Experts have warned that British universities expanding into China may not see the strong financial returns they once did as more students opt to complete their entire programmes at home.

A fresh wave of UK universities are set to open new joint institutes in China. Most recently, the University of Exeter and Hull University Business School received approval for expansion in the country, adding to the 11 already approved earlier this year.

After a period of relative isolation during the pandemic, China appears to be increasingly keen to foster strategic international partnerships.

¡°The demand is strong, but the terms are set by China,¡± said Julian Fisher, co-founder of Beijing-based Venture Education, pointing to the country¡¯s blueprint for becoming an ¡°education powerhouse¡±, launched earlier this year, which specifically encourages foreign STEM-focused universities to collaborate in China.

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However, he added, while the driver for Chinese universities is ¡°upskilling institutions, knowledge transfer and ensuring a consistent intake of students¡±, the motivation for UK institutions is ¡°money¡±.

Vincenzo Raimo, an international higher education consultant, agreed, ¡°For UK universities, these partnerships often provide vital income at a time when international fees cross-subsidise much of what we do at home.

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¡°For Chinese universities, the draw is prestige, access to international curricula, and deeper collaborations.¡±

Although the returns from transnational education (TNE) can be mixed, universities generally make money from articulation routes, which see students start their degrees in their home country and then transfer to the UK for one or more years. For those years abroad, they normally pay international fees.

Universities including Nottingham and Liverpool have operated joint campuses in China for decades, which continue to be a major income source for the home campuses.

But Raimo, an international higher education consultant, warned against counting on students continuing to transfer abroad: ¡°China remains a big prize in TNE, but it¡¯s not the quick financial win many universities assume it to be.¡±

With new rules requiring students to be able to complete all four years of study in China, fewer are transferring to the UK under 2+2 or 3+1 models.

Many now opt for a one-year master¡¯s degree abroad instead, he said, ¡°often at a different, higher-ranked university¡±.

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Others stressed that new regulations could also make it harder to succeed than in the past.

Lorna Ferrie, legal and compliance director at Mauve Group, a global business expansion organisation, warned that China¡¯s compliance requirements are tightening.

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¡°China¡¯s new Degree Law, which came into force this year, standardises how joint degrees are awarded and tightens quality assurance,¡± Ferrie said.

¡°For UK universities, that brings welcome clarity, but also a higher compliance bar. The message from China is clear ¨C signalling openness, but on its own terms.

¡°Partnership success depends on institutions balancing ambition with rigorous compliance planning.¡±

Ferrie added that universities must also deal with the practical challenges of operating in China, from employing staff under Chinese labour laws to handling payroll and immigration rules.

¡°Contracts need clear exit strategies, because once you are in, it can be hard to unwind without financial or legal consequences,¡± she said.

Despite the hurdles, experts agree that the opportunities in China are still enormous given the size of the population and sustained prestige of international education. ?

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¡°The appetite is still strong,¡± Raimo said. ¡°Joint programmes and institutes are thriving, and for families these partnerships meet a growing demand: a UK degree at a fraction of the cost, without the safety concerns some parents now associate with overseas study.¡±

tash.mosheim@timeshighereducation.com