Improving outlook for outbound Chinese students in 2024

Despite China’s troubled post-pandemic economy, which could affect those seeking education overseas, there are signs of increasing preparation for study abroad by families in China, as an education consultancy predicts improved outbound student flows from China in the coming year.

While most of the popular destination countries for Chinese students did not see growth in 2023 – with a notable decline in enrolments in the United States – there was a drop of 2% in 2022 compared to the previous year, following a 9% decrease in 2021 to 2022 and 15% drop in 2020 to 2021, according to reports from the US-based Institute of Education Sciences.

David Weeks, co-founder and chief operating officer of Beijing-based international student recruitment consultancy Sunrise International stressed that “China is an irreplaceable market” for universities overseas.

In a webinar last month outlining “Six key trends in China that will shape (international) Student recruitment”, Weeks pointed to a recovery in outbound Chinese student enrolments in the coming year. In particular, big increases in enrolments in international schools in China could feed into the study abroad market and may be able to partially counter China’s economic downturn which is affecting Chinese families’ study abroad plans.

Despite some optimism in early 2023 as travel to China opened up, after its strict Zero-COVID policy, with some foreign students allowed back in January, 2022 was a rough year for China’s economy, Weeks acknowledged.

This had led to a “feeling of social malaise” in the country including low economic confidence and reduced consumer spending, feeding into study abroad plans.

“You can expect a bit of a reversal from this old idea that Chinese families are not price sensitive,” when it comes to international education, Weeks said. “Increasingly, you'll see that Chinese families will take a more balanced view of the quality of education, but also the value of that investment,” he added.

Economic outlook affects recruitment

Weeks noted China’s GDP growth – which slowed to just 3% last year, one third of the 2021 level and the worst on record since 1990 – “influences how many students have the ability to afford a study overseas experience or education abroad. If we see a decline in GDP growth rates, then you might expect that that would actually increase or accelerate study overseas for China's ultra-wealthy. But for the middle class and upper-middle class, this would naturally contract the size of the market”.

This meant “more dialogue and conversation about affordability and return on investment for tuition spent”, in Chinese families in second and third tier cities, according to Weeks.

The outlook for 2024 student recruitment would to some extent depend on GDP growth, Growth over 4.6% “would be good news” for outbound student flows, Weeks said, adding any signs of a recovery or stabilisation of the currently wobbly property market in China would also be important.

“Property makes up about 30% of China’s GDP. And when Chinese families pay for very large investments like international tuition, oftentimes they sell property to fund that investment. So, the property sector is doubly important for education abroad,” he said.

China’s property sector took a tumble in 2022. In October 2023 it remained flat. But Weeks noted that the economy was not all doom and gloom” with some positive signs as 2023 ends. “In the third quarter of 2023, (China’s) GDP growth was actually at half a point higher than expected. Consumer confidence and household spending are increasing from their 2022 slump, and GDP growth predictions have been revised upwards,” Weeks said.

How unemployment affects study abroad

Another key factor for overseas study is China’s own youth unemployment. In June 2023, youth unemployment for those aged 18 to 24 in urban areas reached 21.3% – a record high. The following month the government stopped reporting the youth unemployment rate.

“You never stop reporting good news so it’s probably higher than that,” said Weeks, pointing to a report from Peking University this year suggesting youth unemployment could be as high as 46% because some graduates had stopped looking for jobs.

While it is mainly a domestic phenomenon, it could have an impact on applications for universities overseas, he said.

“Students are graduating into a difficult economy. This means that they are looking for ways to set themselves apart in a difficult job market. For some students getting a masters degree is a way to do that.

For some students an overseas graduate degree is more attractive because there are a limited number of places at China’ top 10 universities for graduate programmes,” he explained.

Overseas study can also be an important differentiator for returnees. A recent study by China’s Liepin.com job recruitment platform noted a 12.37% increase in jobs favouring overseas degrees in 2023 compared to the previous year, including special pathways into coveted civil service jobs.

