Chinese recession would hit UK universities

The current financial climate in China could have a major impact on higher education across the UK, according to City University London’s vice-chancellor, Malcolm Gillies.

Professor Gillies made his comments at a Higher Education Policy Institute seminar in London, in which he stressed the possible effects of a drop in Chinese students on all UK universities.

“Students might commit for one year but not three," he explained, warning that the loss of students taking the full three-year degrees could prove financially disastrous for universities.

"At City, 40 per cent of students are international and the number of overseas undergraduates has dropped, but one-year international student numbers are up, with students asking to pay their fees upfront while the pound is weak.”

Gillies believes that a financial “sense of fear” might lead to students being more likely to commit only to a single year master's, rather than to a full undergraduate degree.

It is a potential shortfall which has not gone unnoticed by government. In its refreshed China Plan 2008, the Scottish government explained its intention of trying to "increase the flow" of Chinese students, citing their contribution to the economy, in terms of both “the immediate spend of students” and “the expenditure of friends and family that visit them,” as substantial.

John Adams, professor of economics and director of the China-EU research centre at Napier University, believes that the economic environment in the Far East will most likely result in a fall of students coming to the UK.

“They could take advantage of the weak pound. But you can only take advantage of the weak pound if you have the money. If you are worried you might be out of a job, then the weak pound becomes irrelevant. What that might mean is more family resources going to a one year MSc. Of course, that can only be for students who already have a degree. So the number available to do this will also eventually decrease.”

UK universities will be concerned with such predictions, as students coming from outside the EU form a valuable form of income, some paying in up to £10,000 in tuition fees every year.

“Non-EU students, effectively fill the funding gap. This is the difference between the money they claim they need to operate the university and the money the government gives them. China has been such a big UK market, if the numbers go down in any significant way the funding gap could potentially not be closed,” said Professor Adams.

According to Professor Adams, this could result in fewer courses and more redundancies. In addition university budget plans, which often look two or three years ahead, could be thrown into chaos: “I think that the outlook over the next two years is quite pessimistic, I’m sorry to say.”

However, Han Li, president of the Edinburgh University Chinese Student Association (EUCSA), believes that the possibility of a recession will not result in less Chinese families sending their children abroad.

“Education is very important for Chinese parents, I don’t think that money is the deciding factor as such; they are willing to spend a lot to send their children abroad and start saving for it early on.”

According to the Higher Education Statistics Agency (HESA) there has already been a decline in the still growing number of non-EU students coming to Scotland. Statistics show that there was a two per cent increase in non-EU students coming to Scotland in the 2007/2008 academic year – fifteen percent less than the previous year.