The impact of a trade war between the United States and China future international student recruitment and enrollment
In my book, International Student Mobility and the New World Disorder, I make the claim that future international student mobility will be influenced by economic, political, sociological and technological changes taking place throughout the world. In this section of an updated white paper on my prior book and predictions, I am focusing on the potential impact of a trade war between the United states and China on the future enrollment of Chinese students in the United States.
In 2018 the United States initiated a series of trade wars with both allies and adversaries alike. In Bob Woodward’s book, Fear, the author outlines President Trump’s obsession with the United States’ trade imbalance with China, South Korea, Japan, Canada and Mexico and his desire to terminate past trade agreements and write new ones. The president considers tariffs bargaining chips in rewriting global trading rules and lists as one of his major economic successes the “new” NAFTA trade agreement reached in September 2018 with Canada, Mexico and the United States. Similarly, South Korea gave the president his first big trade deal by agreeing to accept more American imports. Japan is reviewing its trade deficit with the United States and is expected, like South Korea, to import more American products.
This report will focus on the trade war between the United States and China. Geopolitical differences and mutual distrust have been a cornerstone in American and Chinese relations for years. In August 2018, the president instructed his trade team to consider imposing 25 percent tariffs on $200 billion of Chinese exports. Additional tariffs were announced in September, making the total number of Chinese goods affected by the tariffs $250 billion. China’s retaliation, also announced in August, was to impose tariffs of $60 billion on American imports.
In September 2018 the president accused the Chinese government of attempting to influence the November midterm elections by identifying the American states, in the south, Midwest and northeast that would be the most negatively impacted by Chinese tariffs. Almonds from California, steel from Pennsylvania, car parts from Michigan and soybeans from Iowa are the states most likely affected by Chinese tariffs.
The president’s imposition of tariffs on a number of Chinese exports has raised the level of tension and rivalry between the two countries. Richard Haas, president of the Council on Foreign Relations, remarked on October 2, 2018 that the current state of U.S./China relations is a “new cold war.”
Since the imposition of tariffs Chinese stocks have fallen sharply. In September 2018, the stock market was down almost a quarter from its peak in January 2018. The Economist reports that since April the yuan is down 8 percent and there was a current-account deficit in the first half of 2018, China’s first such gap in two decades.
Like the United States, China is seeking other trading partners, including Russia, certain European countries, the countries in its “Belt and Road” project and the countries in the new Trans-Pacific partnership to increase trade. Zhiwu Chen, director of the Asia Global Institute at the University of Hong Kong, predicts the emergence of “different trade blocks based on geography and values.”
Global trade, like global student mobility, has been shifting eastwards and southwards for some time. Still there are more Chinese students studying on American colleges and universities campuses than from any other country. Trade tensions between China and the United States could easily spill over into future international recruitment of Chinese students. Many colleges and universities in the United states are heavily dependent on the revenue from Chinese students to meet both enrollment and financial goals. The Chinese government could impose a limit on the number of students it allows to enroll on American college campuses. This is not as farfetched as it may first appear. I was a young admission officer at Georgetown University in Washington, DC when the Iranian revolution resulted in all of the enrolled Iranian students ordered home immediately. This summer the government of Saudi Arabia recalled all of its students studying in Canada because of a statement made by a Canadian government official that was offensive to the Saudi government. I realize I am citing political events that resulted in shifting international student mobility enrollment. But I believe that economic events, like a trade war between the United States and China, could also result in fewer Chinese students studying on American college campuses. Do many American schools have a plan B should this happen?
Jack Ma, founder of Ali Baba, predicts that a trade war between the United States and China, will last two decades. A sobering prediction.
Africa: The Next International Student Recruitment Frontier
For ten years I helped to manage a university in Dakar, Senegal. One day, in the breakfast room of my hotel, I noticed that I was the only person having breakfast who was not Chinese. China has made a huge investment in Africa and other countries are doing the same. There are several reasons why I believe that Africa will be the next area of the world to support international student recruitment.
Consider the following:
Six of the world’s fastest-growing economies between 2001 and 2012 were in Africa.
Goldman Sachs recently issued a report, “Africa’s Turn,” comparing business opportunities in Africa with those of China in the early 1990s.
Google is the single biggest private sector influence in Africa. Its internet search and email services are transforming the continent. The company is also attempting to help African governments digitize information and make it freely available and is improving translation software to bring more Africans who speak only one language online.
