Not long ago, a Chinese business degree was a gold-plated ticket to the future. Not any more. Euphoria is being replaced by reality, the law of supply and demand is operating and salaries are dropping.

As enthusiasm over business degrees begins to approach reality, graduates are getting smaller salary increases.

The latest income report from the Fudan School of Management tracked the careers of 232 people among seven groups of its joint program with the Massachusetts Institute of Technology graduates, since they received their MBAs. The Fudan-MIT program is one of the best in China.

The income of those who entered the school in 1999 and 2000 saw the highest pay raises of 421 percent on average for four or five years after graduation.

Those who entered in 2001 said their salaries now were 332 percent higher than previous earnings, while the percentage increase for beginners in 2002 was 134 percent, the report said.

Fresh graduates of the two-year Fudan-MIT program were paid an average of 155,000 yuan (US$19,375) annually last year, said Fudan officials.

Similarly, a payment survey by Forbes China suggested that MBA graduates at Jiao Tong University in 2002 saw a pay increase of 95 percent compared with their payment before earning the MBA. The figure dropped to 78 percent for Jiao Tong's fresh graduates last year.

"Graduates' payroll fluctuates with the macroeconomic environment each year, but students do get pay raises and higher job competence by getting international MBAs, said Huang Zhiying, head of Fudan's Career Development Center.

The city's average pay increase every two years was 26 percent from 1999 to 2005.

Due to enthusiasm for MBAs, some graduates were overpaid in the first few years of employment. But employers now have a clearer assessment of new hires' abilities and give more appropriate payment, Huang said.

The supply of MBA graduates is growing while employers are more canny about a Chinese degree.

Across the country, MBA programs increased from nine schools in the early 1990s to 89 schools today. More than 10,000 students are admitted each year.

(Shanghai Daily June 30, 2006)