Chinese students are studying abroad in droves. In this series, I discuss some forces behind this trend. I will also publish transcripts of interviews I conducted with two entrepreneurs serving this ever-expanding group.
The trend of Chinese students going abroad seems unlikely to slow in the near future. The International Herald Tribune cites Global Times research data showing that “the number of [Chinese] students wanting to study abroad has increased by more than 20 percent each year since 2008”. In addition to ample job opportunities for returning graduates, the reverence for foreign degrees makes the payoff for returnees substantial.
This flood of students means there are plenty of opportunities for entrepreneurs to provide value, and profit while doing so. I recently interviewed two serial entrepreneurs targeting Chinese students studying abroad — this series will include transcripts of those interviews.
Foreign degrees are preferred in China
When discussing studying abroad with hiring managers and returnees in China, I have been surprised to discover that a degree from any foreign university is considered more prestigious than one from even a top Chinese university. The creativity, problem solving, and teamwork that are an important part of many university programs in the US and other western countries, along with the understanding of foreign markets gained while living abroad, carry a lot of weight with Chinese companies.
With foreign companies operating in China discovering they need to localize, and Chinese companies increasingly expanding abroad, the demand for returnees is going through the roof. I have heard from other foreigners working in China that they are finding it increasingly difficult to compete with returnees who can speak the language, have a deep understanding of the culture, and often don’t demand expat packages.
Chinese high school students and their parents have to choose between studying abroad, or spending every waking moment studying for the Gao Kao — the dreaded Chinese college entrance examination — to try for one of the coveted spots at China’s top universities. Because foreign degrees are considered by so many to be better than domestic ones, Chinese students are likely to continue choosing to study abroad.
Chinese education is only cheap on paper
Although you may think education in China is relatively affordable, and it’s true that it is quite cheap on paper, the New York Times recently reported there are a number of hidden costs associated with education in China. While one aspect is overt bribery, there are a number of other methods discussed in the Times article that I have heard of in China.
These extra costs certainly aren’t new. When my wife’s cousin was in elementary school in Beijing over a decade ago, the teacher told all of the students that “Olympic Math” would be on their tests but wouldn’t be taught during normal class hours. Rather, it would be taught in a special class session the teacher was holding outside of normal school hours. If the students wanted to attend, they had to pay the teacher extra. While I still don’t know what “Olympic Math” is, I have heard similar stories frequently enough to know extra sessions like these are quite common.
These hidden costs, which are likely to continue increasing for the foreseeable future, are providing an extra nudge to Chinese parents who already feel like sending their kids abroad to study would give them an edge over their peers. Even though this can often mean borrowing from family or taking out loans, the tradeoff is well worth it.
Abundant opportunities in a competitive market
These are only a few of the reasons driving the sustained flow of Chinese studying abroad. Although seemingly long-term trends can change course quickly in China, this one seems like it’s a safe bet.
The two serial entrepreneurs I recently spoke with are addressing these students’ needs in innovative ways. Greg Nance, CEO of Chase Future, offers services like mentoring and essay proofreading for Chinese students aspiring to attend top schools in the US or UK. Danny Wang, cofounder of Weblish Pal, created a platform to connect Chinese students interested in studying abroad in North America with English teachers so they can improve their spoken English in advance of their move.
The following posts in this series will give you some insights into what drives these entrepreneurs, how they are addressing these market opportunities, and some of the unique challenges they face in China.
I look forward to reading your thoughts on my interviews with these entrepreneurs (you can read the interview with Greg Nance here and the interview with Danny Wang here), and also look forward to following up with them in the future. Sign up for email updates below so you don’t miss upcoming posts that include transcripts of these interviews!
- New York Times: A Chinese Eduction, for a price
- New York Times: Taking More Seats on Campus, Foreigners Also Pay the Freight
- CNN: Chinese flock to elite U.S. schools
- International Herald Tribune: Putting Chinese Students to the Test