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Students from China get ready to take pictures in their graduation gowns at the University of Sydney on July 4, 2020, after the in-person graduation ceremony was cancelled during the pandemic. There are growing concerns that universities from the UK to Australia are too reliant on international student fees. Photo: Reuters
Opinion
Outside In
by David Dodwell
Outside In
by David Dodwell

Hong Kong’s surprising role in the global flow of international students

  • Pandemic upheavals have exposed the reliance of universities in the West, from the UK to Australia, on international students, particularly from China
  • Hong Kong’s role as a supplier of international students is also changing, not least as its universities also become good at attracting mainland students
David Dodwell
David Dodwell
Why you can trust SCMP
The Covid-19 pandemic and the US trade war with China have roiled the global economy and trade, triggering alarm in the West over supply chains. If security worries over rare earths, batteries, semiconductors, food and fossil fuel were not enough, spare a thought for the international trade in education services.

Adam Habib, vice-chancellor of the School of Oriental and African Studies in London, distils the issue: The United Kingdom is exposing itself to “astonishing risk” by being overreliant on China and India for international students.

Quintin McKellar, vice-chancellor of Hertfordshire University, has warned: “We also need to acknowledge the significant, negative impact that reducing the number of international students would have on the UK’s higher education institutions, as well as industry and the economy overall.”

The numbers illustrate the UK’s crisis succinctly. In 2021-22, of the 2.87 million students at UK universities, 23 per cent were international students. Students from China and India accounted for 51 per cent of those who were granted UK study visas – most of those for higher education. If China and India “turned the taps off”, Habib says, “75-80 per cent” of British higher education institutions would “collapse”.

“Beyond pure numbers, perhaps the greatest policy problem is just how reliant tertiary education sectors are on international student fees as a key funding source,” said researchers at the Mitchell Institute for Education and Health Policy at Australia’s Victoria University. “So many countries leverage these fees to resource the bottom line of education institutions.”

That involves not just undergraduate degrees, but also postgraduate and research activity often critical to a university’s reputation.

The UK is not alone. Australia relies on international students to fill 25 per cent of its university places. So does Canada. The United States, the world’s leading destination for international students, may be less reliant – international students account for just 5 per cent of enrolments at its 4,100 institutions.

But with over US$40 billion a year earned in the “export” of education services and more than 335,000 related jobs on the line, the past three years of pandemic-driven upheaval have raised alarm in the US too.

From almost 1.1 million in 2018-19, international student numbers in the US have dropped by over 13 per cent to under 949,000 in the 2021-22 academic year. Arrivals from China have fallen hard, by 22 per cent from 370,000 to 290,000, as the strict zero-Covid policy kept students at home, and as US attacks on China persuaded travellers to choose other destinations.

US earnings from these education “exports” fell from US$57 billion in 2019 to US$48.3 billion in 2020 to US$41.2 billion in 2021. This has generated alarm.

As the world starts to recover from the pandemic years, international student numbers have begun to rebound, mainly in Canada and the UK. But Australia and New Zealand, which kept their borders shut for longer, are still seeing numbers far below pre-pandemic levels.

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Are UK university vice-chancellors justified in their alarm about China and India turning off the tap? From India and China, the answer seems likely to be “no”. While universities in India and China continue to improve, their capacity to satisfy local families’ demands for the best possible university education is likely to remain low for years, perhaps decades.

Beijing-based education consultant Sunrise insists that “the push factors that motivate students to leave China remain firmly entrenched in the Chinese education system”.

It blames frustration with China’s extraordinarily tough gaokao university entrance examinations and the highly restrictive hukou, the household registration system that makes it difficult for urban migrants or the rural population to access China’s better universities. It refers to a British Council study that claimed almost one-tenth of parents of school-age children wanted their child to study abroad.

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There is a surprising Hong Kong role in the global story on international students. First, and idiosyncratically, Hong Kong has for decades been an important source of international students for universities across the UK, Canada, Australia and the US, and this has been boosted since the political turbulence of 2019.

In recent years, Britain’s British National (Overseas) visa scheme has attracted over 150,000 Hongkongers, many with children keen to take advantage of schools there.

But second and of much greater significance to universities in the UK, US, Canada and Australia wringing their hands over international student flows, is the increasingly significant role of Hong Kong’s universities as exporters of education services. Of the 93,000 full-time undergraduate students in Hong Kong’s 22 degree-awarding institutions last year, more than 13,000 were not local, and most are from the mainland.

Graduates take photos at the University of Hong Kong in December 2022. Photo: Dickson Lee

Hong Kong’s universities are rapidly building campuses on the mainland to attract students there, and to build links for local students. The Hong Kong University of Science and Technology has a new campus in Nansha, City University of Hong Kong has one in Dongguan, and Baptist University one in Zhuhai. Chinese University has a Shenzhen campus. The University of Hong Kong also has business school campuses in Shenzhen and Beijing.

In so far as Hong Kong’s universities succeed in attracting more mainland students, diverting them away from Western countries paranoid about national education security, they can only fuel the concerns of university administrators who need to balance their books, but have no way of doing this without over-reliance on international students – whether from China, India or elsewhere.

David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades

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