One for the Rhodes

"Schwarzman scholarships" have many beneficiaries

Steve Schwarzman is giving something back - to China. The Blackstone founder is contributing his name, and $100 million of his private wealth, to kick-start a scholarship programme at Beijing's Tsinghua University. The programme may not be entirely philanthropic: China lost much more investing in his buyout firm's initial public offering. But there will still be many beneficiaries if the scheme helps Western and Chinese elites understand each other better.

Like the Rhodes Scholarship that inspired it, Schwarzman's scheme will fund the brightest and best to study overseas. In this case, the $300 million programme will select some 200 "Schwarzman Scholars" from the United States, China and other countries to spend a year studying at Tsinghua. Whereas Cecil Rhodes wanted future leaders to visit his alma mater of Oxford University, Schwarzman is sending them abroad to gain a better understanding of the world's rising economic and political power.

There is bound to be skepticism. Schwarzman's $100 million pales next to the losses China's sovereign fund made when it invested $3 billion in buyout firm Blackstone in 2007. Though the shares have recovered somewhat from the depths of the financial crisis, China Investment Corporation is still nursing a near-$1 billion loss. Corporate sponsors such as BP, Boeing and Bank of America will no doubt view Schwarzman's scheme as a way to improve their influence on the mainland. And, the heavyweight advisory board - which includes the likes of Tony Blair, Nicolas Sarkozy and Hank Paulson - is also noticeably light on Chinese luminaries of equal stature.

Yet, these objections do not undermine Schwarzman's cause. China's rapid rise and insular tendencies mean the country's leaders have little experience and understanding of their counterparts elsewhere. For Western leaders, the country remains mysterious and impenetrable. That has already led to tensions, which are only likely to increase as China flexes its growing economic and political might. If Schwarzman's scheme helps future leaders gain a better understanding of each other, any less high-minded motivations will be forgotten.