The Chinese mainland is a huge potential market for exporting Hong Kong's education services. In 2004, 7.23 million candidates registered for the entrance examination under the mainland's National Colleges and Universities Enrolment System (NCUES), rising 18% from 2003. However, only 62% (or 4.5 million) of these candidates, or 19% of the population aged 18-22, were successful in securing a place for study in either undergraduate or diploma programmes in the nation's higher education institutions.

The annual outflow of Chinese mainland students to overseas countries/regions (i.e. inbound mode) for higher education study was estimated to be about 45,000 in 2002 (about 2,500 mainland students came to Hong Kong for higher education during 2003/04). The enrolments of mainland students in overseas undergraduate and postgraduate programmes on the mainland provided by overseas education service providers (i.e. outbound mode) were, respectively, about 3,000 and 7,000 as at June 2004 (of the 164 programmes accredited by the mainland's Ministry of Education (MOE), 22 were offered by Hong Kong's education service providers).

The aspiration to study higher education is very high on the mainland. According to questionnaire surveys conducted by the Hong Kong Trade Development Council (HKTDC), 40%, 30% and 23% of the 3,223 senior secondary students of the Chinese mainland partaking in the survey exercises, respectively, wish to attain educational levels of Bachelor's, Master's and Doctoral degrees, with 3% of the respondents wishing to attain diploma only.¹

Besides, the intention to study overseas higher education is strong. 14% of questionnaire respondents would proceed to study at a university abroad after graduation from senior secondary education; 12% would contemplate studying abroad if not admitted to their preferred mainland university, with 6% considering overseas study if not admitted to any bachelor degree programme on the mainland. Accordingly, a total of 1.25 million candidates are projected to have the intention to study higher education abroad (i.e. inbound mode) based on these survey results.

Meanwhile, 60% of questionnaire respondents have the intention to receive overseas higher education at home (i.e. outbound mode). Accordingly, it is projected that a total of 1.7 million candidates have the intention to receive higher education provided by overseas institutions on the mainland.

The main reasons for mainland senior secondary students to consider going abroad for higher education (inbound) include: better personal career development when returning to the mainland (26% of total respondents); wider and broader personal vision (21%); exposure to different cultures (21%); and improvement of English standards (7%). Main reasons for receiving overseas higher education on the mainland (outbound) include: economical (38%); language barrier (23%); studying while staying in the workforce (16%); and no need for going abroad (12%).

Mainland students' preferred areas of overseas higher education study, for both inbound and outbound modes, are as follows: economics and management (31%), information technology (14%), science and mathematics (10%), fine arts (10%), English language (9%), humanities (9%), engineering and social science (7%), and social science (5%).

The common channels for mainland students to access higher education information are as follows: Internet (63% of respondents), TV (54%), newspapers (41%), classmates (22%), brochures and pamphlets (19%), relatives and friends overseas (16%), teachers (16%), education exhibition (13%), and radio (13%).

Interviews and focus groups with mainland students' parents, teachers and principals unveil that they generally have a good perception of Hong Kong's higher education, noting that Hong Kong's higher education is liberal and student-oriented, interfaced with the world, with good quality, facility and management.

They believe that studying higher education in Hong Kong (inbound) has many desirable features: international interface and exchange; academic excellence; English language environment; meeting needs of the mainland's labour market; qualification recognition in Hong Kong; and enough care/support. Factors conducive to offering Hong Kong higher education on the mainland (outbound) include: programmes with approval from the MOE; catering for the needs of the local labour market; presence of Hong Kong academic staff; and identical provision in terms of requirements, standards, and qualification on the home turf.

In assessing the potential of exporting higher education services to the Chinese mainland, the strengths of Hong Kong's education sector consist of three important elements: (i) an international component (i.e. good worldwide academic rankings, Western educational administration and international vision/interface), (ii) Chinese culture and (iii) the Hong Kong factor (i.e. proximity to the student population on the mainland, the Pearl River Delta in particular; the framework of "One Country, Two Systems", etc.). Yet, weaknesses of exporting Hong Kong higher education to the mainland lie in the following areas: low awareness of Hong Kong education services on the mainland; low proportion of non-local students in University Grants Committee (UGC)-funded programmes as well as in self-financing programmes; congested living environment and higher living costs in Hong Kong.

