Chinese students paying double spark Australian gold rush
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Sydney: In 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 some 400,000 people seeking an education Down Under. At Federation, more than 44% 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 A$16.69 billion ($13 billion) 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 about 60 percent 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 30 March. “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 A$30 billion by 2020, according to Alan Olsen, director of consultants Strategy Policy and Research in Education Pty. Australia is the country of choice for foreign students after the US and UK.
“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% of the total while 14% 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 stock rose 3.9%, the most in nearly three months, and was trading at A$4.935 at 12:52 pm in Sydney Tuesday.
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. “It’s a hugely profitable business, and huge profits attract players.”
Overseas students studying for Federation University’s Bachelor of Business take a three-year course costing A$20,000 a year. Domestic business students pay A$10,266 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.
Yufeng Zhang, a 24-year-old engineering major from Guangzhou who’s president of Sydney University’s Chinese students’ association, says he can’t say whether his four-year degree has been worth the expense.
“Australia’s a nice place to live, and more safe than America or the UK,” he said. “But in China they spend much less money.” Bloomberg