China-South Korea Trade In Higher Educational Services And Its Impact On Economic Growth

Since the establishment of diplomatic ties between China and South Korea in 1992, the relations between the two countries have realized great-leap-forward development. Until now, China has become the largest export market, the largest source of import and the largest investment destination of South Korea. Meanwhile, educational exchange has been more frequently. In 1992, the number of South Korean students studying in China was 232, while in 2013 the number reached 63,488, making China the most attractive destination for studying aboard. Studying aboard has trained professional personnel for South Korea, deepened mutual understanding, which promoted trade and economic exchange. In turn, the development of China- South Korea economic and trade ties stimulated demand for overseas educated talents. Especially, the subscription of China- South Korea FTA will certainly make China- South Korea economic and trade enter a new stage of development and international education will be faced with new opportunities and challenges. Therefore, studies of this subject have a direct practical significance.Since the financial crisis of 2008, goods trade has become sluggish and services trade has become more important, of which international education visibly increased. According to the UN statistics, in 2006, before the crisis, student studying aboard around the world was 250,000. In 2010, it soared to 450,000. However, in 2008 during the crisis, the total educational service output touched 41.2 billion US dollars. At present, researches on service trade(such as financial services) are deepening, but studies on educational service trade are rare, let alone on China-South Korea educational service trade and relations between foreign student educations with economic development. The author has served as a Chinese teacher in South Korea for years before he came to China for study. It is proved that the research in this area will strengthen educational exchanges and cooperation between the two countries, further help to realize comprehensively mutual benefit and win-win cooperation in politics and economy, and promote the peace and stability in Eastern Asian. I would like to strive to study with a view of South Korea.Education is closely related with the countries’ traditional culture, ideologies and the way of value judgement while educational service trade is a business and trade activity. Studies on educational service trade should refer to and rely on related economic theory. Advantage theory clarifies that using superior educational sources from other countries can save domestic investment and improve educational level and efficiency. Internal growth and human resources theory states that educational investment and a qualified team are indispensable internal factors for economic development. Economic growth model, rose by Solow, is a reference to analyzing educational service and economic development. These ideas served as theoretical basis and are elaborated in Ch.2Before studying educational service trade, we should first make it clear about service and service trade, and their essence and traits. So come straight to the point, Chapter 3 gives an explanation on them. With the globalization of world economy, educational service trade is becoming internationalization, which demands a more open market and free trade. World Trade Organization(WTO) raised General Agreements on Trade and Service(GATS) in response to these demands. GATS, applied to educational service trade on the basis of commercial competence, refer to labor import and export in education domain with commercial qualities. Educational services offered by government(such as compulsory education in primary and middle schools, official training, etc.) are free from commercial competence and profits, so they are not included in GATS. GATS define four supply type of educational service trade:(1) Cross-Border Supply. such as international distance education on the internet.(2) Consumption Abroad. It mainly refers to studying aboard.(3) Commercial Presence. It points to set schools aboard.(4) Presence of Natural Persons. Teachers, professors and scholars engaged in educational activities across borders. Among these 4 types, the second one has the largest market share and is our study target. Yet Cross-Border Supply has the largest development potential that should be paid great attention to. GATS has also raised 7 principles for its members’ promise on opening educational service market, including the restriction national treatment, the-most-favored-nation principle, the restriction of monopoly, the limitation of government subsidies, permission without differences, etc. Under these principles, members could make commitment on admission. At present, more than 40 members have made promises, mainly to open higher educational service market, namely,the overseas college educational services. It is what the article explores. In the following part introduces the commitment on admission and situations of the 4 supply methods in developed countries(the U.S And the Australia). and a developing country(India). Australia and America are worth learning for their early-established modern education system, rich educational sources, and obvious competitive advantages. India, though not superior to China and South Korea in higher education, uses superior educational sources from British and America well. Through open promise, India speeds to cultivate professionals and stimulate economy, succeeding in developing information software industry and constructing technical talent team. So it is worth of learning.On the basis of former 3 chapters, the 4th chapter carries out the research on China and South Korea foreign student education, which focuses on the development and problems of South Korean students studying in