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(Last updated: 31 Jul 2012)
Trends and opportunities
The market
Education is a top investment priority of Chinese families. Despite the size and diversity of China’s education system and over a decade of rapid growth in the China study abroad market, the demand for overseas education is expected to continue to grow robustly.
In 2011, the number of Chinese students went to study abroad hit 339,700 representing more than 20 per cent increase over the previous year. In fact, the trend of an annual growth rate of over 20 per cent has lasted for a number of years, reflecting the strong market demand arising from the pursuit for quality education 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.
The Chinese Government will continue to support the policy of Chinese students studying abroad for them to come and go freely and make their own decisions about when they return to China as indicated in its Ten Year Plan for Medium and Long Term Education Reform released in 2010. The Plan’s target of a modest growth in China’s university sector of 16 per cent over 10 years will continue to channel unmet demand to aspiration for a university qualification overseas.
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 in reputable schools/institutions 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, provinces and municipalities across the country have completed their medium to long-term talent development plans (for 2010-2020). These can be of guidance to Chinese institutions for their planning of student and institutional development.
Most Chinese studying abroad are self-funded students. 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 age.
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 the 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 is 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.
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 until recently.
With Australia facing challenges to its leading position as a high quality international education provider in the last two years, some other key competitors such as the US, UK and Canada are seeing increases in their market share in China. The strong Australian dollar and the increase of tuition fees have in particular adversely affected Australia’s cost competitiveness. This has widened the choice range especially among key English speaking study destinations within similar price bracket for Chinese families.
Following the Knight Review with new visa policies being implemented, the market prospect for Australia is expected to be positive and stable in the long term according to feedback from key education agents in China.
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