The China opportunity

UK universities are uniquely placed to recruit Chinese students deterred from US study by souring geopolitical relations. But are they doing enough?

When Donald Trump’s trade tariff war and threats to cap the number of Chinese student visas began, it was thought it would lead to many of the annual 350,000 enrolments coming from China to universities in the United States being diverted elsewhere, including to the UK. But that was the beginning of 2018, and it never happened.

Despite the threats to cut university places, trade sanctions and aggressive rhetoric, the number of course applications from China changed little. But the issuing of an arrest warrant and subsequent detention of Huawei chief financial officer Meng Wanzhou was a step too far for many. 

Meng, a cult figure in China, is part of an institutional brand that represents the rise and confidence of modern ‘Chinnovation’ (China Innovation).

The $60m question

These new developments are considered a step too far for many future students, and now there is real movement away from the US as a study destination. The University of Illinois feels worried enough about the situation that it has insured itself for $60m of cover against an 18% or more loss of enrolment fees from China, and a survey conducted by the American Association of Collegiate Registrars and Admissions Officers (AACRAO) of 250 universities found that 25% have had a drop in undergraduate applications, and a 32% fall for graduate places. This is at a time when Chinese graduate enrolment elsewhere in the world is growing at more than 15% annually.

Chinese students account for 10% of all doctorates awarded in the US, with most of them in science and engineering, and 80% of doctorate holders stay in the US to work after they earn their degrees –there are currently more Chinese engineers working in artificial intelligence in America than in all of China.

But now future Chinese students seeking international study are starting to rule out the US as an option, and there is an opportunity for UK universities to recruit a demographic that, according to the Association of International Educators, ordinarily spends $12bn annually on tuition fees and living expenses.

However, recruitment prospects are not going to fall over themselves to come to these shores. They are highly discerning, and rival institutions in Australia, New Zealand and Canada are generally much better at promoting themselves to Chinese audiences than the majority of UK universities.

International options

Studying abroad is fundamental to the ambition of becoming an international business success. This is a massively strong driver that goes to the heart of wealthy middle-class China. Parents often consider it an all-encompassing goal for their children, whether it is to take the family business to new levels or achieve a senior position within a corporation. Qualifying in the West is viewed as an important stepping stone.

The opportunity to work after the completion of studies was a particularly strong draw for prospective US students, but the entrenchment of the White House’s position is creating reticence. Why commit so much to a country that may, at a moment’s notice, change the rules of study and work?

Yet the UK has its own reputation – difficult, rigid – to deter overseas recruits. Student visas are not so freely obtained from the Home Office as might be expected, given the level of qualifications held by many applicants and the amount of funding they bring to the UK, not to mention substantial political will to improve commercial relations with China.

What’s it worth?

Bringing finance into the UK does not end with tuition fees and individual living expenses, but widespread spending and investment by family. On average, Chinese students are visited by relations 3.3 times annually by what are necessarily wealthy relations that create free-spending holidays around trips to see those attending university. But many also buy private property near campuses and put down family and commercial roots by investing in businesses local to universities. These are growing trends. 

Nearly all Chinese students studying in the UK want the opportunity to work in the British Isles following graduation. And while work visas are currently difficult to obtain, changes are in the offing. The student work visa scrapped in 2012 is likely to be reintroduced to allow for six-month post-study work, with an additional six months for PhD graduates. In addition, the government’s recently published immigration white paper indicates company sponsorship of employees from overseas will be simplified and the salary threshold lowered (it’s currently £35,000). 

Doing it better

The UK remains a popular study destination for academic, business, cultural and historic reasons. Yet many universities have failed to update their recruitment strategies, and reports indicate that Chinese students who make the journey are having a worse time than those who stay at home.

One problem is the use of international agents, who often work on commission and, consequently, push the universities that pay the most or those that enable quick turnover of business. But despite inherent flaws in this model, it pales in comparison to peer and family recommendations, and to Chinese social media marketing, in terms of course and campus selection.

By focusing on better communication in recruitment, and paying more attention to the needs of Chinese students during their studies, UK universities have an opportunity to catch up with counterparts in Canada, Australia and New Zealand. 

A change in US administration might rapidly repair relations with China, so time is short. But the opportunity is there for the taking.

Comment: The iron is hot – it’s time for UK universities to strike

The University of Illinois has insured itself for $60m against loss in enrolment fees from students from China. Research into 250 US universities showed that a quarter have had a drop in Chinese undergraduate applications, and a 32% fall for graduate places. Chinese graduate enrolment elsewhere in the world is growing at more than 15% annually.

The 350,000 enrolments that normally benefit American institutions every year will not be diverted to domestic study in China. Middle-class Chinese families firmly believe study and qualifications from abroad are essential for career and personal development, and this is not being undermined because of relations with the US.

The situation presents UK universities with a significant opportunity, but they cannot expect to benefit automatically. Canadian, Australian and New Zealand counterparts have better offers and wellbeing provision for Chinese students, and overall their marketing is markedly superior. However, domestic universities can use the situation as a catalyst to catch up quickly and gain the advantages available. Large investment is not necessary.

The UK is very popular in China because of the culture, the iconic brands, the history and the business opportunities. They are all attractions that have created a huge growth in the purchase of British products, tourism and investment. However, while as an overall destination the nation has greater appeal than Canada and Antipodean rivals, universities have catching up to do in terms of wellbeing and marketing.

The majority of Chinese students already studying in the UK consider themselves to be treated too much as cash cows that, once enrolled, are left to fend for themselves. This sentiment is not lost on future students back home.

Improving student integration and providing work experience with local companies make an enormous difference as an enrolment draw, and is widely shared on huge Chinese social media platforms. Relatively simple steps make a significant difference, even in the short term.

Other common marketing mistakes are failing to tune communication to the research and decision-making cycle of future Chinese students, which is different to that of domestic counterparts, and not ‘closing the deal’ at offer stage when candidates inevitably hold application approval from multiple sources.

President Trump has created a scenario in which UK universities will gain little by doing more of the same, but has constructed one that enables those that do take the initiative to generate a much greater return than they previously would have. If there is a time to act, it is now.

Rocky Chi is head of planning at Emerging Communications, an Anglo-Chinese marketing agency based in London and Shanghai.

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