China. Now South Korean students takes 1/5, the most proportion of foreign students in China, leaving the following America and Japan far behind, which indicates its fast growing speed and scale. Chinese education had won a good review among South Koreans. Great progress was made along with problems. By taking questionnaire investigation(seen in the appendix), the writer summarizes several specific problems. Limited by time and conditions, the investigation still needs perfecting. Generally there are 2 main problems. First, economic problems. Compared with South Korea, foreign students have fewer chances to get scholarship, yet the price level rose compared to where it was in 90 s. Worse, foreign students have few chances to take part-time jobs. South Korean students spend mostly at their own expense. These factors contribute to the financial burden of South Korean families. Second, communication problems. Chinese colleges have offered information and chances for foreign student to get exposed with society. Efforts were made but problems remain. Many South Korean students prefer to work in South Korean or other foreign enterprises after graduation. Lack of information and communication prevents them from knowing and blending into China, and then affects their work opportunity.After analyzing the specific problems existing in foreign student education, the 5th chapter explains the effect of higher education service trade on economic development. According to physical truth and statistics, the writer first states the structure type of import and export, discipline level, area and country distribution and growth trend between China and South Korea higher educational service, and further analyzes their impacts on economic growth. Results show that, in macroscopic view and in microscopic view, opening educational service trade to the outside world will benefit economic growth. During the economic crisis in 2008, South Korean GDP stagnated, yet China-South Korea trade maintained and increased. Educational service trade between the two countries even skyrocketed. South Korea’s total expenses studying in China rose from 2.8billion RMB in 2008 to 3.3bn and 3.2billonn RMB respectively in 2012 and 2013. China’s spending in South Korea rise from 2.9billonn RMB in 2007 to 5.5billonn and 5.1billonn RMB respectively in 2010 and 2011. Though not much, the number goes up rapidly. Moreover, it is just the direct spending, without considering the linked effects. The educational service trade between the two countries contributed a lot even in the world economic crisis. In addition, the 5th chapter takes the case of educational city in Jeju-do, South Korea to illustrate the college economic investment benefit educational service trade brings and introduces the measuring model.The 5th chapter has demonstrated education service trade’s influence on economic growth, but economic changes will also impact education service trade. Along with the economic growth, overseas talent demand will also increase. The 6 chapter analyzes through the demand function, demonstrating the impact of income(GDP), exchange rate, import and export, national policies(such as education funds, scholarship) and University attraction(such as university level, reputation, R&D) on the scale of foreign students. The author screens a series of data index from the statistical data of the South Korean Ministry of science and technology, customs, the import and export bank and the Chinese Ministry of education, sets relationship between independent variables and dependent variable, constructs multiple linear regression model, and tests. The results show that students scale is in the proportion with GDP, exchange rate, trade and educational funds proportion in GDP, supporting the former hypothesis on variable relationship.The conclusion part briefly summarizes points and results in the article: the development of educational service trade is in pace with the currency of economic globalization and educational service internationalization. Under the GATS(WTO) norms and concerning the domestic reality, open educational service market will benefit economic growth. This has been proved in practice. Meanwhile, it proves the principles and rules of advantage theory, endogenous growth and human resources theory, which provides scientific evidence for the open policy on educational service. As for profits, educational service trade generally takes small part in foreign trade. We should not only focus on its direct economic benefits, but also the linked effects. Especially in politics and culture, educational service trade plays a positive role in reducing estrangement, deepening understandings, promoting mutual respect and belief. The China-South Korea relation has proved it. Among the 4 GATS types on educational service trade, foreign students’ consumption abroad has the largest market share and is our mainly study target. Yet c-ross-border supply has the largest development potential that the Chinese and South Korea government should pay great attention and support. The subscription of China-Korea FTA recently will certainly make China – South Korea economic and trade ties enter a new stage of development. Education service trade accounts for only a small part, but will also be faced with new opportunities and challenges. There is a great potential of development in the two countries education service trade both in breadth and depth. It is an opportunity, which governments of the two countries and the education sector should seize and make full use of. In the process of expanding the opening commitments and deepening cooperation, however, sensitive issues about long distance network education, sole proprietorship or joint venture education and other political and law problems may occur. It is a challenge which both governments and academic circles should pay attention and carry on early research.