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(Last updated: 26 Jan 2012)
Trends and opportunities
The market
Despite the size and diversity of China’s education system, there is substantial demand for overseas education due to a small number of places available per capita and growing economic capabilities of Chinese households. Since most urban families have only one child because of China’s family planning policy, parents tend to give their children the best education they can. Surveys have indicated that children’s education is the top investment priority of Chinese families, ahead of buying houses, saving for retirement and all other investment options.
China has an excellent education system; however, China’s domestic education system struggles to expand to meet demand. Currently there are only around 2,100 Chinese institutions of higher education shared by a significantly larger population of over 1.37 billion people. The shortage of places remains one of the key reasons why an increasing number of Chinese students are seeking high quality education overseas. The growing wealth of the better-off class in China has made overseas education more easily accessible to their younger generation.
In addition to the fierce competition for university places, China has also realised the importance of vocational and adult education to meet a huge shortage of skilled and highly skilled labour force from industries.
China also needs a well-established articulation system to offer a pathway between secondary vocational education, post-secondary vocational education and higher education.
To provide the qualified labour force for China’s development in the next 10 years (2010-2020), provinces and municipalities across the country have completed their medium to long-term talent development plans, which can be of guidance to Chinese institutions for their planning of student and institutional development.
It is estimated that over 300,000 Chinese went to study abroad in 2011, a still growing market opposite of the slowing economy. Most Chinese are studying abroad at their own expense. High schools are becoming increasingly popular in major study destinations among young Chinese students. Acting on the contention that they never allow their children ‘to lose at the scratch line’, Chinese parents never hesitate to pay high fees so that their children receive ‘high quality education’ at very young ages.
Flows of students from China to Australia are already substantial. China contributes almost one-quarter of Australia’s total exports from education service. Australian education enjoys a good reputation among Chinese students in terms of the global university rankings. Meanwhile, this market is one of the most competitive in the world with the active participation of other key players including US, UK, Canada, New Zealand, Germany and France.
With almost no impact on China from the global financial crisis, there will be more people than ever before, able to afford an overseas education due to the growing size of the upper middle class. While many challenges do exist for Australian education providers in the China market, the statistics continue to demonstrate that China is, and will continue, to be one of the most important education markets for Australia.
It’s worth noting that the educational relationship between Australia and China is not merely about student flow. Both countries are working towards, and should continue to, broaden education interaction in research collaboration, education partnerships and exchange programs, etc.
Another influential factor in the market is the role of the government in China, which is far more substantial than in Australia. There is government involvement in most activities that involve foreigners or overseas organisations. The government relationship is crucial, both for student flows to Australia and for all other aspects of the Australian education relationship, including the in-China provision of courses.
Competitive environment
Australia is one of the leading foreign providers of courses in China. Student visa applications to study in Australia have seen a dramatic increase over the past decade.
While Australia is facing challenges to its leading position as a high quality international education provider, some other key competitors such as the US, UK and Canada, are seeing market increases. The strong Australian dollar and the increase of tuition fees have adversely affected Australia’s cost competitiveness.
Following the Knight Review and with new visa policies to come, it was estimated from positive feedback of education agents, that the market for Australia would turn to be positive and stable in the long term.
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