The Chinese economy has had large education demands for many years and is likely to do so for many years to come. The Australian education sector, particularly the higher education sector has substantially benefitted from the sheer quantity of Chinese students who visit Australia to study for diploma’s, bachelor degrees, masters degrees and PhD’s. In 2015 Australia received more just short of 100,000 Chinese students in the higher education sector (96,793), from an overall number of 169,754 Chinese students that came to Australia to study in a range of courses from Non-award programs (10,847), School programs (10,283), Vocational Education and Training (13,326), and English language programs (38,505). Overall the number of Chinese students that visited Australia for higher education purposes has increased by between 4-6,000 per year for the past few years. Theses numbers tell a good story of Australia’s position as an education destination of choice for Chinese students, however they may demonstrate a emerging challenge for the Australian education industry to continue to reap the economic benefits of Chinese students in Australia.
International students have an overwhelming positive economic impact on Australian cities, and particularly inner city urban development, and vibrancy. Economic analysis in recent years has suggested that international students have an annual economic impact of $17.5 billion on the Australian economy. There has consequently been considerable discussion about expanding international student numbers and attracting more students to Australian institutions. The former Australian Trade Minister – Andrew Robb suggested in 2014 that Australia had the potential to train 10 million students from Asia. This figure has remained on the table at least unofficially amongst education leaders in Australia, although it is generally accepted that it is unrealistic to expect these entire student to come to Australia, and would require significant offshore training. Its important to note that in 2015 Australia received some 642,820 students covering, higher education, VET, Schools, English language and non-award programs, so to suggest an expansion towards the 10 million student mark is patently unrealistic in most cases.
The aspirational targets of growing international student numbers and particularly Chinese students has driven a range of commonwealth, state and local government policies and strategies all aimed at growing the international student pie. Higher Education students generally have a higher economic impact, as the students stay in Australia for longer – 3-4 years per degree and potentially longer post degree, and so have been the principle focus of most student attraction efforts. Australia over the past three years has seen incremental growth in Chinese university students, with most growth concentrated on the NSW and Victorian states, which have been growing at between 1-2000 students per year. Most of the other Australian states have had marginal, stable or negative growth across the past three years in this sector. The challenge is that although there has been some growth in Chinese students, the highest percentage growth has been consolidated amongst the English language programs (ELICOS). There has been marginal growth for the vocational education and training sector, while non-award and schools are growing off small bases.
These figures all lead to an important question about whether Australia, and its key government and institutional stakeholders in the education sector are effectively approaching market capacity in what can realistically be achieved from Chinese students to Australia. Does Australia and its education institutions need to look at adapting its engagement model with China to train more students?
Australia will always be an attractive place for Chinese students, as it is a quality education market in an English-speaking environment, and the two countries have an important economic relationship that encourages cross cultural knowledge. However, its also important to note that China has been rapidly growing over the past thirty years, and Chinese Universities have substantially lifted standards, and are much more international than ever before. Many institutions have English language business and economics programs, and education is well received (and sought after) in China. To add to the puzzle there are now increasing numbers of European and North American universities establishing campuses in China to train students in China. This all leads to more choice, better standards domestically and potentially less demand for Australian in-country study.
I have been working with an Australian University here in China for the past five years, teaching in a dual Masters program in China, and there is significant demand for these types of programs in China, however, I haven’t found many similar programs from other Australian institutions. This suggests that there hasn’t been as much of a focus upon the in-china mode of delivery. The problem for our governments and institutions is that if we start to lose Chinese students to competitor institutions in China and other markets, then we will lose the economic benefits we currently reap. Its time for a refocus upon what Australia wants its education exports to look like now and into the future. Itsis likely we will see more offshore education delivery in the future. China is likely to be at the forefront of this demand, and Australian education institutions should be establishing strategies on how to maximise the market opportunity.
Dr Nathan Gray is Managing Partner of AsiaAustralis – a strategic management advisory firm that specialises in markets throughout Asia. Over the past three decades our consultants have assisted companies achieve their market objectives in Asia.