Fire and brimstone from man who seeks 10,000 Bill Clintons

Steve Schwarzman, the chief executive of Blackstone, has a dream of creating "10,000 Bill Clintons" with an endowment to send 200 students to China every year for 50 years. But his his warnings of impending doom are a bit over the top.

Cecil Rhodes would probably have been appalled to know that Kris Kristofferson, the American country singer, had been awarded a scholarship in his name.

Rhodes was the embodiment of a brutal meeting between colonialism and capitalism having founded both Rhodesia and DeBeers, the diamond trading company. Kristofferson, meanwhile, wrote Me and Bobby McGee.

The British imperialist probably wouldn't have been too pleased about Bill Clinton being a Rhodes scholar either, but that is the problem when things are awarded in your name when you are no longer alive.

You have no control over them. Not so far as we are able to confirm anyway.

It is perhaps for this reason among others that Steve Schwarzman, the chief executive of Blackstone, the giant private equity company, has decided to launch his own legacy scholarship while he is still alive.

He has a dream of creating "10,000 Bill Clintons" over the next 50 years with the Schwarzman scholarship, a US$400 million endowment to send 200 students to a university in China every year for 50 years.

He has donated $100m of his $6.5 billion fortune to the cause and has convinced corporate donors to stump up $200m more, while he is courting wealthy benefactors for a further $100m.

The lucky students chosen to participate will attend Tsinghua University in Beijing. Some 45 per cent of their number will be drawn from the United States, 35 per cent from China and the remaining 20 per cent from other countries.

Mr Schwarzman says the idea for the scholarship, although initially proposed by the university as a means of celebrating its centennial, was in fact the product of a growing fear he has fostered watching the Chinese economy grow larger and larger while the economies of the West falter.

In the aftermath of the financial crisis China is growing at two to three times the rate of the West and is adding 10 million people to its workforce every year.

Now that the West is doing pretty much the reverse of China, economically speaking, there is a much greater probability that protectionist resentment of Chinese success may gain traction, he thinks.

"A continuation of that trend could result in a frustration that could develop into an anger," he told me this week. "If that trend in turn were allowed to continue we could have disruption in trade and economic activity and perhaps even military action. I see this as a high probability scenario," he warned. The Schwarzman scholarship could, in his words, "get in the way of that trend".

Whatever the scholarship achieves, it will undoubtedly be a force for good. Education always is, and as the $300m already donated marks the biggest scholarly fund in history, it is sure to reap impressive results.

But of course there are sceptics who question Mr Schwarzman's motives.

China is a lucrative market for private equity companies like Blackstone, and indeed the other companies that have funded the endowment.

In 2007, when Blackstone went public, it sold a $3bn stake to China Investment Corporation. And when I spoke to Mr Schwarzman this week he was in China launching the fund but added he was planning to meet potential business partners while he was in the country.

Nothing untoward about that, but an indication that there is business to be done in China unlike many other places on Earth today.

More intriguing still is the choice of university for the endowment.

Tsinghua is a prestigious school that counts many prominent Chinese politicians among its alumni, the most prominent of whom is Xi Jinping, who became China's president last month.

Mr Schwarzman is right to point out the growing dominance of China in global economics and his plan to spend a large amount of his fortune educating bright young people so that they are better equipped to benefit from that dominance in the future is laudable.

His warnings of impending-doom-lest-we-all-take-heed are a bit over the top, however.

The economies of China and the West are far too interconnected for either to be troubled by the sort of jingoism that Mr Schwarzman describes. He may have had a point in the pre-ping-pong diplomacy years but we have moved on since then.

His warnings reminded me a bit of the preacher who describes a vivid scene of fire and brimstone before handing around the collection plate. But that is not surprising.

If there is one thing the chief executive of the world's best-known private equity fund knows how to do, it's how to raise a fund.

He also knows how and where to invest it and what you have to do to get a seat at the top table.

Cecil Rhodes would have been proud of him.