Huang Yuanshen remembers the first day Chinese students entered an Australian university. It was 1979, and Huang had been attending a local Chinese university recovering from the ravages of the Cultural Revolution. He was administered a standardized performance exam, and out of over 1,000 applicants, selected to join a "group of nine." The government sent the students to study English in Australia on full scholarships.
His first seminar at the University of Sydney was a culture shock. "We had all read the assigned material and understood it. But then one by one, the Australian students walked up to the front of the class and critically analyzed the work. All of us Chinese students were stunned – we had been taught to read the material, not to think about it."
Huang would later go on to major in Australian literature, becoming a professor at East China Normal University and honorary director of Australian studies at the Shanghai Institute of Foreign Trade, with additional stints as visiting professor at the University of Sydney, La Trobe University and Pennsylvania State University. But the lesson he drew from that day sticks with him.
"In China teachers want students to be knowledgeable, but in Australia they want them to be thinkers. In Australia students obsess over term papers. In China they obsess over multiple-choice tests."
Much has changed since Huang’s inaugural class of nine traipsed to Australia. Last year 64,406 Chinese students studied abroad at Australia’s universities. And while Huang emphasizes the cultural benefits of matching Chinese students with Australian education, both the students and universities are often driven by a much simpler motive: money.
Chinese students study abroad because Western schools are, by and large, better. China’s secondary education system is rapidly improving, but the country’s universities still lag Western schools by a wide margin: In the annual Academic Ranking of World Universities published by Shanghai’s Jiao Tong University, not one Chinese university ranks within the top 100 globally. Just two – Peking University and Tsinghua University – are within the top 200.
"Some exceptions aside, if you’re among the brightest Chinese students it’s easy – you’re going abroad," said Yang Rui, associate professor at the University of Hong Kong’s (HKU) Faculty of Education.
In the past, the esteem regarded Western universities and the high quality of Chinese international students – few of whom could afford to venture abroad without merit-based scholarships – awarded these students a special place in China’s public imagination. Those who obtained a degree abroad and then returned to China were dubbed hai gui ("sea turtles"), and their Western schooling was said to leave them dujin: "coated in gold."
That may be changing as Chinese families grow wealthier. "Now you have a lot of Chinese students who can suddenly afford to study abroad without the scholarships they needed in the past," said David Zweig, director of the Center on Environment, Energy and Resource Policy at the Hong Kong University of Science and Technology. Chen Yafeng, operational director at Ambow Education, a consultancy that prepares Chinese students for study abroad, says that whereas four or five years ago almost all Chinese students required scholarships, now about 60% pay full tuition.
In practice, this lowers the quality of returning Chinese international students. Drawn by the allure of a gold coating, many sub-par Chinese students who in the past would have studied at mediocre universities at home can now afford to get degrees from mediocre universities abroad.
Chinese employers are taking note that a foreign degree no longer guarantees above-average employees. Beginning around 2004, China’s media began describing a new trend: hai dai ("seaweed"). These were students that had returned to China but, like many domestic graduates, were still unable to find a job.
"There’s much more discrimination among mainland employers now. A diploma isn’t enough for a good job back home anymore. They need to have the whole package – especially work experience," said Anthony Welch, head of the School of Policy and Practice at the University of Sydney’s Faculty of Education and Social Work.
In a 2008 study conducted by Zweig and Donglin Han at the Hong Kong University of Science and Technology, returning Chinese students were tracked as they entered the job market in Guangzhou. The researchers found that the quality of Chinese international students had indeed dropped dramatically: A majority of returning students had attended poor or mediocre foreign institutions – among the bottom 15% of schools the Academic Ranking of World Universities.
But the gold coating was still real. While foreign graduates often set their sights too high – 58% admitted that they were forced to lower their salary expectations – they still enjoyed a wage premium of roughly 50% compared with those who studied in China. And the seaweed phenomenon was exaggerated: 73% of returnees found jobs within three months of returning home, and 94% within six months.
However, even with good job prospects and a substantial wage premium, studying abroad is not necessarily an economic choice. The study cited one girl who anxiously wondered how long it would take her to pay off a US$150,000 education on a salary of US$441 a month. Prospective international students must conduct a tricky cost-benefit analysis of whether the likely salary advantage conferred by a foreign degree can recoup the sometimes overwhelming upfront tuition costs.
Cost is where Australia has traditionally held an advantage. "There’s the perception that Australian education is much cheaper than the US or UK," said Ambow’s Chen. "Its allure is that while Australia offers a quality of education on par with other Western countries, the price bracket is similar to studying in Singapore or Malaysia."
Not anymore. Thanks to a rising Australian dollar, the real cost of an Australian education for Chinese students has increased by 50% over the past two years. The irony, notes Glenn Withers, professor of public policy at Australia National University and chief executive of Universities Australia, is that the dollar has been buoyed in part by China’s voracious appetite for Australia’s raw commodities.