Hong Kong's higher education sector should take advantage of the opportunities arising from the mainland's rising demand for higher education; low outflow rate of mainland students to study abroad; strict US student visa policy since the "9/11" event; and the capacity of Hong Kong's higher education sector in absorbing new intakes from the mainland. Admittedly, the threats to Hong Kong's higher education sector in exporting services to the mainland arise mostly from the keen competition from countries like Australia, the UK, France, Japan and Singapore, most of which have concerted efforts from government, educational bodies and higher education institutions in promoting education exports.

Suggested Changes to Facilitate Education Exports to the Mainland

Above all, the critical success factors for exporting Hong Kong higher education to the Chinese mainland include: international interface and exchange; academic excellence; quality assurance; Western management and good education visions; educational exports identical to home provision; and close involvement of Hong Kong academics.

For Hong Kong Education Services Providers

The priority of exporting Hong Kong higher education services to the Chinese mainland, in terms of readiness for export, should be as follows: undergraduate (inbound only), taught postgraduate (inbound/outbound), and sub-degree (inbound/outbound) programmes.

For market entry, inbound mode providers are advised to join the mainland's NCUES, and disseminate information via this system, the Internet as well as printed matters (including brochures). Outbound mode providers are advised to partner with prestigious mainland universities, though programme collaboration is preferred to institution collaboration.

For the regional markets of the mainland, high export potential for Hong Kong higher education exists in all of the following: Beijing and Northeast China, Shanghai and Yangtze River Delta, Xian and Central China, and Shenzhen, Guangzhou, Dongguan and the Pearl River Delta.

• For undergraduate programmes (inbound only), export potential is high in cities that are more open and internationally connected, such as Beijing, Shanghai and Shenzhen.
  
  
• For taught postgraduate programmes (inbound/outbound), potential is high in cities of both high economic performance and high educational attainment, such as Beijing, Shanghai and Shenzhen.
  
  
• For sub-degree programmes (inbound/outbound), potential is high in cities with a high proportion of population with senior secondary education completed but with low higher education opportunity, such as Xian, Shenzhen, Guangzhou, and Dongguan.

Inbound-mode-related promotion activities in the mainland market may include joining NCUES to let mainland students select the programme/institution through the System (as well as providing information via the System); providing face-to-face briefing and education exhibitions; brochures, Internet websites, newspapers and TV; seeking the services of MOE-accredited overseas education agents; and Hong Kong campus tours. For outbound mode promotion, main recommendations consist of: participating in education exhibitions held on the Chinese mainland, and face-to-face communication with the presence of Hong Kong academics and mainland alumni.

For Changes in Government Policy and Institutional Arrangements

To enhance the export prospects of Hong Kong higher education services, it is suggested that the quota on enrolment of non-local students in UGC-funded undergraduate or taught postgraduate programmes be raised from currently 10% (4% as UGC-funded, and 6% as privately funded) to 20% (4% as UGC-funded and 16% as privately funded) of annual total intakes in Hong Kong over the longer term.

Similarly, there should be no quota on enrolment of non-local students in Hong Kong's self-financed taught postgraduate and sub-degree programmes. Parallel to these quota liberalisations, a centrally administered system of quality assurance and qualifications recognition should be established for self-financed taught postgraduate and sub-degree programmes.

To facilitate the above liberalisation measures, a relaxation in the government's student visa policy is recommended so as to include all non-local students admitted to UGC-funded undergraduate or taught postgraduate programmes within the recommended quota (20%), and to include all those non-local admitted to self-financed taught postgraduate or sub-degree programmes (without quota), provided that the programmes are up to quality assurance requirements. Accordingly, student visa application procedures should be further simplified and visas should be granted with flexible length of stay and multiple entry.

Furthermore, changes in institutional arrangements across Hong Kong and the Chinese mainland are recommended so as to facilitate the exports of Hong Kong higher education services to the mainland. In minimising and removing barriers concerned, the following institutional changes can be considered: providing a CEPA-like arrangement for those Hong Kong higher education institutions which have capacity, ambition and commitment to run schools on the mainland, with Hong Kong education institutions treated in the same manner as mainland universities; and simplifying procedures for Hong Kong institutions to disseminate education information to and conduct interview/admission tests of mainland students.

As an aside, the recommended annual tuition fee for each non-local student admitted to UGC-funded undergraduate programmes should be at least HK$80,000 per annum based on interviews and focus groups conducted; for other non-UGC-funded programmes such as self-financed taught postgraduate and sub-degree programmes, it should be left to the discretion of individual institutions.

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