] per person as a bonus if they would stay home and sleep and keep their mouths shut." Fifty people took the offer.

Today, Chen's time is dominated by business deals rather than biology. A tireless self-promoter whom the Chinese government lured back from the US with promises of his own laboratory, he is pursuing joint ventures in Hong Kong and Japan and wants to publicly list his company.

As a member of China's rubber-stamp parliament, he is lobbying the government for land for a "city" of biotechnology enterprises and tax incentives for new enterprises. "The generation under 35 is coming up very strongly," he says, urging that Chinese students in the US return home. "We are in a position where in the future we can make this country move."