Chinese culture is based on the principle of collectivism. In other words, decisions by a Chinese consumer to purchase a commodity strongly depend on the attitude of other people towards that particular commodity. Because Chinese consumers prefer to go out shopping with friends, their decisions are usually influenced by close associates. This is in line with trait theory, which states that the development of a consumer’s personality results from the interaction of many factors. According to Davis, Peyreffite and Hodges (2012, p. 71), Chinese consumers purchase commodities that satisfy both their personal and social needs.
Both Australia and China are targeting to sustain the economic growth that they have experienced during the last twenty years. The two countries have significantly reduced various forms of barriers that could impede trade relations between them. As a matter of fact, the neo-Freudian theory asserted that individuals only seek for relationships that guarantee some form of reward. In other words, the theory purported that all individuals and nations engage in relationships that facilitate their superior status in the society.
As a matter of fact, neo Freudian theory states that social relations are vital in the formation of personality traits of an individual. In other words, Chinese trust the opinion of their accomplices more than the details of a commodity which is presented in television advertisements or newspapers. In addition, Chinese prefer commodities which upgrade their social status in the society. For instance, Shen (2005, p. 429-436) noted the prestige of foreign degrees and advancement in English and foreign languages are the key factors for securing a well paying job in China.
Both China and Australia have a common social goal to expand their economic and social spheres. As a result, the find relationship with Australia is particularly important in the attainment of their national economic goals which includes the ability to sustain economic growth. According to the Neo-Freudian personality theory which purports that people generally attempt too enter into deals that would allow them to move up the social and economic ladder.
Chinese consumers have been found to be loyal to established product brands in the market. In addition, many Chinese regard foreign products as instrumental elements that enable them to possess a unique value in the country’s social setting. Today, studies show that Chinese consumers can comfortably fit in their culture and in international cultures. In other words, trait theory explains the nature of collectivism among Chinese consumers as the distinctive factor that makes them unique.
However, Australian consumers have been reported to be more sensitive to the quality and price of education. However, Australian commodities often make more independent decision with respect to education. According to Raciti (2010, p. 36), increased commercialization of Australian university education led to upgrading of education quality and made them start focusing on the international market. On the other hand, the government of Australian has attached a high value on the role of higher education in the economic development of Australia (Raciti 2010, p. 36). Although the education sector in Australia is market oriented, the education system of China is mainly controlled by the government. For instance, while the Chinese government has been increasing government allocation to education, the Australian government has formulated a policy that requires universities to be market oriented and become more competitive in providing education services. Therefore, Chinese education consumers often view Australian education system as superior to their own education system.
Having signed regional trade agreements with China and the fact that china agreed to comply with World Trade organization, it puts Australia at a good position to advance their trade agreements.
Current Trading Situation Between China and Australia
Education exports to China have risen since 2005 and are now the second largest export commodity from Australia to China (Wilson 2011, p. 6). However, China’s large population and ambitious economic targets makes it imperative that China will continue to demand international education services. For instance, of the 34000 foreign students enrolled in south Australian learning institutions in 2009, Chinese students made the largest proportion of the students (Wilson 2011, p. 6). In fact, it is reported that the average Chinese student enrolments in South Australia since 2002 has been 77% per annum. Although school fees forms the largest proportion of direct economic benefits to the Australian economy, the students also purchase various commodities. The growth in education export to China has been growing at 40% since 2005 (Wilson 2011, p. 4)
However, Australia is facing competition from countries such as us, Canada and the United Kingdom in the provision of education services to China. As a matter of fact, some studies now indicate that Chinese students prefer U.S. based universities for their studies. Chinese students especially prefer to take short business courses.
For instance, it is reported that the number of Chinese students studying in America rose by 23% to 157,558 students during the 2010/2011 academic year. Furthermore, Australian authorities are concerned that although they have been training a large number of engineering and science students, quite a small number of Chinese students come to study humanities and social sciences. Consequently, Australia fears that it might not be able to effectively influence the political mindset of Chinese scholars if such trend continues (Mackerras 1996, p. 136.).
Generally, the education standards in Chinese institutions of higher learning are quite low. According to Farrell and Grant (2005), the Chinese education system is too skewed towards learning of theory with few practical and team work skills. As a result, most of the graduates from Chinese institutions of higher learning often exhibit sub standard features in the job market. Moreover, multinational companies producing commodities for the fast growing Chinese population are in need of suitable trained graduates to work in their growing capacity. Unemployment rate for Chinese university graduates is generally low – almost zero, which encourages Chinese parents to be willing to pay for expensive but high quality foreign education services.
Nonetheless, higher education is an integral and critical element in China’s long term strategy of nation building through science and technology (Yang and Welch 2012, p. 1).
Therefore, for China to effectively compete in the global service industry, it must continue importing quality education from counties such as the United States and Australia or do an overhaul of the country’s education sector. Until recently, China did not have courses for teaching English language (Farell and Grant 2005, p. 78). However, English remains to be an important language for the development of the service sector. Although China currently enjoys a high population of low cost unskilled labor which has flooded the country’s manufacturing sector and propelled China to the world’s leadership in the manufacturing sector, the country needs to have quality graduates that will enable China to optimally compete in the service sectors (Farell and Grant 2005, p. 78). China’s growth will be fostered by expanding access to all levels of education, reducing impediments to labor mobility, and expanding the private sector (Heckman and Yi 2012, p. 1). As a matter of fact, today’s employers have increased expectations for graduates to have integrative and adaptive thinking skills, and take an active role in their careers (Lim et al 2012, p. 1).
