As we enter the Year of the Dog many international recruiters and university bosses will be anxious to know whether Chinese students will continue to follow the call to the traditional receiving countries. The period after Chinese New Year usually signals the quickening of pace in the recruitment cycle but may bring a summer of sluggish, difficult dog days for conversion. Some may even wonder how things might change by the time of the next Dog Year in 2030.
It is no secret that China has been the rocket fuel driving international student enrolments for the past fifteen years. The statistics show that US and UK enrolments continue to become increasingly dependent. And while the Canadian beaver may be popular and industrious, and the Australian kangaroo is bounding ahead, they look increasingly vulnerable to any changes in the market dynamics.
Table 1 – % of Chinese Students in Key Receiving Countries
NB: Gathering data that is matched in terms of definitions and timescales is problematic. The general point regarding concentration of students is clear but the sources are shown for clarity.
The demographics of China do not seem particularly helpful. The pig has passed through the python in terms of the bulge in University-age students. There are 32million fewer Chinese aged 20-24 than there were five years ago. And in another five years there will be 18million fewer than today. Numbers stabilise and then begin to grow slowly but by 2029 remain below 2017 levels.
Table 2 – China Demographics
It would be fair to argue that 76million people is still a very big audience to aim at if you are a skilled recruiter prepared to travel around second, third and fourth tier cities (handy definition at http://multimedia.scmp.com/2016/cities/ ) as the move to urban areas continues.
There is also the lure that the Chinese middle-class is growing rapidly. Surely the wealthy middle-class is the goose that will lay sufficient golden eggs to more than make up for the fall in population? Well, maybe, but the concept of a ‘middle class’ seems quite slippery.
In 2016 McKinsey were reporting that, 54% of China’s urban households will be classified as “upper middle” class by 2022. Upper middle class sounds pretty well-off but is measured by McKinsey as household income of $16,000 to $34,000 a year. Just for comparison, the U.S. Census Bureau reported in September 2017 that real median household income in the US was $59,039 in 2016. If you have to pay tuition fees and accommodation in dollars relativity becomes reality.
To give this some further context Table 3 (below) shows the IMF and World Bank comparators on GDP per capita. The Geary-Khamis measure is an ‘international dollar’ that allows a comparison between countries allowing for local cost of living etc. The disparity between the US, UK and China on this measure seems stark.
Table 3 – Comparable GDP Per Capita (Geary-Khamis dollars)
IMF (2017) World Bank (2016)
USA 59,495 57,467
UK 43,620 42,609
China 16,624 15,535
Source: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
Average wage growth in China looks pretty impressive. Trading Economics/MOHRSS statistics show strong growth. But a wage of CNY67569 is worth $10,643 in February 2018.
Table 4 – Growth in China Wages
The real question may be whether the burgeoning middle class will secure enough of the growing wealth of the country or whether the distribution of wealth will increasingly be skewed to a super-rich cohort. The New York Times in 2014 reflected on Professor Thomas Piketty’s book Capital in the Twenty-First Century. Critically, the author notes ‘…income from wealth usually grows faster than wages. As returns from capital are reinvested, inherited wealth will grow faster than the economy, concentrating more and more into the hands of few.’
Table 5 (below) suggests that a key question regarding the distribution of wealth to the Chinese middle class may rest on the extent to which China is more like France than the US and Britain.
Table 5 – Share of Total Income Change in Five Countries
Source: Capital in the 21st Century, Thomas Piketty
It may be, of course, that the growth in wealth is such that it will overcome the decline in demographics and the distribution of income hurdles. But a third challenge is how supply matches against demand in global higher education. In this respect developments in China (as well as other countries in Asia) are likely to bring serious and sustainable competition to traditional providers.
A full analysis is beyond the scope of this blog but recent reports give some sense of the direction of travel as far as capacity, quality and value are concerned:
i) Universities in China have built capacity at a furious rate and as Establishing A Presence in China notes notes ‘at current rates….there will be a university seat for every child in China by 2030’. (OBHE quoted in THE)
ii) Xiamen University opened its first overseas campus, the first Chinese university to do so, in the Malaysian state of Selangor in September 2015. The primary tuition language is English. The campus intends to split its students body equally between Chinese, Malaysian and other nationalities.
iii) The Asian Universities Alliance, launched in April 2017 will boost Asia’s influence on the global higher education stage as well as supporting regional student mobility. Founding members span 14 countries and include Tsinghua University, Peking University, and the Hong Kong University of Science and Technology.
iv) Government investment in Chinese academic research is significant and quality has moved ahead quickly. An example, noted by the White House and reported in the Washington Post (October 2016), gives context in terms of research into artificial intelligence.
Table 6 – Journal Articles Mentioning Deep Learning
vi) The Double First Class Project is reportedly allocating 40 billion RMB ($6.04 billion USD) to a comprehensive project to bring 42 Chinese universities and courses at another 95 Chinese institutions to a “world-class level”.
The move towards a powerful higher education sector capable of serving its own people as well as many other international students seems well established. But, as my economics teacher at school used to tell the class – all decisions are economic. She was in a relationship at the time with the person who became my politics lecturer at College who would tell us – all decisions are political. Education is often just a side show.
In that regard it’s worth considering the initiative commonly known as ‘One Belt One Road’. As one of the largest infrastructure and investment project in history it reportedly covers more than 68 countries, equivalent to 65% of the world’s population and 40% of the global GDP. The extension of soft power through hard cash may become critical in determining the long-term movement of students around the globe.
A self-sufficient China at the heart of a global network will become an even bigger attraction for business and, inevitably, for students drawn to a global economic superpower that is investing so heavily and making travel easier and cheaper. Many Western universities have already ensured that they are partnered with well-funded Chinese institutions and despite the odd wavering over academic freedom we have reached a point of no return. It seems likely that there will be a genuine tipping point where the long-established flow from east to west will reverse. The haigui, or sea turtles, may not need to travel (and certainly not in the volume of the last fifteen years), to secure the education they need for their lives and careers.
In that respect I find myself considering the words of Dr Monika Korte, the scientific director of the Niemegk Geomagnetic Observatory at GFZ Potsdam in Germany. She said, “It’s not a sudden flip, but a slow process, during which the field strength becomes weak, very probably the field becomes more complex and might show more than two poles for a while, and then builds up in strength and [aligns] in the opposite direction,”.
Dr Korte was talking to livescience.com in 2012 about the anticipated flipping of the Earth’s magnetic poles (What If Earth’s Magnetic Poles Flip? February 10, 2012). The article makes the point that the change is not instantaneous, that the period of change is difficult to manage and characterised by a significant weakening of the current magnetic field. But eventually the needle points in a different direction. I suspect that is a pretty good metaphor for the Year of the Dog 2030.