There can be no doubt that China’s miraculous economic boom is slowing.
Miraculous, because China’s economy has grown over 10% per year for the past 20 years, according to official government data, an amazing feat, particularly for such a large economy. China now has the largest middle class in the world, with 109 million Chinese with wealth between $50,000 and $500,000. Dueling reports from consultants have the number of millionaires in China at over 1 million millionaires, according to Bain & Co, and at over 4 million, according to Boston Consulting Group. In either event, it’s a lot of rich Chinese families.
But slowing, based on all of the data available. Even the official Chinese government numbers, which many view skeptically as overly positive, show GDP growth below 7% in the latest quarter.
The stock market crash, where the Shanghai Composite Index lost 34% of its value from June to September this year, also got a lot of attention – how will it impact household wealth, and consequently student’s access to international education?
Slowing Growth Rate of Chinese Students in the US
Naturally, a faltering economy can reduce student mobility, particularly for a market as expensive as the US, so much attention has been focused on whether the rate of growth from China will slow. On that point, there is no debate – the rate of growth in the number of students from China has been slowing for 6 years, starting from the growth high-point of 29.9% in 2009/2010, the year that China took over the top spot from India.
As the overall number gets bigger, it naturally gets more difficult to grow at the same rate. China’s 10.8% growth this year in actual student numbers was 29,601 more students, about the same as India’s 30,215 growth in numbers, but for India, #2 on the list of sending countries to the US, it was an astounding 29.4% growth. To look at it another way, the raw numbers of Chinese students in the US grew this year by more than the 29,587 added in 2009/2010 school year, the year that China had its highest growth rate.
But in addition to the simple fact that growth rate will slow as the raw number climbs, Todd Maurer makes the argument in his June 16 post that 5 factors will slow inflow of Chinese students:
1. China’s available pool of high school students is shrinking
2. Increased enrollment from China will need to come from lower-income demographic regions of China – not from the big metro areas of Beijing, Shanghai, Nanjing, Chengdu, Guangzhou and Shenzhen
3. Scarcity value of a US degree in China is decreasing as more students go abroad and go deeper into the pool of US schools
4. China has rapidly developed quality higher education options for students at home in China
5. Certain very popular parts of US higher education system have reached saturation with current numbers of Chinese students
I won’t try to rehash each of these points here – read his excellent blog post for that. But he makes a compelling case, not so much based on economic slowdown as on these other factors. Of course, the financial impact to families from a weakening economy play into some of these factors, particularly #2, as the assumption is these students are less financially secure than those from the big cities, and #4, as home-grown options cost less. We have already seen data showing a slowdown in Chinese graduate students. The Council of Graduate Schools reports that the number of graduate applicants from China to US schools was down by 1% this year, following a 5% decline last year.
But Still Some Growth Left
But even Maurer’s post anticipates continued growth from China, in the range of 2.5% – 5% compound annual growth. And John Hudzik, quoted in a September 11 Inside Higher Ed article, makes the point that saving for education is a long-term commitment for middle-class Chinese families, and there’s already a tremendous pipeline of high school students abroad and English learners. Rahul Choudaha, in his own piece in the University World News, seems to agree, arguing that the US continues to have the strongest allure among Chinese students as compared to other top English-language destinations. He contends that growth will continue, but shift away from self-funded graduate students to high school students, undergraduates and well-off “explorers.”
So where does this leave us? With a slowing Chinese economy and a slowing growth rate from China, for sure, but that’s not the end of the story. Most commentators seem to agree that we’ll continue to see some growth in the number of students from China – that alone is significant, considering the size of the current population. There also seems to be some consensus that unless it becomes more extreme and more prolonged, the economic slowdown in China won’t have a big impact. At some point, though, there will come a tipping point, when all of the factors examined by Todd Maurer will actually freeze, then even start to reduce, the number of Chinese students in the US. And when will that be – 3 years, 5 years, 10 years from now?