'A large slice of independent schools' income from Chinese students is at risk'
Independent schools face a challenge as geo-politics threatens the flow of overseas students from China, writes Andrew Lewer, MP
Firstly I’d like to lay my motivations on the table. I was led to found and chair the All Party Parliamentary Group for Independent Education through my appreciation and respect for the independent education sector. I support increased state/independent school partnerships, and believe that the sector can benefit wider society even more than it does already with greater government support. These could come in the form of co-sponsored bursaries, some modern version of assisted places or even a Dutch or Australian style voucher scheme, for example. It is not the most fashionable cause in Westminster, but I believe in it. It is, therefore, very much as an ally that I make some possibly uncomfortable observations.
The value of international fees
The large number of international students in UK independent schools and colleges is a source of pride to most people in the sector. They have given an extra educational dimension for domestic students learning and living alongside their international classmates. They have provided an important – and for some schools – a critical source of additional revenue. This has also benefitted the UK economy, both in overall revenue terms and particularly for the local areas where successful independent schools are based. Whether a large international contingent in UK schools has also contributed to fee inflation is a separate discussion, but the significance of international fee income is indisputable.
The question is, how probable is continued fee income from the Chinese market? I would suggest that a very large slice of this revenue is now at risk and it is highly likely to diminish even further in the future. This reasoning is due to two converging factors: at the exact time coronavirus struck, with the huge challenges it has brought to the independent education sector and the incomes of its customers, the not entirely unrelated issue of relations with China has come to the fore. It cannot be ignored. As a sector, we need to talk about China.
Let’s get real
I try to be wary of Godwin’s Law in my article-writing and speech-giving. The "law" has numerous versions, the relevant one in this case is: "whoever mentions the Nazis has automatically lost whatever argument was in progress." But it is very difficult to avoid when you have a state with around 1,000,000 people in concentration camps, actively sterilising thousands of women for being the "wrong" race and religion and is trading the organs and hair products of prisoners.
Vocal and high-level abhorrence at the activities of the Chinese state is no longer a fringe position – the foreign secretary himself said on the BBC on 19th July that forced sterilisation and wider persecution of the Uighur Muslims by the Chinese government were "reminiscent of something not seen for a long time". Even if many in the West were slow to appreciate the true and worsening nature of the Chinese Communist regime under President Xi Jinping, and the movement from authoritarian to totalitarian, it is beyond question that this realisation is now mainstream. It is cross-party at a time when political consensus in the UK has been especially hard to come by. And it’s not just a change in rhetorical tone but is leading to hard outcomes, of which Huawei/5G and the immigration status of British National Overseas passport holders in Hong Kong are just the start.
There is no point in soft-soaping this change in attitude. It extends now to British people looking at labels to see if a product is made in China and putting it back on the shelf if it is, reminiscent of the way my parents used to refuse to buy anything from South Africa in the apartheid era. This is a very strong feeling in political circles, and it is getting stronger in the wider population too.
Unless China stops the activities which give rise to this reaction, I very much doubt these views will lessen now they have reached this pitch – take your pick in terms of the provocations from the Uighurs, Hong Kong, Tibet, the Indian border, suppression of information around coronavirus, cyber warfare, the South China Sea, Taiwan and general totalitarianism.
It is true that in the global economy it is impossible to suddenly pretend that China does not exist, or even to avoid its products altogether (although discovering that the product is made by slaves does assist the process); but that should not blind us to what is going on, either from a humanitarian point of view or from a business perspective.
Impacting UK education
It would be a big mistake for the independent education sector to consider that all of this, and geo-politics more generally, does not affect them. It would also be misguided to believe that as long as plenty of reassurance is offered by schools about social distancing, quarantine arrangements and other anti-coronavirus measures then Chinese students will not only return (they may do so short-term), but that new students from China will continue to choose a UK education in the same sorts of numbers in the future.
