Chinese education demand steady amid global downturn

The Guardian recently reported on the potentially ‘cataclysmic’ effects of a drop in international student enrolments from China, in the event of a recessionary contagion spreading to the country. The report quotes London’s City University Vice-Chancellor Prof. Malcolm Gillies describing a receding Chinese economy as “more cataclysmic than anything else”, and urging caution in waters that represent “unchartered territory” for the higher education sector.

The China Education Blog cannot confirm reports in the same article of “huge numbers” of students deferring their places in Australian universities, nor is it clear which universities are reporting these drop in numbers. Indeed, the opposite seems to be the case.  A report in The Australian suggests demand is rising, and that there, “doesn’t seem to be any slowdown in enquiry for international education.” In a separate feature, The Australian reports that the 2009 enrolment figures released by twenty Australian universities indicate a rise in student numbers, with sixteen reporting an increase of between 10 per cent and 15 per cent, with others reporting larger rises.

In China, the Shanghai Daily illustrated one of the bustling overseas education fairs that are regularly held in Chinese cities, quoting a US university official who summed up the unmistakable feeling at most of these fairs: “There seems to be a frenzy here to go abroad for studies…” Indeed, international student supply from China has grown rapidly over the last decade.

Trends point to continued growth in demand. Almost two-thirds of Chinese students polled by Totuba in 2008 indicated a desire to study abroad (80% answered similarly in a December 2007 survey by the China Youth Daily), while governments in the UK and Australia, for example, have been lowering entry barriers for international students - an increasingly larger percentage of whom are Chinese.

Further, the strengtening Chinese Yuan has made it even more attractive to study overseas (the Yuan buys, for example, almost 30% more Australian Dollars than it did several months ago), serving as a factor in the offsetting of any loss of demand from a potential recession. The Chinese government’s rolling stimulus packages will also serve to strengthen local confidence in an economy that, while slowing, remains at a rapid annual growth rate around or above 8%.

China Qiao Wang reports on rising labor market competition due to an increase in the number of incoming foreigners and Chinese overseas scholars returning to China, as well as the long-term outlook of Chinese students (and their parents), who are willing to invest the extra time and money to study now, for a better workforce outcome later.

Amanda Mo, a Chinese student who completed her undergraduate degree in Commerce at The University of New South Wales (UNSW) in 2008, told the China Education Blog she has decided to pursue a masters degree this year. Indicating a tougher job market amidst slowing world economies, Ms. Mo went on to comment, “Myself and other graduates here in Australia are having a hard time finding jobs, so we would rather continue studying now to find better jobs in the future, rather than working in temporary jobs we may not even like.” Another UNSW international student, Cherry Chiu, echoed this sentiment. “I have been looking for work in Hong Kong during the semester break, but the current economic conditions and job market is making it difficult.” Ms. Chiu will continue her studies in Australia through graduation, and mentioned that several of her friends feel now is the right time for academic pursuits, both at home and abroad.

Halfway through his postgraduate studies at the University of Sydney, Edison Meng believes the pursuit of a quality international education is too important for Chinese families to forego or postpone, particularly after many had saved for years in aid of that goal. ”Money is usually set aside by the family when a student is going abroad, and I believe there would be only rare cases of Chinese international students dropping out of universities due to the effects of the financial crisis,” Mr. Meng said.

The demand for high quality, international-standard education from the Chinese market does not seem to be waning according to current indicators. Educational organisations still fearing a loss of income from Chinese international student income could consider the worthiness of establishing, strengthening or re-launching their programs inside China’s borders.

Students who, for one of several reasons cannot study abroad, simply do not want to be left behind, instead choosing high-quality programs delivered in China. Media outlets recently reported a spike in enrolments at Shanghai’s business schools, including the China Europe International Business School (CEIBS) - which ranked 10th in the Financial Times business school index - where student numbers were said to have grown by significantly over the past year.  The Shanghai Morning Post also discusses how white collar workers are thronging to Master of Business Administration (MBA) schools in Shanghai due to the tightening job market.

Demand fundamentals remain strong both for outgoing student enrolments, and for programs delivered within China’s borders. While we do not expect this to change dramatically during the current recessionary cycle, we will continue to track this issue.