Online Africa is developing faster than offline Africa. According to the May 12th issue of “The Economist,” undersea cables reaching Africa on the Atlantic and Indian Ocean coasts, plus innovative mobile phone providers, have raised internet speeds and slashed prices. This connectivity is making Africa faster and more transparent in almost everything it does.
China will implement the African Talents Program to train 30,000 personnel, offer 18,000 government scholarships and build cultural and vocational training facilities. China will also continue to implement the China-Africa Joint Research and Exchange Plan to sponsor 100 programs for research, exchange and cooperation between colleges and universities and research scholars.
On July 17, 2012, Australia launched an expanded Australia-Africa Universities Network, a consortium of 17 Australian universities and research institutes and 30 African institutions.
Colleges and universities around the world should consider developing African recruitment strategies and begin to consider building strategic academic and research alliances. To ignore the potential of African student, faculty and administrator exchange programs is to limit a school’s ability to become a player in the next international “hotspot.”
China’s “soft power” initiatives
A little more than a decade ago China began imitating the United States, Britain, France and Germany by engaging in what Joseph Nye, a political scientist at the Kennedy School of Government, termed “soft power,” or a collection of methods used to extend a country’s influence on the world stage.
One example of Chinese “soft power” was the creation of hundreds of Confucius Institutes worldwide. The objectives of Confucius Institutes are as old as the imperial era itself when the policies and geopolitical interests of the Middle Kingdom mirrored the stated objectives of China’s “One Belt One Road” initiative.
The first Confucius Institute opened in South Korea in 2004 and the institutes quickly spread to Japan, Australia, Canada, the United States and Europe. Today there are more than 100 Confucius Institutes at public and private universities in the United States and more than that number at American high schools. An article in “The Economist” reported that the Chinese government spends $10 billion a year to promote its image abroad.
The Chinese government has made ample use of financial incentives to encourage the acceptance of Confucius Institutes on campuses worldwide. China pays $100,000 to each college or university that agrees to sponsor a Confucius Institute on its campus, making annual payments over five-years. It is not surprising that schools with institutes enroll a significant number of full-paying Chinese students.
The Communist Party of China has made no secret that it considers Confucius Institutes a “soft” propaganda arm for the government. Chinese minister of propaganda, Liu Yunshan, in an article in “People’s Daily,” wrote: “We want to coordinate the efforts of overseas and domestic propaganda and further create a favorable international environment for us.” Creating a favorable international environment includes no mention or discussion of Tiananmen Square, Taiwan or Tibet. Information disseminated through the institutes follows strict Communist Party lines. It is no accident that the ruling body of the Office of Chinese Language International, a branch of the Ministry of Education, coordinates all institutes’ programs.
Within the past few years there has been pushback from several colleges and universities with regard to Confucius Institutes. In 2014, for example, more than 100 University of Chicago faculty members signed a petition citing information from the Confucius Institute that contradicts the university’s core academic values. The university did not renew its Confucius Institute contract. McMaster University in Canada also did not renew its contract. Other universities followed suite, including, Pennsylvania State University, Stockholm University, and the University of Lyon. But other schools in the United States continue to support their Confucius institutes including, George Washington University, Tufts University, Portland State University and the University of North Carolina at Charlotte.
Still the controversy continues. In February 2018 Florida Senator Marco Rubio asked Miami Dade College and several universities in Florida, to shut down their Confucius programs. Along with many other government officials, Senator Rubio considers the institutes a threat to America’s national security by institutionalizing Chinese propaganda on American colleges and university campuses. The director of the Federal Bureau of Investigation also raised concerns about Chinese infiltration on American college campuses and intellectual property issues.
The Chinese government, quick to recognize a problem, has promised reforms. What reforms will be implemented and when they will be implemented has not yet been determined.
Are Confucius Institutes examples of soft power becoming hard power, as enrollment of Chinese students becomes dependent on the institution hosting an institute? Are Confucius Institutes just one piece of China’s plan to be recognized as a major player on the world’s stage? Is it fair to criticize China for what many other countries have done for decades?
Each college and university already hosting a Confucius Institute or considering partnering with China to establish a Confucius Institute will have to decide how to proceed according to its culture, academic norms and international long-term strategic planning.
The term “Silk Road” was first coined in 1877 by a German geographer, Ferdinand von Richthofen, to describe a connecting series of Chinese routes. Then, as now, the objective was to promulgate Chinese culture and influence worldwide.