I would suggest that there is a strong chance they will not and, therefore, schools need to look to other markets as a matter of urgency. This is painful in the extreme for the sector as Chinese students are the largest cohort of overseas boarders in the country (over 25% when combining China and Hong Kong markets), but the drop in numbers from that part of the world in the years ahead is moving from possible to probable.
New markets near and far
Markets to focus on include other Asian countries, Europe (where any Brexit angst will soon fade; I was an MEP, it will!) and West Africa. This last category is especially promising. Nigeria has the largest population in Africa and an expanding middle class; and Ghana has one of the fastest growing economies in the world. Both have a history and culture of enthusiasm for UK independent education, and indeed enthusiasm for it in the round – not just as an exam factory.
The sector must look to the domestic market too. Many parents have felt disappointed by the provision made in some sections of the state education sector and are therefore looking for alternatives. Parents of students already in independent education may feel that the disruption of coronavirus makes boarding more attractive, especially for older students. I personally think it may boom at sixth form level, while doing so less, and even declining, the further you go down the age range. This increase in older age boarding (particularly weekly, possibly flexi too) may well outlast the pandemic, but fee levels will be key.
Certainly for the medium-term, partly also as a result of coronavirus, it is likely that the enthusiasm for having your children closer to home, or at least in the same country, will be a continuing trend and highlights another reason why UK students must always be the bedrock. In addition, political support is more likely to be forthcoming (at least from those not implacably opposed for ideological reasons to private education) if UK students remain the principal focus.
Longer-term it is likely that developing and growing economies will focus on improving and enhancing their own educational provision, both independent and state, day and boarding, because what can assist economic growth more than good education? Whilst there will always be a market from overseas parents for the most well-known school brands, it cannot be guaranteed for the majority of the sector.
China knows best
There is another reason, strongly related to the growing international tensions outlined above, which I believe will contribute to a decline in Chinese boarders in the UK. It’s the growing nationalism in China, very much fuelled by the cult of personality around President Xi. This is a nationalism that proclaims China to be the best in all fields – including education. We may well see a change in their enthusiasm for sending students abroad to reap the benefits of an overseas education (which in Chinese Communist Party terms is the technical rather than the cultural), to a suspicion of parents not educating their children in China, at least at pre-18 level.
Growing international tension between China and many countries around the world will have far-reaching impacts on the UK independent schools sector. This will not only be in terms of student numbers and fee income as outlined here.
What about Hong Kong?
If it seems likely that mainland Chinese students are less likely to be in the UK in such large numbers, what about those from Hong Kong? In terms of education, mainland China and Hong Kong may look very different from each other in the future, but in all other respects the distinction between the two is now massively reduced. The new Hong Kong Security Law turns Hong Kong into almost as much of a police state as the rest of China.
Residents of Hong Kong are used to freedom and liberty in a way that those of mainland China are not, even in the pre-President Xi period. It is, therefore, reasonable to assume that parents will want their children to continue to enjoy the kind of education which provides these elements. Up until now, for the most part, it has been available in Hong Kong but going forward it will be severely curtailed. (If anyone has any doubts about this, you only need look at the schoolchildren who have been arrested and badly treated by the police in Hong Kong for protesting, or learn of the books that are now banned from libraries in Hong Kong schools, by order of the state.)
As a result, it is possible there will be an increase in Hong Kong students arriving at UK boarding schools. Whether this will continue, or even permitted longer-term if their parents remain in China, is yet to be seen. At a press conference on 30th July the Chinese ambassador to the UK announced that China will not recognise BNO passports as a legal travel document which is a relevant and concerning development.
Indeed, we may see more Hong Kong children in UK independent day and boarding schools if their parents choose to relocate here. This could be a consequence of the new paths to British citizenship that have been opened up as a UK reaction to the Security Law (or to other countries that will be similarly welcoming to the exodus of talent that may result). It is a trend that has yet to emerge, but it is worth looking out for.
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