Why Chinese international students turned backs on Australia

Several commentators have warned that Australia’s long boom in Chinese international students is finally coming to an end, brought about by the US-China trade war, a weakening Chinese economy and yuan, as well as souring relations between Australia and China.

Here’s Bloomberg’s Michael Heath:

Australia is losing its appeal for Chinese tourists and students as the harmful trade war between the U.S. and Beijing, paired with a slowing economy at home, spooks them into staying put.

The number of visitors from China increased just over 1% in the 12 months through July, matching the weakest rate in nine years, while the growth in students traveling Down Under to attend university has also slowed rapidly. Even a weakening Aussie dollar hasn’t managed to halt the downturn.

“We suspect the trade dispute is a large reason for the decline,” said Hayden Dimes, an economist at Australia & New Zealand Banking Group Ltd. It “creates uncertainty for both visitors and, in particular, students.”

The New Daily’s Michael Pascoe has raised similar concerns:

The combination of Chinese demand, reduced Brazilian production and a weaker Australian dollar has delivered a trade bonanza, lifting the GDP growth count and providing windfall tax income for a federal government budget surplus.

But it’s the services side of our China trade (tourism and education) that does most for job creation here – and there’s been no effective growth in Chinese visitor numbers for two years…

Chinese travel agents, for the first time in years, were not increasing the number of forward hotel bookings they made in Australia in 2019.

“Travel agents in China and analysts also warn that Australian tourism is vulnerable to any moves by Beijing to ‘weaponise’ its services industry…

These warnings come after China’s authorities last month rolled-out a raft of measures to stem capital outflows and protect the yuan from depreciation.

The most recent international student enrolment data from the Department of Education does indeed show that Chinese student growth is fading. Chinese student enrolments increased by just 4.3% in the year to June 2019, versus 15.1% growth in the year prior:

However, there is a bigger story with the crash in Chinese student visa applications, which are a forward indicator for enrolments.

According to the Department of Home Affairs, visa applications granted to Chinese students fell by 3.3% in the second half of 2018 versus the same period in 2017:

Moreover, the falls continued in the first half of 2019, down a further 3.3% compared with the same period last year:

Therefore, the Chinese international student boom looks to be on borrowed time. And any decline will have an acute impact on Australia’s universities and economy, given our world-beating over-exposure to China:

So, why have Chinese student and tourists stopped coming? There has not been any official sanction of Australian travel but there has been plenty of bad press around Australia’s response to the trade war and Australia’s push back against the CCP sharp power in Australia, not to mention Hong Kong, so that will be playing a role.

There has also been substantial capital account tightening in China, specifically targeting the export of capital for property purchases which will deter tourists to Australia. More recently that has also been extended to students as well.

Australia has also tightened the permanent migrant intake and potential Chinese migrants are facing tougher scrutiny by security agencies.

We also wonder if Australia’s relentless debauching of pedagogical standards is playing a role as international students realise an Australian degree is one step short of toilet paper.

None of these about to better and probably all will get worse.

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. Chinese students are now beginning to understand that a degree from an Australian university is unfortunately worthless. They are also beginning to realise that these Australian universities tricked them into thinking that it is worthwhile to study in Australia, when in reality, it was simply the universitys’ engaged in programs to enrol as many international students as possible because that is their revenue source and goldmine. Sad for all parties, really.

      • It’s wishful thinking. There will be more international students in the future, not less.

        Whether more or less of them look Chinese doesn’t actually matter 1 jot.

        • It matters a bit, as some nationalities pay more (using offshore funds) and others go for cheaper courses (and pay by working here).

        • IKR, imagine thinking this has literally anything to do with the education and not the passports for the whole family + access to the Great Southern Laundromat.

      • I agree with your scepticism but there’s no doubt this scam will eat itself eventually and there’ll be hordes of unemployed from the fake education sector.

    • Indians are starting to realise this too – but the poor ones keep coming over to work for $10 per hour – regardless of how worthless the “degree” is.

      • reusachtigeMEMBER

        10 bucks an hour for their services is a rip off. I wouldn’t pay them anymore than 8. There’s enough willing to work for that. Quality drops a bit below 8 but that’s probably ok in some industries like IT.

