1. Sector Overview
The education sector in China continued to grow rapidly in 2008. With education officially cited as a national priority, China intends to achieve its objectives to improve the nation's S & T competence and build a better educated and qualified work force to meet the needs of a fast growing economy.
The Ministry of Finance announced that the government spent 156 billion RMB on education in 2008, a 45% increase over the previous year. Over one third of the budget was used to provide free compulsory education (Grades 1-9) to all students nationwide. Affected by severe natural disasters and the global financial crisis in 2008, China's growth is anticipated to slow down but remains currently projected at between 7-9% in 2009.
Canadian institutions have the proven capability to provide China with a wide range of high quality education programs, expertise in curriculum development and teaching, as well as vocational and executive training to meet China's growing demand in education.
Chinese universities and colleges still lack capacity to accommodate the nation's need for higher education. In 2008, around 10.5 million students wrote the all important national university entrance exam (gao kao), while only 6 million were able to be admitted into colleges and universities.
For graduate studies, the situation is similar. Although the Ministry of Education [MoE] planned to increase the enrolment of graduate students by 5% and PhD students by 1.7% in 2009, raising the total enrolment capacity to 390 000 spaces, admission is still hard to earn for two million prospective students.
As a result of enhanced collaboration among the federal government, provincial ministries and Canadian institutions, Canada's profile was raised in 2008 through a series of promotional activities in the local market, including speaking engagements at key academic institutions, involvement at annual education expositions managed by Chinese governmental and non-governmental agencies and associations, and three education-related events held at the BC Canada Pavilion which offered the opportunity for professional development, promotion, and networking with local contacts for Canadian institutions. Canada's role as the Country of Honour at the China Education Expo in October 2008 used the Education au/in Canada brand for the first time at a recruitment event, and saw a contingent of 66 institutions and private companies exhibiting, the largest delegation of its kind ever.
Over 50 new-to-market clients were served by the Trade Commissioner Service in China in 2008.Canada's involvement in the market continues to expand in terms of new partnerships, student recruitment numbers, vocational and executive training, curriculum development and trade fair participation.
With the recent development and promotion of Canada's national Education au/in Canada brand, the image of Canada as a top country of destination for studying abroad has been enhanced to key Chinese education consumer groups. Additionally, the opening of four new Visa Application Centers in key cities has made the application process more accessible and efficient. These Centers are operated by on a contractual basis by a service provider selected by Citizenship and Immigration Canada,
Value of Imports & Exports:
The overall contribution of international students is conservatively estimated at 5 billion dollars annually to the Canadian economy, based on a combination of tuition fees and services obtained in Canada. China has now bypassed previous top source country Korea to become the number one country of origin for new students toCanada.
The Canadian Embassy in Beijing, responsible for study permit issuance in Greater China, issued over 13 500 study permits in 2008, a 46% increase over 2007. Estimated at an average annual spending of $25 000 Canadian per student, this translates into a direct contribution of roughly $337.5 million. Despite the financial crisis, the cultural emphasis on education, lack of local spaces and the desire of families to provide opportunities for their only child will like result in continued growth for this market in 2009.
The Chinese central government and provincial governments are the major investors in education. Billions of dollars are invested in key education sectors, according to China's long-term plan. The government's "985" and "211" projects affirm [through funding] China's commitment to increase the number of Chinese world-class universities and raise its research capacities to a higher standard.
Private investment is encouraged in non-core education sectors such as language training, student summer camps, and pre-school education. Private post-secondary institutions are on the rise and are closely monitored by the Ministry of Education (MOE). These are undergoing rapid development in China to meet the huge demand for higher education which public universities cannot currently meet. However, the quality of private institutions varies, and its market share still can not be compared with developed countries.
Main local Companies
The bulk of education services in China are delivered by government schools, which enjoy a position that private schools do not. By the end of 2007, 260 million Chinese students were enrolled in 600, 000 schools, among which 2286 were post secondary institutions. Teachers and faculties represent a workforce of 14 million. The national education enrolment rate is 66% for high school and 23% for higher education.
