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The latest announcements on the international schools market from ISC Research


English-medium schools in China now leading the world
English-medium schools in China now leading the world

Published 18th December 2017 - At an opening presentation at the International Schools China Conference in Shanghai on 22nd November 2017 , ISC Research Schools Director, Richard Gaskell shared new data and intelligence on the fast-developing English-medium international schools market in China.

In his presentation, Richard announced that China now leads the world for the number of English-medium international schools with 806 such schools. This growth, he explained, has been fuelled by the demand from Chinese nationals for a more Western style of learning, with qualifications and language skills that prepare children well for higher education in the West.

For Chinese nationals, the vast majority who, due to government restrictions, do not have access to the traditional expatriate international schools (known in China as the Schools for the Children of Foreign Workers), an alternative option is emerging; the International Chinese Private School sector. It is these schools, accessible to all Chinese families who can afford them, that are driving the growth of English-medium international education in China today.

International Chinese-owned Private Schools are required to abide by regulations set out by the government regarding curricula and subject learning, particularly during the years of compulsory education. Nevertheless, these schools can provide an opportunity for learning in the language of English from a very young age (and do so, often from as young as 3 years old). And, for students aged 15 and over, they are also allowed to offer international curricula and examinations. Most schools select those curricula and exams that are recognised by all of the leading universities in the world; qualifications such as A levels, Advanced Placement and the International Baccalaureate Diploma.

These schools are also embracing a more Western-style of pedagogy to acclimatise students to learning approaches that prepare them well for higher education and careers overseas. This combination of qualifications, academic rigour, and learning approach, while maintaining distinct Chinese influence, is attracting many Chinese nationals with big aspirations for their children.

In his speech, Richard shared ISC Research data showing that over the past five years, the growth of International Chinese Private Schools has been extensive and the demand for places even more significant. However, to date, international schools remain a very small fraction of the private education market in China.

In 2016, the total annual spending on private education in China was estimated to be close to USD $120 billion (CNY 800 billion Yuan). In comparison, ISC Research estimates the annual tuition fee income generated by all English-medium international schools in China to be USD $4.3 billion (CNY28 billion); less than 4% of China's total spending on private education.

In addition to this, the number of Chinese children aged between 3 and 18 studying overseas has risen rapidly since the turn of the century, most of who are at independent schools, mostly boarding, in Great Britain or the United States.

It is the desire of Chinese parents for a Western higher education experience for their children that is fuelling this growth of Western-style K12 education, both in and out of country. And, according to ISC Research, the demand is expected to rise significantly. "Most parents in the middle and upper strata of Chinese society want their children to get the best education that they can afford", said Richard. "ISC Research surveys have shown that education is the last category of expenditure that parents cut when they suffer economic hardship. In other words, spending on education in Asia is very resilient. Conversely, education is the most likely category of expenditure to be increased when parents' incomes grow. Today, most Chinese parents have two options for their children; to remain at or near home attending an International Chinese Private School if one is accessible, or to send them overseas to an international boarding school."

ISC Research data shows how an increasing number of reputable independent school brands from Britain, the United States and Australia are providing effective solutions in both cases.

The National Association of Independent Schools in America (NAIS); a membership body of over 1,800 schools, recorded that the number of Chinese students enrolling in NAIS schools increased from 348 students in 2005 to 14,579 in 2015.

An increasing number of independent schools are also taking their school brand directly to market and opening sister schools in China. A small number of these are schools for expatriate children (SCFW category schools), but increasingly, they are aligned to Chinese investors in order to offer a Western independent school learning approach to Chinese nationals. Their reputation as pathways to some of the very top universities in North America and Britain, such as Harvard, Yale, Oxford and Cambridge, ensures that demand for places continues to exceed supply, even in those schools with the very highest of fees.

The growth in education expenditure in China is happening during a phase of increased prosperity in the country. At the top end of the spectrum, the number of USD-millionaires in China has grown rapidly. In 2015 there were 1.3 million and by 2017 this had increased to 1.6 million. In addition, household incomes throughout most cities in China have been increasing between 6% and 7% each year since 2010, and that trend seems likely to continue.

"That's far from all," said Richard during his presentation. "As China's two-child policy takes effect (the number of babies born in China in 2016 was 17.86 million; 7.9% higher than in 2015), the demand for private kindergartens in the country, including bilingual international pre-schools, is expected to explode within the next year or so."

New regulations issued this year suggest that the Chinese Government is embracing private education for the first time; enabling more opportunities in which foreign investment of private international education can occur. As a result, the potential for development of International Chinese Private Schools looks likely to expand.

More detailed intelligence and analysis about international school investment and development opportunities in China will be featured in the new China Market Report which ISC Research will be publishing on 5th January 2018.

The report contains latest private education legislation including new regulations issued in 2017; available foreign investment business models including service fees, royalties, and variable interest entities; demographic and socio-economic data and analysis including population breakdown at city level; GDP breakdown, household and disposable income by province; cost of living and disposable income by city; and future hotspots for international education throughout China. The report is prepared for investors, developers and schools considering new school development in China. More details are available from Arlo Kipfer or Nalini Cook

A Supplying the Market Report for China will also be available from ISC Research in the new year; written specifically for education suppliers and providers wishing to develop their business with the international schools market in China. More details about this report are available from Diane Glass

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Anne Keeling 07906-353863

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