The first job a business must tackle in marketing is to understand its customers well.  If recruiting Chinese students to your campus is your goal for years to come, you must read this post further.

In September and October of 2019, right after U.S. colleges and universities began the new academic year, many reported a steep decline in Chinese student enrollment.  This result went exactly as we had predicted. The trend is likely to continue as long as Chinese students feel unwelcome in the United States.

The Chinese study-abroad market has become less predictable in large part due to the turmoil in U.S.-China trade relations.  As a result, the United State’s education system continues to lose ground to more inviting western territories. This is despite China’s private and public sectors working in cooperation with their American counterparts to curb this trend.

On March 29th, 2019, Chinese President Xi Jinping met with Harvard University President Lawrence Bacow in Beijing to discuss the importance of Sino-U.S. education exchanges amidst the current trade war.  In a press release by the Chinese Ministry of Education (MOE), it quoted President Xi’s as stating, “We will expand the opening up of education, strengthen exchanges and experiences sharing with countries around the world, and jointly promote the development of education.”   Many viewed this as a willingness to continue cooperation with American academia.

However, less than three months later, China’s MOE cautioned (translated from original Chinese):

“For some time now, some of the visas for Chinese students studying in the United States have been restricted. The visa review period has been extended, the validity period has been shortened, and the refusal rate has increased. This has affected Chinese students studying normally or successfully completing their studies in the United States. “

This begs the question, does China’s MOE education travel warning impact on Chinese students’ decision on where to study? The answer is yes, it does. The continued decline numbers in new Chinese students attending U.S. educational institutions helps prove this. Several universities have reported drops of one-fifth or more this fall alone, according to a PBS News Hour report.

The dramatic decline in international students to the U.S., combined with the drop in domestic student enrollment, has economically devastated quite a few small liberal arts colleges. Many of these schools had come to rely on Chinese students as a reliable source of income to help stave off economic disaster. If you are concerned about your school’s dwindling Chinese student enrollment, then you need to pay close attention to a couple of surveys in China.

One of our information sources was from a 2019 white paper report published by New Oriental Education & Technology Group Inc.  It is the only publicly traded Chinese education group in the U.S., NYSEEDU.   Its data included detailed responses from 6,228 students who had studied abroad and returned to China with degrees from foreign countries.  Parents of students were also surveyed. Furthermore, the report compared results from the previous four years to help define market trends in China’s overseas-study education sector.

#1 – Preferential study abroad destinations for those who had studied abroad and returned to China in 2018

U.S.: 25%
U.K.: 19%
Australia: 14%
Canada: 10%
Hong Kong: 3%
Germany: 2%
Japan: 6%
Singapore: 2%
New Zealand: 2%
France: 3%

#2 – Preferential study abroad destinations for those who consider studying abroad

While for those who were planning to study overseas in 2019, the U.S. gained 43%, and the U.K. captured 41% of the participants’ choices as their top choice.

The U.S. remains at the top of the list, but, unfortunately, it is losing popularity among those Chinese who had planned to study abroad in the past three consecutive years. According to the white paper report – the demand was 49% for 2017, down to 44% for 2018, and down further to 43% for 2019.

The U.K., however, was the second most popular choice, and it had continued to gain ground over the past few years, from 35% in 2018 to 41% in 2019.  According to this trend, the U.K. may soon replace the U.S. as the most preferred destination for Chinese students who plan to study abroad.

The group of survey respondents also shows a growing interest in choosing Hong Kong, Germany, and Japan as their preferred destinations while Australia and Canada still occupy the third and fourth places in the mainstream destinations aside from the U.S. and the U.K.

#3 – Chinese students’ perspectives on studying in the U.S. vs the U.K.

Facing stiff competition from higher educational institutions in the United Kingdom, American university executives, administrators, and recruiters must take corrective actions by understanding why they are losing ground in the global market.  At Access Educaiton LLC, we have identified many reasons that are helping to contribute to this decline without taking into account China’s dwindling birth rate. Here, we see value in listing some of the factors that are within our control.

1) Perceived increased hostility with non-immigrant policies and politically charged atmosphere that has led to more rejections of visa applications

2) U.S. schools’ constant tuition hikes over the past 20 years – according to an article published by U.S. News & World Report in September 2019:

· Average tuition and fees at private National Universities have jumped 154%.
· Out-of-state tuition and fees at public National Universities have risen 181%.
· In-state tuition and fees at public National Universities have grown the most, increasing by 221%.

All of these, while U.K. schools have largely maintained relatively low tuition hikes, and furthermore many EU countries are offering free or low-cost education.

3) U.K. institutions offer one-year master’s degrees, but most U.S. colleges offer two-year master’s degrees – to Chinese students, less study time means more savings in the total cost of studying abroad.  Please note that the majority of prospective Chinese students are seeking graduate degrees.

4) The college admission process is more straightforward in other countries, and their average acceptance rate is higher than that of national universities in the U.S. – considering the majority of Chinese who plan to study abroad are graduates from the second- or third-tier institutions in China.

#4 – Intended education levels for the majority survey participants 

The intended education levels for the majority of Chinese who planned to study abroad are master’s degrees and/or doctoral degrees.  Here are the data for the past three years.

2018: 68%
2017: 60%
2016: 57%

#5 – Percentages of participants who consider studying abroad and already have or will have bachelor’s and/or higher degrees

2019: 77%
2018: 74%
2017: 72%
2016; 73%

#6 – Occupational levels of parents whose kids consider studying abroad 

Intermediate positions (or general employees): 43%
Managerial positions: 35%
Business owners/CEOs: 22%

#7 – Family income of prospective Chinese students

in a 2019 survey, “Chinese Students’ Intention to Study Abroad” EIC, another major education group in China, researched 100,000+ of their customers over the past three years.

EIC’s findings revealed many aspects of Chinese prospective students’ decision making regarding study abroad, including the average household incomes of Chinese families whose children consider studying abroad.

Specifically, 62.4% of participant families had an annual household income below ¥ 500,000 (approximately equal to US $71,400 if 1 USD = 7¥) and 8.78% had household incomes over ¥ 500,000.  EIC elaborated more on the income brackets below ¥ 500,000 as follows:

¥ 110,000 -200,000 (US $15,700 – 28,570): 23.45%
¥ 210,000 -300,000 (US $28,570 – 42,850): 16.43%
¥ 310,000 -400,000 (US $42,850 – 57,140): 9.81%

At the point, many U.S. recruiters may be wondering “How rich is a family with an annual household income of ¥ 500,000 in China?”  HuRun Report Inc., a major research corporation established in Shanghai by British accountant Rupert Hoogewerf in 1999, has been exploring this question. Recently the company released its China New Middle-Class Report and found that, as of August 2018, there were 33.2 million middle-class families among the total 430 million families in China. Their annual household incomes ranged from ¥200,000 (US$28,570) in second-tier cities to ¥300,000 (US$42,850) in major cities. Importantly, 50% of the middle-class families in China live in districts of Beijing, Canton Province, and Shanghai.

#8 – Acceptable annual costs of attendance

The cost of studying abroad is a major concern for many Chinese students who are interested in studying in a foreign country. It has a significant impact on Chinese students’ study abroad planning, such as the country, urban or rural setting, and professional choices.  EIC’s survey data illustrates the percentage of survey participants’ corresponding range of acceptable annual costs of attendance when they study abroad.

US$14,280- 42,850 : over 50%
US$42,850- 71,400: 24.3%
US$71,400 – 100,000: 3.6%
Over US$100,000: 0.8%

Related reading:
Crucial data you shouold know about when recruiting Chinese students (part 2)