“As youth unemployment continues, we expect that might be good news in the medium term for overseas graduate recruiters,” said Weeks.

Fewer delaying study abroad

According to Sunshine International’s own surveys of around 2,000 students in second and third tier cities, the proportion of students changing their plans from study abroad and instead pivoting to domestic has gone down in 2023 compared to 2021. “We’ve seen a radical drop off in students delaying study overseas plans,” said Weeks. The proportion of students who originally planned to stay inside China for university and instead pivot to study overseas, went up from 3% in 2021 to 15% in 2023.

He pointed to push factors, such as the difficulty of the highly competitive Gaokao national college entrance exam, and big class sizes in universities in China, and big drop off in quality outside the top 10 universities in China despite rising in international rankings year after year.

A 2023 White Paper by Chinese education group New Oriental Vision Overseas Consulting Company included a survey of 8,000 students at international schools and public schools, finding that while the US remains the most preferred destination post pandemic for undergraduate education, there has been an increased preference for Hong Kong, Japan and Singapore pointing to preference to study closer to China in countries considered safe. During the pandemic, Hong Kong, Japan and Singapore had very rationalised and very robust COVID protocols and protections.

International school growth

Many Chinese families choosing to keep their children at home during the pandemic led to an increase in 2023 of Gaokao takers, with more still choosing domestic universities this year.

Gavin Newton-Tanzer, co-founder and president of Sunrise International, noted huge growth in international school enrolments which feed into overseas universities will mean significant upturns in those applying abroad.

Explosive growth of international schools in recent years continued throughout the pandemic. “Throughout 2020, 2021 2022, you are still seeing international schools being created inside of China,” Newton-Tanzer said. “Many of these were related to pre-existing projects or projects that have been determined in advance, but it still goes to show how much momentum there is,” he added.

An additional 21 new international schools opened in China in the past year bringing the total number of international schools in China to 970. These include private international schools (three quarters of the total), official international departments (9% of the total) in public schools, and international schools for non-Chinese nationals (16% of all international schools) running overseas curricula.

Most choose the international school route at high school level – from 10th grade for the three years to university entrance. A study from Boston College in the US showed enrolment growth in 103 monitored international schools in China was 25% last year (2022) for the total 10th grade population, and 50% this year.

This bodes very well for future undergraduate recruitment, and the number is growing significantly beyond the large metropolises, said Newton-Tanzer. “We’re starting to see significant growth among that 10th grade class, which is obviously an indicator of what we can expect in two to three years from now in terms of growth of undergraduate students,” he said.

The vast majority of these 970 schools are relatively small, most of them just with three grades catering to the 10-12 grade high school cohort preparing for foreign school leaving qualifications.

With reforms brought in before the pandemic to control what is taught in the burgeoning international schools’ sector many high schools transitioned away from public international departments mainly to become private international schools, though international schools for non-Chinese nationals continue to exist.

“We’ve even seen a significant decline in some of these schools as they’ve struggled throughout the pandemic to identify and recruit enough children of expats that are eligible for their schools. We’ve even heard talk of some of these schools converting into private international schools to serve that domestic Chinese population as time goes on,” Newton-Tanzer said.

Even with schools following a specific curriculum for a particular country, this growth could affect multiple destinations for undergraduate study as students are increasingly applying to schools in more than one country.

A survey this year of 144 high schools from China Institute of College Admission Counseling, a counsellor collective in China, found that the majority of their students were planning to apply to universities in different countries. Just under a third or 31% confined themselves to applications to one country, 37% to two countries and 24% to three in 2024.

“We’re going to continue to see this trend of students hedging their bets and applying to schools in multiple countries,” observed Weeks. This has been made easier by the move towards optional testing in the US, he said.

Weeks was upbeat about prospects of a revival of Chinese outbound flows to the US even though some destination countries haven't seen a growth in Chinese students and are turning to recruit students in India.

“China’s upper-middle- and upper-income population is more than 14 times that of India,” Weeks pointed out, and added that China represents more undergraduate students in the United States than the next six countries combined.