  2. mild colonialMEMBER

    So in short Chinese can’t get their money out to buy overseas education nor property and that and that alone is causing a plateauing of their coming here. They probably don’t sympathise with their governments trade predicament, they think how do I get round it?
    Think we’ve got to factor in, too, that a chunk of this activity is larger scale organised fellow countrymen exploitation with no doubt work crews rotating through businesses and dreams being sold to the innocent. No doubt a chunk of business here relies on imported labour. So I don’t think it’s just independent decisions by middle class families.

    • The90kwbeastMEMBER

      Interesting article but how old is the data, looks like it’s from 2010? Otherwise why have 2010 and 2015 data points when the article is written in 2017?

        • The90kwbeastMEMBER

          The difference is the data is 9 years old… It’s commenting on a demographic forecast for this decade when the decade is nearly over. We haven’t seen the drop in students in Australia anywhere near the volumes like this forecast suggests may be the case so either the forecast is wrong or Australia has above average attractiveness for Chinese students with the actual data the past 9 years, or both.

  3. with a bill to eliminate per-country caps for green cards in US about to pass soon our degrees/permanent residency are loosing appeal among wealthier and more aspirational Chinese
    in US they are also less likely to experience negative racial discrimination – Asians, especially educated ones are seen more favourably than in Australia

      • we have a problem of being very expensive to come – one needs 10k to get here, having 10k in some of these countries means you are not desperate

    • “in US they are also ……less likely to experience …. negative racial discrimination”

      Right…..

      • John Howards Bowling Coach

        I was also about to call BS on that. Aside the fact the USA is gunning for China, there is essentially very little racism to Chinese here in Australia. My better half, born in Mainland China, has commented to me that I experience a lot more racism as a foreigner when we’re in China than she does here in Australia. Racism globally is extremely common, it’s only in PC countries like Australia where anyone listens to complaints about it. Try complaining about Racism in Africa (even and especially between different African nations) and see if anyone cares to listen…

  4. ErmingtonPlumbing

    Clearly Chinese people resent the growing Nazi mentality here in Australia and on Macrobusiness.com.au.
    Our Country is becoming indistinguishable from The Kingdom of Württemberg, the birth place of that arch racist Albert Einstein.

    “But the famous physicist reserves his most cutting comments for Chinese people.

    According to a piece in the Guardian about the diaries, he describes Chinese children as “spiritless and obtuse”, and calls it “a pity if these Chinese supplant all other races”.

    In other entries he calls China “a peculiar herd-like nation,” and “more like automatons than people”, before claiming there is “little difference” between Chinese men and women, and questioning how the men are “incapable of defending themselves” from female “fatal attraction”.”

    WTF Albert!

    https://www.bbc.com/news/science-environment-44472277

    • reusachtigeMEMBER

      LOLOLOL. The things you discover in the comments section. Racialist joos are the worst kind!! They hate the gentiles and the godless chinamen have to be some of the worst to hate.

    • @EP
      If internet & boobtube are to be believed ein$tein was tavi$tox shill. Social engineering 101 …present hero to the world to be held in high esteem by populace for (sometimes bizarre / incomprehensible to the average punter) achievement then drag them down with smear campaign seconds, minutes, hours, days, years, decades, centuries, etc later. History and current times are littered with these ‘ characters’

    • What’s so hard to believe?

      For examples with our east Asian brethren, do you think terms like Gweilo and Gaijin are utterances that are only said in obscure places, or said openly?

      Whites are the least racist group on earth, all non-whites are more racist than whites by definition.

    • John Howards Bowling Coach

      EP, another little known things about Albert is that he was evidently a wild pants man, and bedded numerous young ladies, I think I read when visiting his home in Switzerland that he’d actually had an affair with the daughter of one of his girlfriends. Although I am not surprised, given the tendency for older academics to try to bed their students.

  5. John Howards Bowling Coach

    This stuff seems like noise to me. Until it actually becomes reality (because the sheer weight of numbers on the International Student game, from China, at the moment, is still overwhelmingly HUGE). There are more than you could poke a stick at!