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Did growth in outbound Chinese mobility really slow in 2013?

China is by far the world’s largest source market for international students. Chinese students account for 32% of international enrolment in Canada, 29% of all foreign students in the US and Australia, and one out of three new international students in the UK.

But official figures for China’s outbound mobility indicate growth from this key global market slowed notably in 2013. Is this the latest indicator of what might be a pattern of slower growth, or is the official student count not providing a full measure of a shifting pattern of demand?

Behind the numbers

According to figures from the Ministry of Education, China sent a record number of students – 413,900 – abroad in 2013. This represents a 3.58% increase over the 399,600 students abroad in 2012, a notable drop from the previous year-over-year growth of 17.7% (from 2011 to 2012) and from a decade of dramatic growth between 2000 and 2010.

“This reflects that Chinese people have become more rational in regard to studying abroad,” Zong Huawei, an official from the Overseas Study Service Center under the Ministry of Education, said to the Shanghai Morning Post.

It may also indicate, however, that the Ministry of Education figures do not fully reflect the numbers of outbound students. In fact, data from major destination countries shows that the number of outbound Chinese students continues to grow at a more robust rate. The latest reports from Canada, for example, show year-over-year growth of 18% in Chinese enrolments from 2012 to 2013. The US reports growth of more than 20% over those two years. Similarly, Australia saw 6.1% growth for the year to May 2014 compared to the same period for 2013.

How then to account for the discrepancy between official ministry figures and those of major destination countries? Some observers suggest that the official Chinese tally underestimates some categories of study abroad that have become more important in recent years, including undergraduate studies, technical training, or secondary school enrolment.

Shifting demand

Recent years have seen a distinct increase in the number of younger Chinese students studying overseas. We reported on this last year and noted at the time findings from a Chinese think tank that nearly 23% of all Chinese overseas students in 2011 held an academic certificate below the high school level.

“Until recently, Chinese students mainly studied abroad for master’s or doctoral degrees,” notes China Daily. “With China’s economic explosion and an increase in affluent families, more Chinese students are now seeking to study abroad at an earlier age.

At the same time, it is well established that more traditional areas of study abroad, notably postgraduate studies, have seen a softening of demand in recent years. In the US, for example, the Council of Graduate Schools (CGS) has reported that there was no increase in offers to prospective Chinese students between 2013 and 2014, the first time this has happened since 2006. (It should be said, however, that China remains the biggest sending country for graduate studies in America, with Chinese students accounting for 37% of all international offers of admission from US graduate schools.)

In contrast, much of the recent years’ growth in Chinese enrolment has come at the undergraduate level and – as noted above – younger still. However, it has been suggested that secondary school enrolment abroad may not be counted in the Chinese Ministry of Education’s outbound numbers and, if so, this alone would lead the ministry to significantly underestimate the total number of students abroad.

Reforms at home and new economic pressures

The changing composition of Chinese enrolment abroad, with less emphasis on postgraduate study and more on undergraduate and secondary school programmes, may also reflect policy and market shifts within China.

On the strength of concerns regarding costs and employability of graduates, the Chinese government has moved to cap postgraduate enrolment in China at 450,000 students and is moving away from a policy of free tuition for advanced studies with the introduction of modest tuition fees for domestic students. “The move aims to sharpen the system’s focus on quality amidst employer complaints about the declining quality of candidates and high postgraduate unemployment rates,” notes a recent market commentary from Education New Zealand.

High unemployment among recent graduates, along with persistent concerns regarding labour market gaps and the employability of graduates, are expected to continue to drive government education policy in the years ahead. “Graduate competition for jobs in China will be even tougher this year as large numbers of Chinese students are expected to return from overseas studies,” noted a recent report from University World News. “Students returning from universities in America, Britain, Australia and other countries such as Japan and South Korea will join a record 7.27 million students who graduate in June from China’s own universities…An overhang estimated at 600,000 students who graduated last year and who have not yet found employment, will add to the number of graduate job seekers overall.”

The Chinese government appears to be responding to this challenge, in part, by encouraging a shift towards the vocational (VET) sector. Earlier this year, the Xinhua news agency reported on a government plan to increase vocational enrolment in China to 38 million students by 2020 (as compared to the 29 million students enrolled currently). Further, Lu Xin, China’s deputy minister of education, said earlier this year that continuing reforms to the gaokao national university entrance exam will provide for additional streaming of students to technical colleges. Ms Lu also announced a plan to convert 600 Chinese universities into technical colleges – that is, to shift their programming away from academics and toward technical and professional training – as part of a broader government programme to expand capacity and enrolment in the VET sector.

These two aspects of reform, transforming universities into technical colleges and redesigning the gaokao, are closely linked. “The gaokao will divide into two separate test modes,” reports University World News. “One for technically inclined students and the other for more traditionally academically oriented students. The technical gaokao leads to higher technical and professional education – specifically towards admission to 600 technical and professional colleges and universities [and] is meant to appeal to those who want to become engineers, senior mechanics and so-called high quality labourers. It will assess students’ technical skills, as well as textbook knowledge. The second [version of the gaokao] targets the standard academic student and examines characteristically academic knowledge.”

These planned reforms will find renewed urgency in the slower growth rates booked by the Chinese economy in recent years. China has been a major factor in global economic growth for decades and, after years of double-digit increases, China’s GDP growth rate dipped below 10% last year and is projected at 7.5% for 2014. “When growth slowed to 7.4% during the first quarter, says the East Asia Forum, “the government almost panicked. Policymakers feared that there could be major problems with unemployment, financial risk (with the bursting of real estate bubbles in some major centres) and investor confidence.”

Perhaps the observation that naturally flows from these important developments within China is that the demand for study abroad is likely to remain strong as Chinese students and parents continue to seek out opportunities for quality education and for a competitive advantage in a challenging job market at home. However, we might also expect that that demand will continue to shift in new directions as it has done in recent years, notably towards secondary school programmes and to technical and professional programmes that are more squarely aimed at employer requirements in China.

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