According to Lee and Bray (2007, p. 792), education has become more market oriented, As a result, consumers of education facilities consider costs against quality when deciding on the foreign institutions to attend. On the other hand, the number of Chinese students moving to study abroad through government sponsorship has tremendously reduced. In other words, the idea of using foreign education to realize cultural exchange between countries has significantly reduced (Li and Bray 2007, p. 792).
Although Chinese students’ choice of foreign institution of higher learning is greatly influenced by relatives, friends and close accomplices, the Chinese government ranking and perception of the country in question greatly influences the choice of Chinese students. In addition, Chinese students take into account expenses associated with learning in such countries. For instance, the cost of travel, fees charged by the university and the general cost of living in such countries.
Moreover, because China is a relatively peaceful country, Chinese students prefer institutions located in countries where crime rate is low, and the threat of terrorism is not high. In addition, the cultural attitude of the country is important. For instance, Chinese prefer Australian universities because of the low level of racial discrimination and has favorable climatic conditions.
In addition, the geographical proximity is considered as an important factor which determines the choice of countries to study. Furthermore, social links have been found to play a big role in influencing the choice of university. However, the immigration policies of the host country also influence the choice of Chinese students. For instance, most Chinese students take advantage of their learning engagements abroad to seek for Permanent citizenship in countries such as Australia.
The number of Chinese students studying in Australia has been tremendously increasing over the years. In fact, Young (2007, p. 2) estimated that the number of international students (majority Chinese) will increase to about 7.2 million in 2025 if the current trend of education exporting services is maintained. Moreover, the expansion and the growth of Chinese economy has increased household incomes and boosted the ability of many families to afford the cost of foreign education. In addition, going to study abroad has become a social trend in China. As a result, studying in a foreign country is being viewed as a unique social achievement that enables an individual to access foreign cultures, learn English and gain a competitive advantage in the global job market. Pham (2011, p. 6) noted that many student who decide to study in Australia are partly motivated by the long term prospects of permanent residence in Australia.
Chinese universities are not adequate to absorb all the large number of Chinese students who are in high schools. The available public universities in China can only cater for 8% of the country’s students in need of higher education. As a result, the admission grades and other entry standards have been raised to regulate the number of students who are able to join such local universities. For instance, students are required to pass the national college entrance examination which is often very competitive. Consequently, the government of China has formulated foreign policies that favor foreign education.
Students also wanted to experience independence, experience life challenges and managing their lives in a foreign country and have an expansive perspective of perceiving issues.
The Australian government should formulate policies that would ensure that it remains the country of choice for Chinese students. For instance, it initiates programs that facilitate Chinese culture so as to attract more students. For instance organizing for events such as Chinese cultural week and having Chinese foods in the education institutions would be a motivating factor. In addition, it could formulate policies that favor permanent stay of foreign students in Australia. For instance, Wang (2012, p. 70) reported that Australian universities have started teaching Chinese as a language for interested beginner students.
In addition, Australian universities must ensure that education standards are not compromised and remain competitive. Moreover, security initiatives that reduce the rate of crime and the threat of terrorism should be formulated. In addition, the government and education institutions must put in place measures that discourage racial discrimination.
The cost of education must also remain at a competitive level. For instance, the government may decide to subsidize costs such as rent and electricity to foreign students in order to have a competitive edge ahead of their competitors and remain the country of choice.
The government should ensure that favorable economic and political relationship between Australia and China is maintained in order to maintain the trust and co-operation between the two countries.
In addition, the government should promote part time jobs for foreign students in Australia. Moreover, the Australian authorities should formulate favorable policies such as quick processing of travel visas. Moreover, academic credentials obtained from Australian universities are highly recognized in China and globally and recommendations by education agents in China.
The high population and economic growth mean that China will continue to outsource its higher education requirements. Currently, Australia is the leading exporter of higher education to China. Good political and economic relationship between Australia and china has significantly encouraged such a trend. In addition, relatively low cost of education in Australia as compared to countries such as U.S and Germany has attracted Chinese. In addition, low level of racial discrimination, high security and low threats of terrorism.
However, in order to remain competitive and attract more students from China, Australia must ensure that it maintains the current policies that attract foreign students. Mackerra (1996, p. 130) noted that Australian institution should identify their respective competitive strength and allocate their resources in a cooperative and sensible fashion. Such policies should aim at protecting the reputation of the universities (Wendi and Diane 2010, p. 1)
In addition, the Australian government should put in place other programs such as organizing for Chinese cultural week, promoting Chinese foods and subsidizing education related costs of living such as rent for foreign. In addition, Mackerras (1996, p. 130) noted that Australian education providers should promote vocational education and training where employers could pay the fees necessary to make such plans viable. In addition, Zilwa (2010, p. 168) suggested that should focus on improving the quality of academic units in order to increase the position of such universities in the world ranking – as a way of attracting more international students.