Chinese international students – The end of the affair

Growth in the number of Chinese students pursuing study in four top destinations – United States, United Kingdom, Canada and Australia – is “slowing significantly”, according to a new report. But while Canada and Australia are diversifying their international student populations, the US and UK continue to rely too heavily on China as a source country.

Rethink China: The end of the affair, an inaugural report from the consultancy Education Rethink, says that despite strong growth in outbound student numbers from China, the latest data shows that “the long-predicted end of the Chinese student boom may soon arrive for the US, UK, Canada and Australia”.

That we know, but in the report co-founders and managing directors of Education Rethink, Jeremy Chan and Anna Esaki-Smith, use fresh (big) data to track Chinese students by means of student visas or equivalents, take a comparative look at countries, and examine student mobility destination markets and push-and-pull factors that are influencing student flows.

Although visa issuance is not an apples-for-apples comparison with enrolment, they write, “it can get us very close to the mark, and much more quickly than other national-level sources”.

Key findings

The report says a number of factors are contributing to the decline in Chinese student flows to the four English-speaking countries.

They include “the emergence of less expensive study destinations in Asia and Europe that offer what is perceived as better value and a seemingly more welcoming environment. The increasingly weighty role geopolitical issues play in international higher education is also noted.”

According to the study’s key findings: “Canada and Australia are diversifying their international student populations so as to be less reliant on China as a source country.” Meanwhile, the US and UK “continue to rely heavily on China as a source country for international students”.

“Total enrolments of Chinese students across nearly every level of study in the US dropped in 2018-19, with the biggest decline in language studies.” In America, the total Chinese student population peaked in 2017-18. The downward trajectory continued into 2019-20 despite a mild rebound in visa issuances this year.

“UK student visa issuances to Chinese nationals are up 21% year-on-year, while issuances to the rest of the world have increased 8%.” But an over-reliance on Chinese enrolments, the report says later, “means there is little room for further, sustainable growth beyond current enrolment levels”.

“After surging 38% through the first half of 2018, the number of new study permits for Chinese nationals to Canada was flat through to August 2019. Demand for Canadian education from the rest of the world remains strong, with issuance of new study permits growing nearly 15% in the last year,” the report says.

“Australia appears to have reached ‘Peak China’ one year after the US did and has seen new enrolments of Chinese students across all levels of study drop 4% year-on-year through to August 2019.” Meanwhile, new enrolments from the rest of the world are up nearly 7%.

A shift away from traditional markets

Chan and Esaki-Smith argue: “Major host destinations need to develop more nuanced strategies to maintain their position in the world’s most important student market, while also seeking new pools of international students outside of China for growth.”

The number of student visas or equivalents issued to Chinese nationals for the US, UK, Canada and Australia grew a total of 4.5% from 2016 through to 2019. “This may not sound like much of a slowdown, but consider that the number of total outbound Chinese students grew 22% from 2016 to 2018 alone.

“Chinese students continue to go abroad in droves, but they are increasingly looking beyond the traditional host destination markets. In fact, China’s student market is still by some distance the most important one in the world. Outbound numbers from China have grown 17 times from 2000 to 2018.”

After three decades of rising incomes, study abroad is now accessible to a wider range of Chinese students, and the profile of outbound Chinese students has shifted from sponsored graduate student to self-funded undergraduate, says the report.

“But at the same time, the available menu of study options has grown considerably, and Chinese student preferences have shifted along with them. As a result, Chinese students are seeking study destinations in Asia and Europe that offer some markets.”

Geopolitical tensions, it continues, have made Chinese students feel less welcome in countries like the US and UK. Also, “a weakening domestic currency may have caused Chinese families to be more price conscious”.

“Markets as diverse as Japan, South Korea, Germany and the Netherlands – offering more affordable study options, often closer to home – look to be winning market share at the expense of traditional host destination countries.

“And lastly, some of these major English-language host countries appear to be actively seeking to diversify their international student populations.”

Conclusion

The four traditional study destinations simultaneously face two strategic imperatives: maintaining their position in the world’s largest sending market, while seeking out new sources of growth, says the report.

“Along those lines, Canada and Australia have shown that there is life after China, while the UK and United States have deepened their reliance on China’s market in order to boost or maintain their overall international student enrolments.”

If the latest data shows anything, write Chan and Esaki-Smith, “it is that the major English-speaking host countries have begun to put themselves on a more sustainable footing”. New enrolments for non-Chinese international students are up 8.5% in the UK, 7% in Australia and 14.5% in Canada so far in 2019. Even the US has seen the decline in F-1 visa issuances to the rest of the world moderate somewhat in 2019.

The need to diversify the pool of international students has become clear, given knowledge that breakneck growth in Chinese student enrolments is likely over.

Universities in the US, UK, Canada and Australia “will require a major strategic rethink: competing for market share in China by improving recruitment and marketing tactics, while also shifting resources to higher growth markets”.

“The most effective institutions will simultaneously go deeper – segmenting China’s markets in order to target high value cities and subject offerings – and go broader, casting a wider net to attract students from new locations.”

Even when faced with finite resources, the report concludes, prioritising strategy will be key to navigating today’s rapidly-evolving landscape. “There isn’t another China out there, nor will there ever be. But opportunities abound, if you know where to look.”