China Real Estate Giants Now Investing in Harvard

Not content with buying buildings in New York or purchasing Picassos, China’s real estate moguls are now investing in Ivy League universities.

Harvard University announced on Monday that it is receiving a gift of “university-wide, interdisciplinary support” from Chinese property developer Evergrande Real Estate Group Ltd. The developer is owned by billionaire Xu Jiayin (Hui Ka Yan), who is said by Forbes to be China’s 13th richest person.

While no monetary figures were announced, the endowment is earmarked to fund the creation of the Harvard Center for Green Buildings and Cities at the Harvard Graduate School of Design, the Evergrande Center for Immunologic Diseases at Harvard Medical School and Brigham and Women’s Hospital, and the Center for Mathematical Sciences and Applications in the Faculty of Arts and Sciences. Evergrande’s funds will go to support programs, facilities, and a research endowment.

Despite the lack of a dollar amount, the magnitude of the programs being launched on the back of Evergrande’s donation suggests that the gift was quite large scale. Harvard confirmed that this cooperation with Evergrande was the first between a Chinese firm and specific departments at the school.

At US$30 billion, Harvard’s endowment is already the largest of any university in the United States.

Evergrande’s move is especially noteworthy given the poor philanthropic record of China’s super-rich. In 2010, when Bill Gates and Warren Buffett organised dinners for the Gates Foundation in China, dozens of billionaires were invited, but most declined out of fears of being pressed to make donations.

Buying Respect

While Evergrande’s donation appears groundbreaking, it may also be seen as part of an effort by a number of Chinese firms, particularly the country’s cash-rich real estate developers, to prove that they belong on the world stage.

During 2013, state-owned Greenland Group has bought projects in Australia, Los Angeles, and New York, while rival property company Dalian Wanda has started billion dollar hotels in London and New York (and also bought a luxury yacht maker).

Evergrande itself has some history of doing side projects to raise its profile, most notably through its Guangzhou Evergrande Football Club. In November, the club became the first Chinese team to win the AFC Champions League, thanks to the owner’s liberal spending on foreign stars such as Dario Conca, and coach Marcello Lippi.

Mirroring Blackstone’s Schwarzman

While Evergrande’s gift to Harvard may be a first, the gift in some ways resembles a cooperation established earlier this year by Blackstone Chairman Stephen Schwarzman with Tsinghua University in Beijing. Schwarzman made a US$300 million gift to endow scholarships for foreign students to study at the school.

Schwarzman’s gift was seen by many observers as a move to strengthen ties with China’s political leadership, many of whom are Tsinghua graduates.
Whatever motives Evergrande’s Xu has for his gift, he wasn’t telling much in the public statement from the school. In commenting on the programs that would be created through the donation, Xu said, “I believe in their unlimited potential, which will give impetus to the improvement of the world’s academic level and the progress and development of human society.”

Meanwhile I would guess that the fund-raisers for Xu’s alma mater, Wuhan University of Scienc and Technology, will be eager to get in touch about setting up a few new initiatives at their school.