Australia Mines China Education Boom

China’s voracious appetite for Australian minerals helped the resource-rich nation sidestep the global financial crisis. Now, as a fading mining boom dims economic prospects down under, China’s growing middle class is presenting itself as the raw material for a different kind of growth industry: education.

A recent survey of 1,000 mainland Chinese by HSBC ranked Australia as Asia’s top education destination. It lagged only the U.S., the United Kingdom and Canada globally. Singapore was its closest rival in Asia.

Reuters

“The results show that Australia is front of mind for Chinese students,” said Graham Heunis, head of retail banking for HSBC Australia. “International students will be critical in developing cultural ties within our region as they often stay in Australia long term, working in Australian companies.”

International education was Australia’s fourth-largest export last year after iron-ore, coal and gold, generating about 14.5 billion Australian dollars (US$13.3 billion) in export revenue, government figures published Thursday showed. International students account for about a quarter of all students enrolled at Australian universities.

That’s an outsized contribution for a geographically isolated nation of a little more than 22 million people, said Geoffrey Garrett, dean of the University of New South Wales’s Australian School of Business. Still conditions have been “much tougher” since the financial crisis, he said, as universities in the U.S. and elsewhere have stepped up competition for international students in response to government funding cuts.

The industry has also been hit hard in the past few years by a strong Australian dollar, which until recently had recorded its longest stretch above parity with the U.S. greenback in three decades, making the nation’s exports less competitive.

A recent government paper found it cost about A$44,000 a year to study and live in Australia, A$7,000 more than in the U.S. and A$14,000 more expensive than in the U.K. Australia experienced a 12% drop in international enrollments between 2010 and 2012, official figures showed.

Since the start of May, though, the Aussie dollar has fallen about 11% against its U.S. counterpart, spurring hopes of a revival in student numbers.

“The recent depreciation of the Australian dollar, if sustained, should improve the price competitiveness of our education services and is likely to drive increased international student inflows,” Australia New Zealand Banking Group analysts said in a research note.

There may be ancillary benefits for other weak sectors of the economy, such as home sales and business investment, with the survey showing increased interest among the parents of Chinese children studying in Australia to invest in or purchase property in the country, HSBC’s Mr. Heunis said.

And those who have at least $A5 million to spare could translate that interest into an investment visa, bringing even more of China’s riches to Australia.

– Rachel Pannett

Like China Real Time on Facebook and follow us Twitter for the latest updates.

Australia Mines China Education Boom