Main Foreign Companies
Foreign investment in the education domain generally is made in private areas that are less regulated and restricted. For example, foreign companies are primarily active in the ESL and test preparation market, such as English First, Wall Street English, IELTS and TOEFL Global. Test success is often the goal of study, as opposed to fluency. English textbooks and teaching materials providers also have presence in China, such as Cambridge ESOL and Lingo Media, a Canadian company.
Foreign companies are also active in the short-term executive/professional training market, either with well-reputed existing programs or programs tailored specifically to clients' needs. This also includes training for Chinese government departments: the Harmony Foundation, for example, and UBC's Sauder School have been very active in this regard.
2. Market and Sector Challenges (Strengths and Weaknesses)
The Ministry of Education [MoE] and the Embassy of Canada, Beijing have a cordial working relationship, although the lack of a Canadian Federal Education Ministry [read: interlocutor] is often lamented by the Embassy's Chinese government contacts. Now working on its Twenty Year Plan, the MoE is standing firm on the regulation of core education sectors, such as compulsory education and degree-granting joint programs. Foreign Direct Investment [FDI] is forbidden or strictly controlled in those sectors. Non-core activities such as language training and learning technologies are of less concern. Until the Twenty Year Plan has been finalized, it is unlikely that there will be any approvals or changes to partnership and cooperation agreements [i.e. X+Y schools]. While Canada is viewed positively overall, the Ministry remains concerned that some partnerships – on both sides -- are focussed less on academics and more on financial gain.
Public post secondary institutions and school districts are viewed favourably by the Chinese; private institutions are challenged to convince Chinese parents of their quality. Degrees received in foreign private universities and colleges still cannot obtain accreditation from the Chinese MoE.
Despite China's commitment under the WTO to gradually open more areas for foreign investment, education is still a restricted Foreign Direct Investment industry. Foreign investment is prohibited in any type of Chinese compulsory education (Grade 1-9) and special education, i.e. military, police, religious, political, or Communist party school. As a result, Canadian public primary, secondary and post-secondary institutions are not allowed to establish Wholly Owned Foreign Owned Enterprises [WOFEs] inChina.
According to the "Guidance of Foreign Investment Industries", foreign investment is encouraged only in the form of joint venture programs between foreign and Chinese post secondary institutions. Joint ventures at the senior high school level is somehow restricted, which means it may well take months or years to get approval from central or local education authorities.
The "Regulations of the People's Republic of China on Chinese-Foreign Cooperation in Running Schools" set by Ministry of Education is the main policy that governs establishing joint venture schools or programs. However, the criteria and the required time for processing the application lack transparency, leaving this a grey zone.
An additional area lacking clarity for foreign academic institutions is the question of establishing a representative office in China. While this has not been expressly forbidden by authorities, institutions interested in going this route to access the market more directly would be advised to see our document "Establishing an Education Presence in China" on the Edu-Canada PRO website, which goes into this matter in more detail.
China's unprecedented exposure to the world via the 2008 Summer Olympics and the improvement in quality of Chinese post-secondary education has resulted in its increased ability to attract international students. Thanks to vigorous promotion efforts,Chinanow stands as a competitor receiving country, currently hosting over 190,000 international students from 178 countries. There are also 203 Confucius Institutes, aimed at promoting Chinese language and culture, established in 63 countries and regions. Canada's Confucius Institutes are attached to academic institutions in Vancouver, Coquitlam, Edmonton, Hamilton, Waterloo, Montreal and Sherbrooke.
However, China still faces many challenges in education: disparity in the development across different regions, an inability to accommodate more students for post secondary education, a largely test-driven teaching model, a need for upgrades of education infrastructures, and teacher development in rural areas, among others. Addressing China's needs and helping China to cope with those problems could possibly bring opportunities to Canadian institutions.