The “One Belt Road One Road” is China’s new “Silk Road” and its major initiative to create economic and political, cultural and education influence, linking far-flung markets and energy reserves from the Arctic to the Indian, Pacific and Atlantic oceans. China’s plan calls for Europe, Asia and Africa to be connected by railways, highways and fiber-optic cables.
Chinese maps show the belt and road of ancient times as routes that traversed Eurasia and the seas between China and Africa. Today’s Chinese leaders speak about the “One Belt One Road” initiative as encompassing the entire world. The Chinese premier, XiJinping, considers the project as “great power diplomacy with Chinese characteristics.”
In 2016 the Ministry of Education released a document outlining the investment China will make in higher education in the 49 countries along the ancient “Silk Road.”
According to a report in September, 2016, by the Observatory on Borderless Education, The Chinese Ministry of Higher Education specifies three main avenues of education cooperation: interoperability between national education systems, including policy coordination, language teaching and degree recognition; student mobility and transnational education; and scholarships and capacity building.
A university network named “New Silk Road University League” was founded in May, 2015 by Xi’ an Jiaotong University, and encompasses nearly 100 universities from 22 countries. Another consortium, the “One Belt One Road University Strategic League,” was founded in Gansu Province in October 2015 and includes 46 universities, including Fudan University and Beijing Normal University and eight universities from Russia, Ukraine, Turkey, Malaysia, and South Korea.
China has educational collaborations with colleges and universities in Malaysia, Singapore, the United Kingdom and the United States.
China has a long history of exerting its “soft power” initiatives in Africa. In addition to subsidizing infrastructure projects in several African countries, China awards a significant number of university scholarships to African students to study in China. There are more African students studying in China than anywhere else in the world.
ASEAN students represent the biggest group of foreign students studying in Chinese colleges and universities. According to the China University and College Admission System, an online information and application portal, an estimated 80,000 students from Southeast Asia opted for a Chinese education in 2016.
According to Zhang Baohui, a professor and director of the Centre for Asian Pacific Studies at Lingnan University in Hong Kong, “Exporting education is a way to promote China’s “soft power.” It reflects China’s quest for broader influence in the world.”
China now allows international students to take part-time jobs during their studies in China in an attempt to make the country’s higher educational system more attractive to students worldwide. Off-campus internships are also allowed with the approval of a student’s Chinese college or university.
After graduation from a Chinese university international students are permitted to start their own business in the Zhangjiang National Innovation Demonstration Zone for up to two years after graduation.
A cautionary note: China’s “soft power” will last only as long as its cash reserves do. China will influence, but not entirely determine, global trends in international student mobility and enrollment.
Alternative international higher education myths
At the risk of being accused of being politically correct (or incorrect), I would like to share with you some of the international higher education myths I have uncovered over the past few months.
The U.S. continues leads the world in attracting international students.
Last year, the U.S. had a 10 percent increase in international students. But Canada increased its international student population by 13 percent, and Australia and New Zealand increased the number of students studying on its campuses by 12 percent.
The demand for higher education is greatest in Europe.
The demand for higher education in South Asia is exploding. With a population of more than 600 million under the age of 18, and with the rapid pace of social and economic changes taking place in the region, South Asia is poised to take over Western Europe and the U.S. as a primary choice for enrollment. This fact may not be reflected in next year’s enrollment statistics, but this is a trend that I would watch closely for future recruitment threats and opportunities.
International hubs and branch campuses will continue to increase in the future.
International hubs may increase in the future but I predict regional hubs, rather than international hubs, will grow faster.
The Asian middle class has grown faster than any other region in the world.
The Asian middle class has increased in numbers over the past two decades but the African middle class has tripled over the past 14 years from 4.6 million households in 2000 to 15 million in 2016.
The UK continues to be the number one choice for U.S. students studying abroad.
The fastest growing market for U.S. students is Germany. The number of U.S. students studying in Germany is estimated to be 10,000. Most of the students pay no tuition.
The fastest growing Chinese market will be at the graduate and undergraduate level.
Chinese teenagers, as young as 14, are enrolling in high schools throughout the world in increasing numbers. Last year, for example, the number of Chinese high school students was nearly 50,000. This is 100 times more than in 2004.
These are but a few of the myths and facts in international higher education. More to come in the future.
International Student Mobility and the New World Disorder
It is perhaps both risky and foolish to predict future international student recruitment patterns and trends. Fast-moving political, economic, and technological worldwide developments make it impossible to predict with certainty the impact of these developments on higher education and future international recruitment and enrollment.
