Viewing cable 05WELLINGTON569
Title: WITH LOSS OF CHINESE STUDENTS, NEW ZEALAND'S

IdentifierCreatedReleasedClassificationOrigin
05WELLINGTON5692005-07-25 05:07:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Wellington
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000569 
 
SIPDIS 
 
STATE FOR EAP/ANP, EAP/CM, EAP/PD, ECA, ECA/A/E/EAP 
COMMERCE FOR 4530/ITA/MAC/AP/OSAO/ABENAISSA 
 
E.O. 12958: DECL: 07/21/2015 
TAGS: ECON PREL NZ CH
SUBJECT: WITH LOSS OF CHINESE STUDENTS, NEW ZEALAND'S 
EDUCATION INDUSTRY SUFFERS DECLINE 
 
REF: 03 WELLINGTON 1295 
 
Classified by Charge d'affaires David R. Burnett.  Reason: 
1.4 (b) and (d). 
 
¶1. (U) Summary: A sharp drop in the number of 
English-language students from China -- partly orchestrated 
by the Chinese government -- has reduced overall foreign 
student enrollments in New Zealand schools.  To revive the 
international education industry, the New Zealand government 
is refocusing on promotion of its universities to foreign 
students.  End summary. 
 
¶2. (U) There were 102,136 fee-paying students in New Zealand 
in 2003-04, down 15 percent from the previous year.  But that 
drop in headcount barely nudged the revenue that New Zealand 
collects from the tuition paid by international students, the 
nation's fourth-largest source of foreign exchange after 
agriculture, tourism and wood products.  The international 
education industry generated NZ $2.19 billion (US $1.5 
billion) in revenue in 2003-04, about a 1 percent decrease 
from the previous year.  That was the first decrease since 
1998, when both revenue and enrollment numbers dipped amid 
the Asian financial crisis. 
 
¶3. (U) Over the last year, the fall in enrollment and income 
was largely due to fewer foreign students enrolling in 
English-language courses and secondary schools.  By contrast, 
enrollments were up for foreign students attending university 
and post-graduate programs, which charge higher fees.  The 
government changed the law in 1989 to allow full fee-paying 
foreign students. 
 
Fewer Chinese students 
---------------------- 
¶4. (U) China is the source of 32 percent of foreign students 
in New Zealand.  Although that is the largest group of 
foreign students here, the number of Chinese students in New 
Zealand has declined in each of the last two years.  From 
2002-03 to 2003-04, the overall number of Chinese students 
fell from 37,150 to 32,877, or 11.5 percent.  In terms of 
those who came to New Zealand to study English, the decline 
was 32.7 percent. 
 
¶5. (U) That decrease is the result of stiffer competition 
from other countries for Chinese students and a stronger New 
Zealand dollar, which reduced New Zealand's attractiveness as 
an educational destination.  It also resulted from negative 
media stories in China on the collapse of two private 
English-language schools in New Zealand that enrolled 
substantial numbers of Chinese students and on Chinese 
students' involvement in prostitution, gambling, drug abuse 
and gang activity in the country (reftel). 
 
¶6. (C) The decrease also reflects an effort by the Chinese 
government to reduce the number of Chinese who study 
overseas.  The government's primary aim has been to prevent a 
drain in foreign exchange.  The Chinese Embassy's education 
consul in Wellington also has been working actively to reduce 
the numbers of Chinese students in New Zealand, according to 
Robert Stevens (protect), chief executive of Education New 
Zealand.  The consul -- who has openly admitted he does not 
like living in New Zealand -- has sent messages back to 
Beijing portraying the country as inhospitable to Chinese 
students, its teachers as incompetent and its people as 
racist, Stevens said.  Education New Zealand is a private 
industry association that promotes the country as a study 
destination. 
 
¶7. (C) While unhappy over the growing numbers of its citizens 
studying in New Zealand, the Chinese government also has 
accused the New Zealand government of failing to maintain 
high educational standards and adequate pastoral care of 
international students, Stevens said.  He added that Chinese 
officials' displeasure with New Zealand especially hardened 
after the collapse of the two English-language schools. 
Chinese Ministry of Education officials insisted that the New 
Zealand government compensate the schools' Chinese students 
for their financial losses. 
 
¶8. (C) New Zealand officials feel they have bent over 
backward to satisfy the Chinese, and Stevens believes that 
New Zealand is rebuilding the relationship.  The New Zealand 
government pressured other private language schools to accept 
the Chinese students abandoned by the two failed institutions 
and paid their accommodation costs and some tuition fees. 
Minister of Education Mallard makes frequent visits to 
Beijing.  The education consul in Wellington is expected to 
finish his assignment soon. 
¶9. (C) Meanwhile, a growing number of English-language 
schools are springing up in China, against which New Zealand 
cannot compete on cost.  While Stevens expects the number of 
Chinese students to increase again in New Zealand, he does 
not expect them to reach their peak level of 2001-02.  More 
English-language schools are expected to close in New Zealand. 
 
¶10. (C) In the China-New Zealand negotiations over a 
free-trade agreement, which began in December 2004, Education 
New Zealand has asked the New Zealand government to pursue 
provisions that would allow free and open trade in education 
services.  In particular, Education New Zealand has urged the 
government to obtain commitments by China to the General 
Agreement on Trade in Services that would match New 
Zealand's.  While New Zealand negotiators expressed optimism 
over achieving an overall agreement with China, they also 
warned Stevens that obtaining Chinese concessions on services 
would be extremely difficult. 
 
More university students 
------------------------ 
¶11. (U) Meanwhile, the New Zealand government last year 
decided that it must attract more foreign students to its 
university and postgraduate programs to sustain and increase 
revenue from its international education industry. 
 
¶12. (U) With that goal in mind, the government has allocated 
NZ $70 million (US $47.5 million) to be spent over five years 
beginning in 2004-05 -- more than a fivefold increase in 
government spending on international education.  The funds 
will go toward scholarships.  They also will compensate 
universities for reducing fees charged to foreign doctoral 
students and will pay the school fees charged for those 
students' school-age children.  The allocation will fund four 
overseas educational counselors to monitor education policies 
in key markets, including China, the United States, Malaysia 
and Belgium.  A counselor is in place in Beijing, and a 
counselor is now being selected for Washington. 
 
¶13. (U) The government also changed its immigration policy 
with a view to luring more foreign students.  Beginning July 
4, foreign students can work 20 hours a week in New Zealand, 
as well as six months after they complete their studies. 
 
¶14. (C) Stevens noted that Americans compose the 
fastest-growing group of foreign students at the university 
level in New Zealand.  From 2003 to 2004, the overall number 
of Americans studying in New Zealand rose 44.5 percent, to 
1,917.  Stevens said that most American university students 
stay for one or two semesters and that most come "to have 
fun."  They are attracted to New Zealand for the same reasons 
growing numbers of tourists are: its natural beauty, its 
outdoor activities and its reputation as a relatively safe 
destination. 
 
¶15. (U) The United States -- along with Australia, Canada and 
the United Kingdom -- also serves as a growing competitor to 
New Zealand for foreign university and postgraduate students. 
 
¶16. (C) Comment: While the New Zealand government has 
scrambled to appease Beijing's complaints, Chinese student 
enrollments continue to fall.  The New Zealand government's 
efforts appear not to have paid off, partly because of market 
forces beyond its control.  It is unclear whether the 
government has taken this lesson into account in its 
negotiations with China on a free-trade agreement. 
Burnett