`Manhattan Ladies' Vie for Hong Kong School Slots as IPOs Boom
By Le-Min Lim
Students at the Canadian International School
July 12 (Bloomberg) -- Judy Carline helps expatriates settle in after they've transferred to Hong Kong. These days, she spends most of her time helping anxious parents who are trying to get their kids into international schools.
``This year is particularly bad,'' says Carline, a real estate agent at Savills Plc. There are more of ``these bankers, between 35 and 42, with young children. These days, people think their 3-year-olds are going to Harvard. The Manhattan ladies, they are the worst. They work themselves into a state.''
Hong Kong's booming economy and increased demand for English- language instruction from local Chinese parents have filled the city's international schools to the bursting point. The shortage is so bad that some employees have decided not to relocate to Hong Kong, says Lee Quane, Hong Kong-based general manager at personnel consultant ECA International.
``Those who reject Hong Kong are the ones with families,'' says Quane, 31. ``Pollution used to be the main reason, now education is coming to the fore.''
U.S. families face particular hassles. Hong Kong International School, or HKIS, the largest of three schools teaching a U.S. curriculum, has a waiting list of 630 for the fall term. The school, which charges as much as HK$157,100 (US$20,110) a year, has 2,600 places for students aged 4 to 18.
``The number of children on our wait lists is at historic highs,'' says school director Richard Mueller, 62. ``Demand has gone up dramatically since 2005 because more companies are adding staff or relocating to Hong Kong to tap China's economic growth.''
Expatriates Flee SARS
That contrasts with 2003, when an outbreak of severe acute respiratory syndrome, or SARS, killed 299 people in Hong Kong, causing expatriates to flee. International schools responded by admitting more local children, Mueller says.
Demand for English-language schools has increased since Hong Kong returned to Chinese control in 1997. Since then, three- quarters of the city's 414 secondary schools have been forced to switch their language of instruction to Cantonese from English.
About 70 percent of students at international schools are locals whose parents left Hong Kong in the 1980s and '90s and later returned, says David Dodwell, former head of a government education advisory committee.
Tracie Pangrazio started looking for schools in March 2006, 10 months before her family moved to Hong Kong from Singapore. While 12-year-old Ben immediately landed a place at the Australian International School, Matthew, 8, and Laura, 6, didn't secure spots until November.
``We didn't think schooling would be such a problem, and certainly not in a city like Hong Kong,'' says Pangrazio, 43.
Growing Economy
The rush for school places has grown with Hong Kong's economy. Companies raised HK$325.4 billion in the city last year, making it the biggest market for initial public offerings, ahead of London and New York, according to Ernst & Young LLP.
``While supply is expanding, they aren't keeping apace of demand,'' says Mark Michelson, an associate director at InvestHK, the city's investment promotion agency.
Hong Kong's government says there are plenty of spaces for expatriate students. The city has 35,900 places for expatriate students, only 85 percent of which are filled, says Bernadette Linn, deputy secretary at the Education and Manpower Bureau.
Those figures are misleading, says Jack Maisano, president of the American Chamber of Commerce in Hong Kong.
``Schools are not all of the same caliber,'' he says. ``Many are not where executives would send their kids.''
Hong Kong's first fee-charging international schools -- such as HKIS, French International School and Chinese International School -- were set up as non-profit institutions under British rule to serve the overseas business community.
Debentures
Since 1967, the government-subsidized English Schools Foundation has offered a cheaper alternative at 10 grade schools and five secondary schools. For-profit schools also provide an alternative, though facilities are typically more cramped.
Companies such as FedEx Corp. try to secure places by buying debentures issued by top schools. The certificates help schools raise money, while giving the holders priority in admissions.
``There's a long queue to get into the better international schools,'' says Winnie Chan, a Hong Kong-based FedEx human resource officer. ``That's why we offer debentures.''
Gwen Dahlberg, 43, paid HK$250,000 in 2002 for a debenture to help her daughter enroll at the Canadian International School.
While her 10-year-old daughter has since transferred to a school in a rural area of Lantau Island, Dahlberg says she's not selling the debenture. Canadian International's debentures, which now sell for HK$450,000 for individuals, are sold out.
``Knowing how competitive it now is to get a place at the Canadian International School, we thought we would keep the debenture as a security measure,'' says Hong Kong-born Dahlberg.
Ultimately, Hong Kong must add more international school places, says InvestHK's Michelson. That may require government intervention because non-profit schools rely on government land grants to expand. Such schools are mostly located in the city's most expensive neighborhoods and should consider opening new facilities in more remote areas, Linn says.
``This school situation is going to get worse, not better,'' says Carline of Savills. ``The government hasn't done enough to deal with this problem.''
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