Chinese students have helped bankroll the US economy. Now fewer want to study here and it risks America’s position as a global leader.

America’s popularity among Chinese students has gradually declined over the last few years. It could burn financial, cultural, and diplomatic bridges for the United States.

That’s according to a recent survey of 8,610 respondents on Chinese students’ overseas studies conducted by Beijing-based private educational services provider the New Oriental Education and Technology Group. The researchers found that interest in studying in the US has declined steadily in the Middle Kingdom since 2015, while it’s increased for the United Kingdom, Hong Kong, and Singapore in that same timeframe.

That’s after a decade-plus of China being the top source for international students in the US, with numbers growing as the years passed. The influx of foreign students, most of whom are not eligible for financial aid, pay up to three times more than in-state students at public universities, effectively subsidizing costs for higher educational institutions. Economists told Insider that the number of Chinese students in graduate programs also help universities bankroll other costs.

“There are many at the master’s level that are reliant on China for the revenue,” Nikolai Roussanov, an economics professor at the University of Pennsylvania, told Insider.

Chinese students accounted for 35% of all international students studying in the US during the 2019-2020 academic year, contributing $15.9 billion in economic value, according to a report by the Institute of International Education’s Open Doors.

But a confluence of circumstances is causing Chinese nationals to expatriate to other countries for their education, whether by choice or by political intervention. One reason is anti-Chinese immigration policies enacted under former President Donald Trump and strict Chinese COVID lockdown policies. Additionally, Chinese students report feeling deterred by high levels of American gun violence, high COVID-19 death rates, and the US’ spike in anti-Asian racism, the Wall Street Journal’s Sha Hua, Karen Hao, and Melissa Korn reported this month.

In addition to threatening a crucial avenue of income for private and public universities in the US, falling interest in an American education among Chinese students puts other aspects of the American economy at risk, economists told Insider. That includes the output of multiple industries including technology and finance, in addition to the cultural and political significance of international students who remain after they graduate.

“Any news about declining international demand for US education is very sensitive and should be taken very seriously, more seriously than loss of US comparative advantage in any other area arguably,” Oleg Itskhoki, an economics professor at the University of California, Los Angeles, told Insider.

‘If the trend continues, it’s not a good thing’
The Wall Street Journal’s translation of the study shows that 51% of Chinese students surveyed wanted to study abroad in the US in 2015, a figure that gradually slumped to 30% this year. The number of students who wanted to study in the UK increased by 9% in that same timeframe, and more than doubled for Hong Kong and Singapore.

Itskhoki said that the US should be worried if it’s not the world’s top educational destination.

“One may argue that US leadership in the world is best reflected in two export services – that of finance and that of education,” he said. The US “will remain a leader in the world as long as there is strong demand for these two services, and this may persist long after the US loses leadership in terms of total GDP, manufacturing output, and international trade in goods.”

Roussanov said that there’s “not necessarily going to be a big negative effect” on the economy based on current enrollment numbers, but said that the trajectory of the survey numbers is cause for concern.

“If the trend continues, that’s not a good thing,” he said.

Roussanov pointed to the many industries that Chinese expatriates enter and make lucrative contributions to once they graduate.

“Everything tech-related, finance, the more quantitative sides of finance, everything to do with artificial intelligence. These are the big drivers of innovation at the moment,” he said.

And there’s a direct link between the waning appeal of American education as a “good” to Chinese expatriates and the political and economic health of the US, Itskhoki said.

“Export of higher education services — that is, purchases of these services by foreigners — are not only crucial as an export commodity, but also in their cultural, economic and political spillover effects,” Itskhoki said. The decline of “Chinese demand for US education services… may amplify over time the political and economic rift.”


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