Major international competitors in the local market include the US,UK, and Australia. Other countries like France and Germany,Spain and the Ukraine are also catching up. Due to the distinct cultural and geographic differences, a foreign country's popularity varies. In a survey at the recent China Education Expo,Canada was viewed as the third most popular country of destination after the US and the UK in Beijing; and as the fifth after the US, the UK, Australia and Germany in Shanghai. Perceptions of Canada remain high, despite the strong competition and small budget expenditures relative to our competitor countries.
Opportunities for Canadian Institutions
An increasing number of long-term opportunities exist in the second- and third-tier Chinese cities. Among 2286 post-secondary institutions in China, the total run by the central government is only 5%; local governments are in charge of the remaining 95%. Selecting the right geographic regions and understanding market needs can therefore be critical to an institution's strategic development.
Opportunities for Canadian institutions include the traditional ones, such as student recruitment, ESL and English teacher training, vocational training, lease of Canadian curriculum and joint academic programs. Some new opportunities are also emerging, such as pre-school education, e-learning and distance learning technologies, short-term summer camps and English immersion programs.
3. Sub-Sector Identification
The study abroad market in China is well-established, with a steadily growing demand. According to the MOE, 144,000 Chinese nationals went abroad for study in 2007, among which 8,853 were government-funded, 6,957 were company- sponsored and 129,000 were self-sponsored.
With more and more students returning to China after their study overseas, the job market for the foreign diploma holders is also becoming more competitive. Students and parents are more rational in managing their expectation for the outcome of study abroad. For the best value of their money invested, options for upgrade and transition for future personal development will be a big bonus when students select a program. Also, the safety and economic stability of the destination country are becoming important factors when students and family choose to study abroad.
The education promotion and recruitment "business" in China revolves around several fairs organized by quasi-governmental "NGOs" and local government international education commissions. These tours are held in the fall, spring, and summer, and generally visit Beijing, Shanghai, Guangzhou, Chongqing, and other second- and third-tier cities, which vary from year to year. While the fairs alone are not necessarily the best avenue for recruitment, schools do find that a good program around fair participation including school visits and meetings with key contacts can allow them to maximize their return on their involvement, both in terms of financial and HR commitments. A PhD fair organized by the China Education Association for International Exchange, a key Education NGO with affiliations to the Ministry of Education and the organizers of the annual China Education Expo, the first of its kind, was in December 2009 and offered an interesting opportunity for graduate schools seeking to recruit talent at the higher levels.
The timing of recruitment activities for Canadian institutions is critical to success. Recruitment activities should be focussed on targeting students in Grades 10 and 11, which may serve to "catch" the students before they have made plans for their future study and allow their families to begin documenting their funds [critical to the success of their visa application], as students in their last year of high school will likely have their plans in place and will be busy preparing for their university examinations.
Education agents play a dominant role in this sector and the competition is fierce. Relationship building with the local agents and regular exposure in the local market are critical in an institution's recruitment effort.
Canadian universities and vocational colleges have well established ties withChina. They are actively involved in student recruitment; joint programs, teacher training, curriculum licensing and college upgrade programs. Likewise, many Chinese colleges are active in partnering and welcome international cooperation as they search for innovative curriculums, teacher training and the upgrade of optional programs which add to their institution's competitiveness.
The development of vocational education has stepped up quickly as a result of MOE's huge financial and policy support. China planned to spend more than 14 billion RMB on vocational education between 2006 and 2010, with the ultimate goal of producing some 36 million skilled workers to cater the needs of the job market and the industries.
Canadian institutions have been strong to date in collaborative corporate and government official training. In 2008, professional training was successfully delivered to Chinese professionals and business leaders in the transportation, tourism, banking and media industries. However, the market growth for the training of Chinese government officials and SOE senior executives is still limited by the control of the central government.
With the emergence of the middle class and the desire of families to provide the best possible education for their only child, the number of Chinese students attending high schools inCanadacontinues to grow. These students increase the internationalization of Canadian schools and also provide Canada with qualified candidates for university enrollment and, down the road, immigration.
