Written By Xinwei Liu
English translation by Charles Qin
Edited by Elizabeth Winkelman

In March last year, Australia revised its’ student visa requirements, allowing overseas study applications from middle and senior school students.  These new student visas are attracting large numbers of students from all over the world, particularly among Chinese students. This has given the Australian education market and its related industries a huge boost.

Having tasted success, the Australian government are expanding their education pie: overseas primary school students are welcome here too!

In recent days, Australia’s Department of Immigration announced that the new policy on international student visas, the SSVF (Streamlined Students Visa Framework), for international students will be formally implemented on 1 July. For Chinese people, the highlight of the new policy is that Chinese primary school students can now come and study in Australia, as long as the applicant is at least 6 years of age. Family members wishing to accompany them in their studies can apply for a visa with their child, and at the same time, as the child obtains the student visa they will also receive an accompanying Student Guardian visa. This move signals the liberalization of Australian education for China.2

From 1 July 2016, Australian primary schools will formally accept overseas applications for Chinese primary school students.

In 2015, there were 93.6 million students in Chinese primary schools.

In October 2015, China released its new two-child policy. In 2017 China will see a peak in child births, with an approximate newborn population of between 22-30 million. Six years on, they will become the first batch of primary school students from the two-child policy. This means that by the year 2023, the number of students studying in primary schools in China will reach over 100 million. This is a massive and long-term cyclical market.

Furthermore, after the release of Australia’s new international studies and migration policy, on this occasion China has been the only country to receive a comprehensive streamlining of its international student visas. Under the new policy, Australia’s international student visas will be simplified from its current eight major classes to two major classes: the 500-class (Student Visa) and 590-classes (Student Guardian Visa). This means that from the 1st of July, regardless of study electives, all international students will be applying for the same student visa class (sub-class 500). This change indicates a welcoming attitude to international students from the Australian government. Streamlining the visa classes has made visa requirements more uniformly consistent and clear, and this will provide students who have a genuine desire to study abroad with more accessible visa pathways.

Australia’s streamlined visas, and gradual release of various policies to lower the threshold for migration is intended to implement the government’s plan to double international student numbers, attracting more overseas students to come and study in Australia. By 2025, the number of Australian international students will rise from 500,000 at present to 1 million. There is no doubt that Chinese international students will be in the majority.

This major student visa reform will provide Chinese families with an unprecedented opportunity and the trend for Chinese students to study abroad in Australia will strengthen once again.

In the first quarter of 2016, a total of 29.4% of Australia’s international students were Chinese international students – a historic high for a first quarter. There were a total of 46,400 Chinese international students in the first quarter, an increase of 23% over the same period last year, marking the high.

The Australian government’s relaxation of overseas study requirements for Chinese students is not just a friendly dispensation towards China, but more a hope that after a doubling of Chinese international student numbers will stimulate Australia’s economic development. Data released by Australia’s Bureau of Statistics indicates that until March, the export value of Australian education had risen by 12% to AUD $19.7 billion compared to the same period last year.

 

3The debate around overseas education 

A young, impressionable child, at the beginning of their formal education, is suddenly thrust into an alien environment.  The implications stir great differences in opinion on the benefits of an overseas education.

Some parents are not hesitating and welcome this new policy. It could turn out like this well-known Chinese tale: a father from Beijing, in preparing to give his child an advantageous education spends half of his life’s savings to buy his child an expensive property in the location of their study so that the child could be accepted into an Ivy-League school. Yet upon sealing the deal, the father faces exponential property price hikes and angrily leaves China instead.

In contrast, and with the Australian government’s release of the primary school visa, quite a few Chinese families will be considering accompanying their children to Australia to study. At the end of the day, in Australia – a land full of beauty – one can also enjoy clean air and safe food while taking care of one’s child.

There are those, however, who believe that a better foundation education can be found in China, and more fitting for the children’s needs in terms of future competitiveness. Some parents will not consider overseas study for their children during primary school.

Some people, although enticed by the idea, are still waiting for the release of related policies, such as on accommodation, parental arrangements, higher education after primary school, the cost of overseas study, and future migration options. They remain undecided.

There are those, even among local Australians who are concerned about whether Australia’s current education arrangements and support resources will be adequate with the release of this kind of policy.

Some education experts believe that due to China’s steadily worsening environmental and ecological problems, Australia’s release of this policy will certainly attract the attention of many people in China. In any case, it is not necessarily deserving of promotion from the point-of-view of children’s education. They hold that for primary school students, apart from a school’s foundational education, their family education also exerts a decisive influence, and if, on account of children studying abroad, the father or the mother needs to go and look after the child, then the family unit will be separated over two locations causing deficient family education, and the negative impact of this on the child’s development are enormous; should one adopt a steely attitude and send the child overseas to be cared for remotely, then this is equivalent to the parents relinquishing their responsibilities in educating and raising the child, and the lack of a parental education could prove detrimental to the child’s healthy development.