However, I do think it is important to recognize that world events have had, and will continue to have, an impact on future generations of international students. The destinations of future foreign students cannot be isolated from changing worldwide geopolitical and economic realities. There are messages for international enrollment managers and deans on the front pages of our newspapers today.
Few would argue that 2017 was a year of worldwide change and disruption. Players in the geopolitical chess game seem to be constantly changing, creating new alliances – political, economic and societal.
In his recent book, A World in Disarray, Richard Haass, President of the Council on Foreign Relations, quotes a former United States director of national intelligence, who wrote: “Emerging trends suggest that geopolitical competition among major powers is increasing in ways that challenge international norms.” Disruption on the world stage.
Rob Brown of the global education group Navitas, in addressing a conference in September, 2016, wrote “Disruption will happen in higher education like nothing we have seen before and first world institutions are going to suffer the hardest. The real opportunities exist in the developing world.” Disruption on the international higher education stage.
In the Price Waterhouse Coopers report, The World in 2050: Will the shift in global power continue?, the authors estimate that in just a few decades, the world will be very different from what it is today in terms of global ranking of national economies and the major drivers of economic growth. The report notes that China overtook the United States in 2014 to become the world’s largest economy on purchasing power parity and by 2028 the authors project that China will surpass the United States’ GDP in market exchange rate terms.
Countries with the fastest growing economies, populations and growing middle classes in Asia, like Indonesia, Malaysia, Thailand and Vietnam will dominate economic growth in the region. The Asian middle class is expected to increase from 600 million in 2010 to more than 3 billion by 2030 to represent 66 percent of total global middle class population.
International student mobility, by extension, will be impacted by this new economic reality. I think it is safe to predict that regional mobility will grow in importance and the major importers of student today, the United States and the United Kingdom, will continue to lose their share of internationally mobile students. While China will remain a leading exporter of students, it will increasingly become a major importer of students with a goal of enrolling 500,000 international students by 2020.
According to an Organization for Economic Cooperation and Development report, the stage is set for a new level of competition among international study destinations. National visa and immigration policies, coordinated regional and national marketing campaigns, and the availability of scholarships and employment after graduation will be some of the factors countries can leverage to increase their market share of international students.
Demographic and income growth and expansion of the middle class will set the dial for future international student mobility. As long as the middle class continues to grow across the globe, demand for postsecondary education will continue to outpace supply.
The impact of populism on international student mobility cannot be underestimated and has already been realized in the United States and in Britain. Enrollment statistics for the fall, 2017 term for both countries revealed changes and in certain cohorts, declines in the number of international students.
In contrast, the governments of Malaysia, Indonesia, Thailand, Taiwan, Vietnam and Singapore have made education a priority and have invested heavily in the sector. The result has been the creation of a political and economic “infrastructure” in those countries that supports higher education enrollments and academic and research collaborations.
There will probably be no greater impact on worldwide higher education than the integration of technology into education delivery methods. The internet has rendered geography irrelevant and digital options, especially in India and in some African countries, are changing the way higher education is consumed in those countries. The numbers are staggering and change daily, but according to the report, Digital Learning Compass: Distance Education Enrollment Report 2017, 30 percent of students worldwide are enrolled in at least one online course.
The jury is still out on the potential and sustainability of online education. But the major MOOC providers, Udacity, Coursera, edX in the United States, FutrureLearn in Britain and Iversity in Germany, among others, believe that MOOCs have the potential to educate millions of students, democratize higher education and build global communities.
I believe that the greatest promises of online learning and MOOCs, as well as the greatest threats, have yet to materialize.
The intersection of disruption with unpredictability demands a new way of thinking and planning. Successful international student recruitment and enrollment in the future will require international deans and recruiters who are both curious and courageous and engage in what Amit Mrig, the President of Academic Impressions, calls “horizon thinking.”
No one has a crystal ball. No one knows for certain how international higher education will evolve over the next year and in future years. The only thing we know for sure is that change will be our constant companion and political, economic and technological trends have, and will continue to have, an impact on where students enroll and why they select one country over another.
Seth Odell, a higher education writer, wrote: “The safe creative seldom achieves the momentum” Successfully embracing and managing change will be the currency of successful schools in the future.
The world is changing. And there are some segments of international higher education plans that are not changing fast enough to meet the headwinds of change.
We can either succumb to change or manage it. The choice is ours.