There are currently close to 30 high schools in China that offer certified Canadian provincial high school curricula (including in Hong Kong and Macao). The number is expected to grow as provincial governments such as British Columbia, New Brunswick and Manitoba examine new applications for curriculum schools in China.
Canadian offshore schools provide jobs to certified Canadian teachers and are excellent source of prospective students for Canadian universities and colleges.
Collaboration at PSE Level
Sino-Canada Programs (X + Y) are cooperative arrangements between a Chinese and Canadian university or college. The student will study toward their degree in the Chinese school, followed by a study period in a Canadian school. The most common type of program is the 2+2 program (2 years in China+ 2 years in Canada) at the university level. For programs at the college level, more years of study generally take place in China than in Canada. These programs must be approved by the national MOE. The approval process can be cumbersome and, some feel, lacks transparency.
Another model is the Inter-University Exchange model. This type of program is structured with a Canadian curriculum component, but there is no requirement for a mutual agreement on courses and credits. The student would earn a Chinese diploma or degree; the issuance of the Canadian degree is up to the Canadian institution to decide, although it should be noted that programs which do not issue a Canadian diploma or degree are less attractive. The tuition is paid to the Chinese insitution, rendering it more affordable to the Chinese student. Finally, no MoE approval is required for this type of program; however, the Memorandum of Understanding [MOU] between the Chinese institution and the Canadian partner must be filed with the MoE.
Students enrolled in this program must be formally enrolled in the Chinese school subsequent to having passed the national university entrance exam (gao kao) and must already be enrolled at the Chinese institution involved in the partnership.
Canadian institutions have been actively involved in both forms of collaboration.
ESL and Student Summer Camps
With reports that 300 million Chinese people are learning English for academic, career and other purposes, the market size is forecast as 4.2 billion dollars by 2010. Furthermore, university students inChinamust pass the mandatory College English Tests as a requirement of graduation
ESL teaching therefore presents a first-glance opportunity to Canadian institutions. The China-based ESL training market is crowded with severe competition, however, with schools such as New Oriental, Wall Street English, English First -- not to mention the British Council -- dominating the market.
Short-term English immersion programs and student summer camp programs, combined with cultural, leisure and sports activities, may provide attractive opportunities for Canadian institutions and companies.
Early childhood education and English teaching at kindergartens present emerging opportunities to Canadian educators. There are currently 129,000 kindergartens inChinawith an enrolment of 23,500,000. This market is not heavily restricted and private investment is acceptable.
The need is growing for specialty programs targeted at the children of middle class Chinese families and expatriate children. Quite often, the establishment of bilingual kindergartens is related to a real estate development, as property developers try to provide high quality facilities to the property owners.
E-learning Education Technologies
The online education market is considerable, however, government regulations and restrictions apply. Sixty-eight domestic universities have been approved to deliver degree programs online. In 2008, the Ministry of Education approved a few internationally-offered distance learning programs. Foreign institutions are restricted from offering direct accredited distance learning programs inChina.
Canadian institutions are contracted by China's Central Government, provincial governments and universities for the delivery of various specialized capacity building training programs. This is an area whereCanadadoes well and has been competitive in China. The CPC Central Committee's Organization Department, various Provincial CPC ODs, the State Foreign Experts Administration and various provincial FEAs are key players and decision makers in the approval process.
Canadian Government Contacts
Embassy of Canada in Beijing
Foreign Affairs and International Trade Canada
125 Sussex Dr.
Ottawa, ON K1A 0G2
Useful Internet Sites
Canadian Government sites
Education au/in Canada
Major Education Fairs
Government and Non-Government Agencies and Associations
- China Education Association for International Exchange
- Chinese Service Centre for Scholarly Exchange
- Chinese Ministry of Education
- State Administration of Foreign Experts Affairs
More extensive information on the Education Market can be found in the report The International Education Market in China.
 The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.
Source: The Canadian Trade Commission Service