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Competition in Chinese higher education sector heats up

Competition in Chinese higher education sector heats up

Almost overnight, the Chinese higher education sector has gone from one with not enough capacity to one with too much. Competition for students has never been more intense, and the share of students among different types of institutions is shifting.

One type of Chinese higher education in particular is facing very challenging times: the Chinese private colleges known as minban or “people’s colleges,” which for the past decade experienced incredible growth but which now “face extinction” according to a recent article in the Chinese-language Economic Observer.

Minban sprung up and proliferated during a time (circa 1999–2005) when China’s public universities couldn’t keep up with demand. The Chinese government heartily endorsed minban then for increasing capacity in the drive toward the “massification” of China’s higher education system.

The minban offer mostly professional and vocational courses and have mainly been the choice of students scoring poorly in the intense higher education entrance exam (the gaokao).

Many minban have been accused of offering low-quality education and facilities – but not all, and for those minban that are well run, the reputational damage wreaked by sub-par minban couldn’t come at a worse time. That’s because they are faced with a multitude of other challenges to retaining market share:

  • Fewer Chinese high school students are taking the gaokao, resulting in a smaller pool of potential students to recruit. The number of candidates taking the examination has dropped from 10.15 million in 2008 to 9.15 million in 2012, according to official figures.
  • High school students and their parents are becoming more discerning and brand-conscious in their choice of post-secondary institutions.
  • More prestigious Chinese public universities are now expanding with second-tier colleges that allow students to graduate with the main university’s name on their credentials.
  • Foreign branch campuses from the US, UK, and Australia in particular are present now in the market and expanding.
  • More Chinese students are opting to study abroad (with more and more electing to go as early in their studies as secondary school). In 2011 the number of Chinese students who went to study abroad hit a record 339,700 and this figure is expected to rise to between 550,000 and 600,000 by 2014.
  • Online education platforms such as Coursera boasting prestigious foreign branding are setting up shop in China.

As the Chinese higher education market matures, it is inevitable that demand for post-secondary education is morphing into demand for post-secondary branded education. Those institutions that can’t compete on the basis of brand will have to think of other ways of appealing to an increasingly sophisticated student market.

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