Demand for high quality education is increasing rapidly across the globe.

According to OECD statistics, the number of students travelling for education was 1.3 million in 1990, 4.1 million in 2010, and by 2025 is expected to reach 8 million1 2. With many universities under pressure from public funding cuts, there is intense competition for higher-value international students.

On a per capita basis, Australia is the largest international education provider globally and China is its largest source country. The Australian Bureau of Statistics values exports from international education at over $20bn annually, making it Australia’s third largest export behind iron ore and coal3.

Source: ABS (Table 11a, 12b)

Why are international students heading to Australia?

Not surprisingly, the boom in higher education enrolments is being driven by demand from Asia.

Australia’s reputation for globally recognised institutions, a lower Australian dollar and reassurance about student safety make it a popular destination for international students. Furthermore, a stable and attractive student migration policy environment helps. The key attraction is a generous temporary graduate visa allowing international students to stay in the country and work for up to four years after university graduation.

Source: The Department of Education and Training (Australia) – May 2017

Favourable conditions for future export growth

In our view, both China and India have significant potential for further growth as the tertiary enrolment level in each nation continues to rise in line with expanding household incomes.

The current short-cycle tertiary enrolment level in China is just 39 per cent, well below levels in major developed nations such as the US (87 per cent), Australia (87 per cent), and New Zealand (81 per cent). Similarly, India’s tertiary enrolment ratio is just 24 per cent4.

Geopolitical factors like Brexit in the UK and Donald Trump’s migration rhetoric in the US should support these trends continuing for Australia.