"China’s demand for Australian minerals makes it more expensive for China’s students to study in Australia," he said.
Yet the overwhelming rise of China’s wealth has dulled the price sensitivity of many Chinese international students. Despite the price hike and a slowdown in the domestic economy, enrollment of Chinese students at Australian universities grew by over 20% between 2008 and 2009.
This is good news for Australian universities. The roughly 250,000 international students in 2009 comprise about 25% of Australia’s total student enrollment in higher education – a vastly higher proportion than any other developed nation. This has less to do with an Australian predilection for multiculturalism than the structure of Australia’s university tuition fees.
While they study, Australian students accrue government debt. They must begin paying off their debt after they graduate, get a job, and earn above a certain income threshold. This works well for students, but because the government’s tuition loans are long-term performance-based, universities that choose to increase investments are at a disadvantage.
By contrast, Welch says that the "vast majority" of international students pay tuition in full, up front. "No higher education institution in Australia can ignore that fact." International students generated US$17.3 billion for Australia’s economy in 2009 (of which US$3.82 billion came from Chinese students), making education Australia’s third-largest export category, behind only iron ore and coal.
Also unlike in the US or UK, tuition in Australia does not vary between universities so much as it varies between subjects of study. Tuition costs are linked to the major’s expected future earnings: Finance or business administration majors rack up a hefty tab, while history or literature majors get off lightly. And Chinese students love to study expensive subjects.
"Oh, they prefer business-related subjects by far," said Kevin Laws, director of international students at the University of Sydney’s Faculty of Education and Social Work. "Even in my department, education, they’re just overwhelmingly focused on the management side of it."
Laws’ anecdotal experience is corroborated by many others. Estimates put the proportion of Chinese students studying business or economics-related majors for their undergraduate degree at 40-70% of total Chinese enrollment, with most experts agreeing that it is over half (those studying hard sciences are a large minority). "The proportion of Chinese students studying business-related subjects is certainly different than domestic Australian students," said Welch.
Ambow’s Chen argues that this is a consequence of China’s rising prosperity. "In the 1980s and 1990s all the Chinese students were studying the hard sciences, whether they had an initial interest in it or not, because that’s where the scholarships were. Now people are wealthier and don’t need the scholarships, so they’re free to major in high-income fields: finance, economics and business administration."
These majors are perceived as a safe bet for landing a job after graduation – though Zweig’s study found no correlation between a returnee’s major and their starting salary.
The rising wealth of Chinese families may be leading to another trend. "There is currently a surplus of students in finance. But as more students can afford to study what they prefer, you will see a shift toward the humanities," predicted Wang Huiyao, vice chairman of the China Western Returned Scholars Association. Confident that their families have enough resources to ride out a bumpy first few years in the job market, some are choosing to pursue a major that may have little direct market value but is of personal interest.
"We’re starting to see many Chinese students prefer double majors: one subject that may not pay well but that they are interested in, and then a more practical major as a backup," said Chen. In this respect, Chinese student proportions are slowly coming to resemble domestic Australian students, with one important exception: Many Chinese students also seek legal immigrant status.
Greener on the other side
Most Chinese do not return from their studies abroad. "Between 1978 and 2000, about a million Chinese students went abroad for study, and just 25% returned," said Welch. "That rate is rising because there are more opportunities on the mainland, but the best and brightest largely still stay abroad."
ANU’s Withers estimates that 20% of Chinese international students in Australia have a "migration interest;" Ambow’s Chen says the figure among his clients is 30-40%.
Not all paths to immigration are the same in Australia. By enrolling in easy vocational classes for subjects in which they have little interest – hairdressing is an example commonly cited by Australian politicians – prospective immigrants discovered about a decade ago that they could qualify for skilled immigration visas without having actual skills. In time, a system evolved for migrants to take inexpensive night classes that covered the bare minimum requirements to jump on the immigration track. Australian immigration officials wised up to the game, and earlier this year tightened restrictions on which subjects of study qualify for skilled work visas.
The restrictions have particularly impacted South Asian students, who often enroll in private vocational schools because they are interested solely in migration. A combination of relative poverty and high property prices in downtown Sydney and Melbourne have forced students into overpopulated houses in crime-ridden suburbs.
"There are significant sanitation and safety concerns for these students," said Simon Marginson, Director of the Monash Centre for Research in International Education at Monash University’s Faculty of Education.
Whereas ethnic Chinese tend to migrate to Sydney, most South Asians are drawn to Melbourne, where their population exploded from 10,000 in 2000 to around 100,000 today. And while the Chinese presence in Sydney is diffuse, South Asians tend to congregate in dense clusters. This has engendered hostility toward the foreign students, especially as housing regulations in these districts are not strictly enforced.
"If you suddenly had 20 Nepalis living in a four-person house next door, you might be a little peeved as well," one Australian government official told CHINA ECONOMIC REVIEW.
