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LAST WORD: What if Developing Countries' Insatiable Demand for Western Education Eventually Subsides?
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What if Developing Countries' Insatiable Demand for Western Education Eventually Subsides?

By Tracy Hall

BT 201605 01 Last word UntitledGetting a high school education is a so-called 'no brainer' when it comes to economic value. It is obviously beneficial from a financial standpoint to complete one's basic studies with some degree of success. Undergraduate and postgraduate degrees on the other hand are far less guaranteed to be worth the time, money and effort in the long run these days. That is particularly true of certain subjects that have been termed 'Mickey Mouse degrees' by Western commentators. Nowadays it is easy to blow tens of thousands of dollars on a degree in golf management or 19th century British lesbian poetry studies then find yourself competing for the same low-paying jobs as people who barely scraped their way through high school. While it is still true that on average people who have degrees earn more than those who don't, it is still basic common sense to conclude that as more graduates are paying higher prices for education then having to compete with more people for fewer jobs a college education becomes a less attractive investment opportunity.

It is no secret that a lot of parents in developing countries – China, India, Vietnam and Thailand, just to name a few – hold Western education systems in extremely high regard. They consider the schools and universities in the Anglosphere and certain European countries to be far superior, for a variety of reasons – ranging from different teacher styles to placing more emphasis on creativity, than even the best domestic institutions.

BT 201605 03 Last word HLThe aggregate amounts of both overseas students and money that is being thrown into educating Chinese children in the West or in Western-style academic institutions in China is staggering. According to the most recent annual report by the American Institute of International Education (the IIE), there are more than 300,000 Chinese students in America at the moment. There are also more than 100,000 Indian and 80,000 South Korean students attending U.S. schools or colleges. There are also nearly 100,000 Chinese students studying in the United Kingdom. Although it is hard to determine exactly how many students from all the developing countries are currently studying in developed countries, a quick 'back of a napkin' calculation attempt puts it into the millions.

Traditionally the Chinese have been the largest group of overseas students across the globe, which is hardly a surprise given the size of the country's population, the pace of its economic growth and the value in which Chinese society places on education. Quite rightly, the age-old belief that good education automatically leads to economic opportunities is alive and well in the Middle Kingdom. Not only that but spending time studying overseas is a great way to increase one's social status due to the West's associations with better quality education, open mindedness and so on.

However, a wave of new evidence is being put forward that suggests studying overseas is becoming less valuable than it was in the past. Jennifer Feng, chief human resources expert at 51job, the leading Chinese employment agency, says there is "no big difference between the starting salaries of those holding overseas or local university degrees". Gone are the days when an overseas degree ensured a top-paying job. "The proportion of students studying overseas these days is high and what they study isn't particularly suitable to the Chinese market," Ms Feng says, adding that China is no longer sending only its brightest students abroad. Furthermore, some Chinese recruiters actually have negative perceptions of people who have studied overseas before they have even turned up to the interview. Liu Yinwei of Jinzun Investment Consulting was inundated with candidates at a recent job fair in Shanghai, but he was not looking for those with foreign degrees. He has sales jobs to fill and the last time he hired a returnee with a UK master's degree, "he thought he knew a lot and therefore...€‰he looked down upon clients".

BT 201605 02 Last word eduThere are some other factors that also changing Chinese parents attitudes towards investing in incredibly expensive overseas education. One of them is that eighty to ninety percent of the Western academic institutions that Chinese students are attending these days are not household names in China and therefore they don't hold anywhere near as much weight in the Chinese job market as Harvard, Stamford, Oxford or Cambridge. Then there is the pitiful reality the potential life experience of living overseas and becoming fluent in English or another important global language is completely lost on many international students, due to them living amongst people from the same nationality in order to shield themselves from culture shock.

Recent studies have indicated that in the coming years the number of Chinese and Korean students studying in the West will decline, and it remains to be seen whether or not the increasing demand from parts of Africa, India and other developing nations will be enough to keep the overall numbers and revenue as high as they have been in the recent past. If and when this decrease in international student numbers happens it is going to become a very grim reality that Western academic institutions will need to face up to. The amount of lost revenue and the amount of missing capital inflow into the wider economy will be huge. That is because tuition fees for a three-year arts degree at some of Britain's less famous universities is well above 10,000 GBP (109,000 CNY) per year. On top of that it costs at the absolute minimum another 7,000 GBP per year just for day-to-day living expenses. And that is just one student. When you calculate the total amount and multiple it by a few hundred then it is worrisome from a British standpoint. Multiple it by tens of thousands and spread that loss proportionally across the developed world and it becomes disastrous.

Right now Western universities are already coming under pressure from changing attitudes to the market value of their services domestically. That and the ongoing student loans crises aside, in some instances it is primarily the demand from China, India, South Korea and other emerging economies that is preventing universities from going bankrupt. If Western universities can no longer rely on a significant portion of the revenue they make from international students then there will obviously be some economic and organisational consequences. Who knows, maybe it will lead to a much needed restructuring of the educational systems and lead to the shutting down of "Mickey Mouse courses". In the short term, however, it will definitely be a big shock to the system for those dusty old academic toffs who are currently enjoying sexy salaries for sitting in an office and contributing very little, if any, economic value.


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