Malaysian private universities are benefitting from both students and investors from mainland China who are building a strong commercial and cultural footprint.
Malaysian private universities have been struggling for many years, especially in the post-Covid period. Part of this is due to a long-term slowdown in Malaysian students enrolling into private universities because of a combination of demographic decline in school-leavers, opening up of places at public universities and economic issues.
Low household incomes and the rising cost of living push school-leavers, especially boys, into the gig-economy where they can earn a living for the family rather than pursuing higher education where they cannot work and have to take on huge debt.
Amid this decline, demand from China is providing a lifeline. The number of Chinese students enrolled in Malaysian universities has risen over 10 years from 2,382 in 2013 accounting for only 8.3% of all foreign students to 56,198 or 41.0% of the total in 2024 according to the ministry of higher education. This was an increase of 12,155 Chinese students or almost 28% compared to 2023.
The estimated fee income from Chinese students enrolled in Malaysian universities is at least RM1.2 billion per year, the increased applications last year added around RM260 million extra.
Education Malaysia Global Services (EMGS) data shows that foreign student applications from China continued to top the list at 33,216 in 2024, compared to 26,627 in 2023. This far outstrips other countries such as Bangladesh (6,917), Indonesia (5,556), India (2,591) and Pakistan (2,417).
Investment from Chinese commercial interests has also risen. The direct investment by Xiamen University in 2016 which created their Malaysian branch campus is only one of many significant investments by Chinese companies in Malaysian higher education.
In 2020 Hope Education Group (Hong Kong) Company Limited (Hope) bought INTI Education Holdings Sdn Bhd (IEHSB) for US$140 million (RM588 million) taking over INTI International University and its five colleges (INTI International College Penang, INTI College Sabah, INTI College Nilai, INTI International College Subang and INTI International College Kuala Lumpur).
Manipal International University (MIU) in Malaysia was bought by Shenzhen International Tre (Hainan) Co in 2023 and renamed Mila University. Last year, Kuala Lumpur University of Science and Technology (KLUST), formerly called Infrastructure University Kuala Lumpur (IUKL), was sold by Protasco Bhd to Hong Kong-based Star Teenagers International Group Ltd (STI).
This investment is not one-way with public universities investing money in China too. Universiti Malaya (UM) is planning to open its first overseas branch campus in Shandong Province China this year. Universiti Putra Malaysia (UPM) China Super Satellite Centre (UPM CSSC) has a campus in Fujian, China. These allow Malaysian universities to recruit and conduct funded research with Chinese partners directly in China rather than Malaysia.
For private universities the demand from Chinese students provides a lifeline for well-positioned players but encroachment into the market by Chinese owners also threatens incumbents, especially Malaysian Chinese universities, who traditionally have provided a welcoming home to students from China.
The purely commercial interest from Chinese buyers also raises concerns about motivation. Chinese companies can access the RM1.2 billion Chinese student market and the subsidised local student market for fire-sale buyouts costing only tens of millions. They can leverage this to buy land and property for commercial, retail and residential real estate investments.
Some quarters will be concerned about the impact of foreign ownership on the culture and ethos of Malaysian universities as well as quality versus quantity in higher education in general. The use of Mandarin on campus, Chinese style teaching and learning and replacement of local managers and academics by foreigners will be troubling for many people.
Nonetheless in a world of commercial higher education, money talks and whether it is Mandarin or Bahasa Malaysia does not appear to matter. - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
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