The friction eventually resulted in violence: An Indian student was brutally murdered in early 2010, and other Indians were subjected to hate crimes. The violence prompted large rallies by ethnic Indians in Melbourne, who believed that the government was not doing enough to stop xenophobic violence. The crimes also led to a diplomatic nightmare for the government, as it scrambled to mend fences with India.
The reality of the violence is disturbing but less sensationalistic. "Australia is just less tolerant toward ethnic minorities than many Australians assume," said Withers, who led a government-commissioned study after the attacks. "So we have that to work on. But on the other hand, this phenomenon has also occurred in Canada, New Zealand and the British midlands, and we found that despite all the media attention, violence against foreigners is proportionally somewhat less than violence against native Australians."
The government has responded with a series of measures, including new student representation, community policing and visa arrangements so that poor students can avoid working dangerous jobs.
Even so, the violence has dramatically impacted Indian student numbers: Australian High Commissioner Peter Varghese predicted a 60-70% fall in Indian student enrollment for 2010 (though this is also partly the result of a crackdown on visa paperwork fraud from South Asia). Many education authorities are also concerned with the strong anti-immigration rhetoric produced by the hotly contested recent election. "All the talk of a crackdown on immigration and a ‘smaller Australia’ coming from both parties during the general election was very unhelpful," said one Australian education official who asked to remain anonymous. "It cuts into our universities’ bottom line."
But skilled immigration restrictions and violence have not greatly impacted Chinese student interest in Australia. While many Chinese students have an immigration interest, it is usually closely tied to their educational goals. "On the point-based Australian immigration system, about 80% of mainland Chinese migrants score in the top (most desirable) category, which is very different than in the past or for other nationalities," said Welch.
Moreover, a benign popular conception of Australia in China is proving resilient. "In movies and TV, Australia holds a fond place in China’s cultural depictions. It’s seen as a very comfortable, safe place to live," said the University of Hong Kong’s Yang Rui. Many alumni of Australian schools defend the image. "I found it was a very, very pleasant place to study. The whole atmosphere was open and relaxed," said Olivia Jingshu Ji, founder and vice president of China Entrepreneurs, and member of the Australia China Alumni Association.
Facing the competition
This is fortunate for Australia, because competition for China’s students may intensify in coming years. A recent report by the Economist Intelligence Unit suggests that China’s overall student-age population may have peaked in 2007, and its international student numbers will likely moderate in the near future.
Australia has some competitive advantages. In addition to price and reputation, proximity is also an important factor. Relatively short travel distances and a minor time difference are important to Chinese parents who fund their children’s education. Chinese students also note that the country has a proportionally large ethnic Chinese demographic.
Studying in Australia may also yield less tangible benefits. "I had a chance to go to Harvard for my master’s degree," said Fran Han, a professor at the College of Architecture and Open Planning at Tongji University’s Department of Landscape Studies, and also a member of the Australia China Alumni Association. "But Australia offered a more multicultural experience. The networking factor was also crucially important, especially for breaking into international research circles."
Australia has historically been proactive in courting international students, not only because of its universities’ financial incentives, but also because it comes from a weaker position relative to the US and UK. "The US is always Chinese students’ first choice as far as academics," said University of Sydney’s Laws.
Among the top 100 institutions listed on the Academic Ranking of World Universities, the US holds 55 places, the UK holds 11 places, Canada holds four and Australia holds three. Yet while American universities have the strongest academic reputation, Laws said that they are not an option for many Chinese applicants. "Either they can’t gain admission, it is too expensive or for personal reasons. That’s where Australia can fill the gap."
The overall percentage of international students coming to Australia has stayed at around 5% for the past decade, and some fret it may decline as the US and UK launch aggressive marketing campaigns in China.
The US in particular has relaxed its immigration policies under the Obama administration – Ambow’s Chen says that his Chinese clients now see the US as at least as immigration-friendly as Australia. And the UK is often a less expensive choice, because completing a master’s degree takes just one year instead of two.
Stragglers catch up
New competition is also emerging. Canada is proving the late bloomer of the English-speaking world. After a quiet start, it is now vigorously promoting itself, and has nearly doubled its share of international students from a decade ago, albeit from a low base. Massive investments in higher education within China itself are also making some Australian officials concerned that Chinese students will be encouraged to stay at home. But this is unlikely, at least for now.
"We’ve seen a big increase in students interested in studying abroad because people don’t like Chinese education," said Ambow’s Chen. "The government has been promising to reform it, but we’ve yet to see any real improvements."
Others say concerns about competition in general are overblown. The number of international Chinese students may peak in coming years, but that is not necessarily a bad thing for Australia.
"Market share is a total misnomer," said an Australian diplomat in Beijing. "When enrollment is jumping by 20% a year, competing with the US and UK for market share is the last thing on your mind. The most important thing right now is that soon we will simply not have the capacity for more Chinese students in Australia."
It is certainly a far cry from Huang’s class of nine just 30 years ago.