The Shrinking Dragon? The impact of demographic changes on higher education policies in China


Among emerging economies, China is the one with the biggest population and the most perlexing demographic landscape. Fewer babies are born than in India and China seems to be the first of the BRIC countries which will reach the tipping point of demographic maturity. But what does that mean for non-Chinese and Chinese universities?


China is facing a hitherto unexpected problem: the current low birth rate makes the one-child policy seem redundant, at least in the major coastal cities. Last year’s national census showed that the average annual population growth rate was 0.57% between 2000 and 2010. The Economist noted in May that the fertility rate could be around 1.4 children per couple, much lower than the normal replacement rate of 2.1.

The core target group for Chinese universities, the 18-22 age group, is squeezed between a still overwhelming absolute number of births and an alarmingly ageing Chinese population. In the future an ever-growing portion of China’s whopping budget will be devoted to pensions and healthcare, as has happened in Europe and North America. Investment in higher education might have to take a back seat in the government’s plans, as the ruling party exchanges social mobility for stability.

Demographic changes also affect attitudes towards higher education in the longer term. A study by the Economist Intelligence Unit for the British Council in 2008 forecast that demand for higher education in China would peak in 2013 and then drop back. The diminishing share of under 25s in China will probably translate into a less robust demand for degrees, as Chinese universities will have to take fewer students every year. Places at prestigious Chinese universities would be less fought over and perhaps fewer Chinese students would be willing to study overseas or apply for a course in an expensive international branch campus based in China.

Does that mean that Chinese policy-makers will have second thoughts about China’s international HE strategy? So far the government has allowed foreign universities to partner with Chinese universities and in some cases set up campuses on Chinese soil. US and UK universities have seen this latest development as a blessing, and this is why top American universities such as Duke and NYU are planning to set up campuses in China. One reason why the Communist Party has given the green light to these operations is that it aims to curb the flow of Chinese students abroad, which is one consequence of fierce competition for places in Chinese institutions. According to the BBC, some 1.27m Chinese students attended a foreign university in 2010-11. But if competition decreases because of a demographic crisis, this policy might seem less sensible.

An ageing population is not, however, necessarily a bad thing for higher education institutions. For example, it could signify a rapid increase in demand for postgraduate degrees, which are popular among professionals over 25. The spread of state-of-the-art communications technology, particularly of broadband internet, also opens new niches for distance-learning degrees and life-long learning, both of which already flourish in China.

There is no doubt that student mobility will be affected by these trends. Given that a significant portion of Chinese students choose overseas institutions for postgraduate studies, non-Chinese universities can expect the flow of undergraduate students to diminish and the number of postgraduate students to increase in the long term. The existing segmentation in the Chinese higher education market is expected to intensify in the future, as foreign universities compete over a smaller pool. Therefore, the academic programmes they offer will have to be more targeted in order to meet demand.

Demographic maturity will bring cultural and educational changes, and possibly social and political ones, as it did in America and Europe in the 1950s, when the massification of higher education instigated a number of U-turns in public policy along with socio-economic tumult. A main difference is of course China’s size.

At the moment the Chinese higher education market, as the Indian one, is not nearly saturated. There are vast populations and high levels of illiteracy and striking internal inequalities between provinces. Access to Chinese universities is not equally provided to students from different Chinese provinces. For example, Peking University accepted 300 out of the 80,000 students from Beijing who took the National College Entrance Examination in 2009, whereas 98 students of the 985,000 from Henan who took the same exam made the cut. That might be a deficiency of the Chinese higher education system but it encourages the belief by foreign and Chinese universities that the participation rate can only increase and that the demographic downturn will not undercut their recruitment policies.

Frans Willekens, Honorary Fellow at the Netherlands Interdisciplinary Demographic Institute, recently pointed out that only a slight increase, from 10.1% to 11.5%, in the rate of entry into higher education in China and India would produce a level of skilled human capital equal to that of Europe and North America, where 40% of the population enters tertiary education.

It is worth mentioning that the global economic recession of 2008-09 was followed by a decline in fertility rates in Europe and the US, thus bringing to an end a 50-year rise in fertility rates in the developed world. It is therefore evident that China and India will remain the main source of growth in international higher education, even if China’s population shrinks and grows old as expected.

Also published in The Observatory on Borderless Higher Education