How much should a Tsinghua graduate be making?

Shuli Ren, Bloomberg

It’s post-graduation season in China. Tiger Moms are naturally comparing notes on the salaries of fresh alumni from top universities. What kind of return might they expect, after spending years — and sometimes a fortune — demanding academic excellence from their offspring?

A doctor friend told me recently that her son got a job at Huawei Technologies Co., considered one of the most prestigious employers in China. The young man studied computer science at Tsinghua University and then Brown University in the US. Huawei is starting him at 400,000 yuan ($55,689) a year, the parent beamed.

Is my friend’s son getting paid too little for this kind of resume? Tsinghua is synonymous with status in China, counting among its famous alumni President Xi Jinping and his predecessor, Hu Jintao. It churns out fewer than 10,000 graduates a year, about the same as Harvard. Plus, large US technology companies are offering astronomical amounts to Chinese talent. Meta Platforms Inc. recently poached AI researcher Ruoming Pang from Apple Inc. with a $200 million package. Pang went to Jiao Tong University, a top engineering school in Shanghai.

After some research, I conceded that the Huawei package is fair. A Tsinghua graduate with three years of work experience can expect to make 238,188 yuan on average, according to Zhaopin Ltd., an online recruiting services platform. About one-third are working in tech, and most would boast at least a master’s degree as well. Of the class of 2022, only 10% entered the job market with a bachelor’s degree. Their peers overwhelmingly chose to further their studies.

As China’s “engineer dividend” starts to pay off, big employers seem less willing to offer steep premiums for elite diplomas. Companies like Huawei routinely recruit at so-called Project-985 schools, which refers to the country’s 39 top universities. But candidates are on the same starting line once that threshold is cleared. Some might end up making millions of dollars a year, but they must prove themselves first.

After all, the various tech breakthroughs that China has experienced this year show that innovation can pop out of anywhere. The chief executive of Manus, which captured the attention of investors with autonomous AI agents that help execute sophisticated tasks, studied software engineering at Huazhong University of Science and Technology in Wuhan. The founder of humanoid robot startup Unitree Robotics, who earned Beijing’s acclaim for making machines agile enough to dance and perform kung fu, went to a local university in Shanghai. That’s not a 985 institution.

Beyond those working on deep tech, soft skills, such as teamwork and the ability to deepen client relations, matter more to on-the-job success than academic excellence. Does a Tsinghua diploma signal high emotional intelligence? Not necessarily. It’s perhaps better that my friend’s son jumped onto the bandwagon while the job market still rewards his diploma with higher pay.

This begs the question of whether Tiger parenting and tormenting children with after-school tutoring lessons still make sense. Can the parent’s lifelong project generate positive net present value? Teenagers certainly dislike the academic race to the bottom. A 2016 study found that 40% of first-year students at the equally prestigious Peking University felt life was meaningless, and 30% hated studying.

For centuries, the traditional Confucian culture established a causal relationship between academic excellence and extreme success later in life. As China’s talent pool broadens and society becomes more diverse, that linkage is being shaken. A Tsinghua diploma is no longer so special.

Courtesy Bloomberg/Shuli Ren