In addition, in education, one has to be very particular about continuity, particularly during the child’s developmental phase. Whether or not one can naturally continue in one type of education will have a great impact on the child. Due to cultural and individual differences as to the child’s own adaptive capabilities, once one has gone to study abroad and reached a certain point along the road before being unable to continue and then return to China, these two completely different education systems will make it hard for the child to make a smooth transition. This will prove a severe test both to the child and the parents.

Finally, primary school is in fact a key stage in a child’s acceptance of their traditional cultural values, and Chinese people also place great emphasis on the continuance of their own traditional culture. Perhaps these differences will be hard for a child to reconcile.

Irrespective of the differences of opinion in people’s responses, it cannot be denied that allowing one’s child to study overseas at a suitable stage has for some time already become a mark of a Chinese family middle-class status.

 

China’s Tide of Overseas Study

Well-educated and wealthy Chinese students have become “hot cakes” fought over by the world’s leading education markets to raise their economic revenue.

The year 2008 was a landmark for change in the numbers of China’s overseas students leaving the country. From that year on, there was double digit growth in the number of Chinese international students leaving China, after which a growth rate of 25% or higher has been maintained for every year since.

In 2015, the number of Chinese international students leaving the country broke past 500,000 for the first time.

At that time, China  also became the number one source of international students for multiple countries including America, England, Australia and Canada. In response to these trends, and to satisfy the needs of Chinese parents, many countries released policies favourable towards Chinese international students.

Expert research reports indicate that there was a marked increase in the proportion of Chinese high school students choosing to leave the country to continue their high school education or directly attend university in 2015. In comparison to 2012, the proportion of students completing high school classes in China before leaving the country to attend university dropped from 61% to 44%, whereas the proportion of students leaving the country to attend high school rose from 17% to 27%.

Statistics from China’s Ministry of Education indicate that there has been a 20% to 30% year-on-year increase in students going abroad to attend high school every year, and an increase in students taking part in “university entrance exams in a foreign country” after their high school graduation to attend university overseas.

Likewise, there has been a continuing drop in the number of people taking the ‘Gaokao’ 高考final examinations in China. According to statistics from China Education Online, up until the 28th of May, and for 22 provinces (and autonomous regions) including Beijing, Jiangsu, Hubei and Zhejiang, and in the number of those registering for the 2016 high school Gaokao exam, there was a drop of varying degrees in Gaokao exam registrations in 13 provinces this year. Among them, provinces such as Beijing, Liaoning and Jiangsu experienced a new low in recent years. In investigating the cause, apart from the main factor of a reduction in the population of school age students, a continued growth in the flow of students going overseas and a marked increase in the number of people choosing to leave the country during their high school phase or giving up the exam entirely to study abroad is also a key reason. The report pointed out that according to the education department’s most recent figures, the number of people from China leaving the country to study abroad in 2015 reached 52.37 million, an increase of 63,900 people over the same period last year – a new high.

Recently, New Oriental, the overseas study organisation released its “2016 White Paper on Chinese Students Studying Abroad”, interpreting major trends in Chinese students studying overseas.

The White Paper indicated that the age at which young Chinese international students have been going to America has been getting younger and younger. Many parents not only plan to send their children to attend high school in America, but even to send their children to study in America from grades 7 or 8, in order to help them take up American high school education at an earlier age.

Due to multiple reasons such as the liberalization of America’s visa policies, there has been a stable 10% year-on-year increase over the last three years in the numbers of private American schools accepting international students in order to satisfy Chinese student needs. Data indicates that the numbers of high school students going to America in 2015 was 1.5 times higher than in 2013. More and more young international students are choosing to make their way out of China while at high school, middle school or even primary school, and the waves of those going for international study in America has already moved from undergraduate and postgraduate level to the high and primary school phases.

There is ever fiercer competition when applying for boarding schools in America; many American boarding schools only accept five to six Chinese students yet receive between 200-300 applications. This has led to many Chinese parents concentrating on a school commuting option. Today, those commuting find an ever-scarcer supply of homestay families nearby, and a gradual tendency for parents to come to America to accompany their off-spring in their studies or to migrate.

Compared to America, Australia is even more attractive.

At present, the main target student group for China’s overseas study market has started to enter the generation “00s/70s” era. Parents born in the 70s are a group typically of three “highs”: a high level of education, a high level job, and a high level of income, and they are willing to invest more into their children’s education. So, what about the generation “10s/80s” era, with “80s” parents who are genuine members of ‘Generation Internet’?

They are even more committed.

Some organisations forecast that along with the gradual release by countries of new international student policies such as Australia’s, there will be a markedly “super young” trend in the Chinese overseas study market from 2016, and the proportion of young international students in China will only increase.  At the same time, the “super young” trend will gradually become more distinct and an increase in primary school international student numbers below high school level will markedly rise.  This trend will impact second and third tier Chinese cities, and many internationally-famous schools around the world will set their sights on these markets.

