BEIJING - On March 9 and 10, many Chinese families were disappointed. It was on those two days that American private high schools announced their admission results for foreign students.
For those who have just been through the one to two year enrolment process that includes cramming for tests, sending application forms and recommendation letters, visiting schools and taking interviews, a negative result can be devastating. This year has been the worst year yet for middle class Chinese families hoping to send their children to private high schools in the U.S.
In the last five years, the number of Chinese children trying to get into prep schools in the U.S. has soared from just a few hundred to nearly 10,000. Meanwhile, school quotas for foreign students haven't changed, so it's getting increasingly difficult for Chinese children to get into American schools.
"Last year a good student could still obtain three to four positive results whereas this year they would be lucky to get just one," says a consultant with a Chinese agency specialized in studies abroad.
"Gaoshen," the Chinese expression for "applying to an American high school," is the biggest trend for China's middle class.
There are currently 23,795 Chinese teenagers in private high schools across America – not counting the ones who applied and failed.
The small – and only – hotel of Lakeville, Connecticut, was packed with Chinese parents and teenagers in February, during the Chinese New Year holiday. They were there to take the oral test a well-known prep school. After talking together, the anxious families came to the same conclusion – gaoshen is a road of no return.
Most of the Chinese students enrolling into U.S. schools are excellent pupils, who are willing to work hard to fulfill their dreams. However, once they decide to apply to study abroad, they have to spend less time on their studies and more time on learning English and cramming for standardized tests and admission interviews. Meanwhile their current Chinese high schools have to be informed that they are enrolling overseas, so that they can provide recommendation letters for them. If their applications fail it's devastating for these children – not only are they embarrassed about not getting in, but they have to work twice as hard to catch up and prepare for their Chinese high-school and college exams.
Some families prepare for gaoshen by sending their children to international schools in China early on. However, since these schools have a totally different curriculum than Chinese schools, their students are definitively shut out from the Chinese education system and from taking college entrance exams.
Other families hedge their bets and enroll their children into U.S. universities after they have completed high school in China. The risk is that they face fierce competition from their Chinese peers who arrived in the U.S. four years earlier and attended a prep school.
To avoid all these issues, some families do not hesitate to send their children abroad from an earlier age, so that it will be easier for them to get into elite prep schools and prestigious universities.
Over the past few years agencies specialized in assisting Chinese families in the gaoshen process have boomed. Most of them do not call themselves intermediaries but educational consultants.
Whereas in developed countries education counseling is a proper profession where councilors understand the school system and get to know the children so that they can provide a tailored service, very few Chinese educational consultants have ever gone to school in the U.S. or understand the American education system. They often describe themselves as “teachers,” but they are really salesmen – whose job is to sell English lessons and cramming programs.
An “education consulting” fee can cost as much as 40,000 Yuan ($6500) in a popular agency. The main revenue sources of these agencies are the various cramming courses they offer.
Fortunately, Chinese mothers who have been through the whole gaoshen process like to share their experience and advice online. Some of them have even started ranking the top U.S. boarding schools online.
Chinese-Americans have also picked up on this great business opportunity and have also launched specialized services aimed at helping Chinese students get into top private schools.
The difference between the Chinese and U.S. prep schools is that the latter attach greater importance to nurturing their pupils in the American culture, sense of responsibility, behavior and manners. "The focus of American education is to cultivate students' interests in knowledge and the ability to learn knowledge. It aims to foster multiple talents with independent thinking. This is what quality education is about," Wu Xiaohui, principal of the Michael Academy, near Washington D.C. told the Economic Observer.
It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money but the simplest of errors exposed the scam and limited the damage to investors.
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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