Chinese students spark gold rush
Foreigners pay top dollar for education, filling the gap left by falling commodity prices
In Asia, it’s the dragon mother phenomenon. Education is terribly important to thefamily.
ALAN OLSEN
EDUCATION CONSULTANT
I n Ballarat, where the first mass Chinese migration to Australia was sparked by a 19th-century gold rush, Federation University is tapping its modern equivalent.
Chinese students are flocking to Australia, making up a fifth of about 400,000 people seeking an education Down Under. At Federation, more than 44 per cent of the students attending Australia’s newest university come from overseas with most paying fees that are about double those paid by locals.
Education is now Australia’s fourth-largest export with record revenue of 16.69 billion Australian dollars ($13 billion US) last year, as a relaxation of visa rules helped draw more students. It’s a bright spot in an economy that is growing below its potential after an estimated 60 per cent plunge in the price of its biggest export to China, iron ore.
“The growth drivers in Australia will lean very heavily on services and education is the leader,” Australia’s Trade Minister Andrew Robb said in a phone interview. “It won’t just be doubling in income in a decade, it’s potentially two-and-a-half times the size.”
Education exports will hit 30 billion Australian dollars by 2020, according to Alan Olsen, director of consultants Strategy Policy & Research in Education Pty. Australia is the country of choice for foreign students after the U.S. and U.K.
“There is demand globally for degrees, and students from China will travel to get the degree they want,” he said by phone. “In Asia, it’s the dragon mother phenomenon. Education is terribly important to the family.”
The number of people on student visas at the end of October was greater than the population of the capital city Canberra, according to government data. Students from China were the largest group, making up 21 per cent of the total while 14 per cent were from India.
“It’s the demand out of China, Singapore, Malaysia, India,” Rod Jones, founder and chief executive officer of the country’s largest listed education business, Navitas Ltd., said by phone. “They have plenty of universities there but they just cannot keep up with the demand from the population growth.”
Navitas, which offers mostly pre-university courses to more than 80,000 students each year in Australia and 26 other countries, has seen its shares more than double in value over the past five years. The number of foreigners studying in Australia has recovered from a slump in 2012 when a strong currency, tighter regulation and bad publicity after a series of attacks on Indian students in Melbourne in 2010 deterred applicants.
Not only are the foreign students plugging an export income gap for Australia left by falling prices for key commodities, they’re also providing another source of revenue for universities.
“The universities need the revenue from international students: They charge them fees that are way in excess of what domestic students pay,” Andrew Norton, director of the higher education program at the Grattan Institute, a non-partisan think-tank, said by phone from Canberra.
Overseas students studying for Federation University’s Bachelor of Business take a threeyear course costing 20,000 Australian dollars a year. Domestic business students pay 10,266 Australian dollars a year, thanks to government subsidies.
The loosening of visa rules has been “the biggest factor in the turnaround,” Norton said.
Many foreigners use higher education and related job placements as a path to citizenship, he said.