International students have arrived. They are not just coming to Australia to study. They are also going to benefit Australia in multitudinous ways.

 

4International student consumers

That education investments are flowing to overseas markets in large quantities is already an incontestable fact.

Following closely on the heels of education investment is a whole new bevy of living expenses and other investments, from property, cars, food and drinks, fashion brands, to hair salons, nail salons, and karaoke bars. In every facet where Chinese international students spend, they spend big.

“Attracting Chinese international students is an extraordinarily profitable business.” The English media has stated that the international student industry is an industry second only to petroleum and coal exports in its revenue generation.

In a recent article, Australia’s “Daily Telegraph” stated that the country’s education industry was an “exporting department, with very attractive profits to be had.”

In the greatest numbers are Chinese international students in Australia, being one-third of the overseas student population. This signifies that China’s enthusiasm for studying in Australia has become an important source of power driving Australia’s economic development, with a top contribution rate to the Australian economy. Every year, spending by Chinese international students in Australia ranks first among all the major overseas study countries.

The “Chinese Cross-Border Consumption Index Annual Report” published by Xinhua EID-Visa indicates that in terms of average spending, consumption by Chinese international students in Australia is on average about 20% higher than for America.

From a calculation of the related data provided by Visa, if we assume that the per capita level of spending for Chinese international students in America is set at 100, in which case, the per capita consumption of Chinese international students in Australia would be the highest, with the consumption index being 121, which is to say that the per capita spending of Chinese international students in Australia is approximately 20% higher than for Chinese international students studying overseas in America in one year.

Against a backdrop of globalisation and the internationalisation of education, and along with the pace of development of China’s economy, international study is no longer the prerogative of the rich and the powerful. China has already entered an era where the basic financial situation of average families is sufficient to pay for the expenses of overseas study.

 

International Education Agents

The first round of investment in studying overseas is typically handed over to an international education agent.

The groundswell of enthusiasm for overseas study has lent the international education agent service industry an enormous business opportunity. The size of China’s overseas studies industry exceeded ¥200 billion RMB two years ago.

Fees charged by overseas study organizations will uniformly exceed ¥10,000 RMB when applying to countries such as England, Australia, and Canada, and the fee for applying to America is even higher.

Many Australian universities implement a student recruitment agency system, and have gradually made their way to China seeking out agencies who will promote their own “products” (courses) within designated areas. The source of the agency’s income will include advertising fees paid by the school or a commission on sales volume for the “products”. Given this kind of system, and the market trends, there are even some agents who have already begun to put a “no charge” service into place.

 

Migration Agents

Equally as happy as international education agencies are about overseas study are the major migration agencies.

If one is going to come to Australia to study during primary school, then after all those years, and unless due to exceptional reasons, it is hard to imagine such a student going back to China’s education system to continue their studies. And so for the vast majority of students, they will maintain their overseas class attendance and, for most parents, they will keep accompanying them. In such a pattern, seeking migration then becomes a necessity.

The Canadian government welcomes international students to stay and work after graduation and contribute to the country, thus they have opened up a type of experience-based migration, which is very beneficial for international students. After graduating, the international student need only have one year’s work experience in Canada before they can apply for experience-based migration and become a Canadian Permanent Resident.

There are also many parents who cannot even wait until their children have grown up to then migrate. Many investment-based pathways to migration such as the 188 and 132 visas are laid out before them, and given only the sufficiency of their resources, one would believe that most parents would be giving prior consideration to this.

 

The Local Property Industry

A July 2015 investigation of China’s wealthy elite by China Confidential, an investment research service under England’s Financial Times, found that over 60% expressed that they were planning to increase their overseas property holdings in the next two years. Out of the various kinds of property choices available, houses were the most favoured type of investment. Over 38% of respondents also viewed the primary reason for overseas investment was to enable their children to enter a good school. Many parents sending their children overseas to receive a Western education purchase local property in order to ensure that their children can attend a top school.

In recent times, and in order to control skyrocketing property prices, the Australian government has released successive policies proving unfavourable to overseas property investors: from the Reserve Bank requiring major commercial banks to tighten up their overseas income-based loans to the government ramping up foreign property purchase application fees and stamp duty, this has led to Australia’s housing markets, particularly the apartment market, wavering on a precipice, and has impacted countless numbers of Chinese investors. Thus, for the Australian government to liberalize overseas study visas is without question an alternative pathway to allow large numbers of potential Chinese buyers into the Australian apartment market.

The international student real estate market is enormous. News of international students frequently putting down $1 million AUD on property in Sydney and Melbourne is no longer out of the ordinary.

As the new overseas study policy expands the international student market, so too will the international student property market continue to expand.

 

Not long ago, England’s Legatum Institute published its global Prosperity Index and, among the most prosperous countries within, Australia was placed seventh. However, the world ranking given to Australia’s education industry was number one.

Chinese parents: Australia welcomes your children! Just please make sure they bring enough money!