This video is sponsored by Skillshare. Use the link in the description to watch my
course or thousands of others with a free two-month trial. In 2018, the U.S. imported $540 billion worth
of goods from China, but exported only 120. In response, President Trump imposed tariffs,
immediately shaking the Chinese, American, and, therefore, world, economies. But while the trade war defines today’s
economy, another deficit will decide tomorrow’s. In the 2017-18 school year, 363,000 Chinese
students came to study in the U.S., while only 24,000 Americans went to China. This, on the surface, isn’t all that surprising. What’s weird - really weird - is how fast
it happened. All of a sudden, starting in 2007, Chinese
students in the U.S. absolutely exploded, accounting for 93% of all international student
growth in the last decade. More students come from China to America than
the next six countries combined, including India, despite having almost the same size
population. So, why so many? Why so sudden? And is the U.S. right to worry about incoming
spies? The answer has less to do with academics and
more with economics, complex social dynamics, and, above all, politics. On June 7th, Chinese cities become… eerily
quiet. Traffic is as busy as ever but no horns are
honking, stress is collectively unusually high, free water bottles are handed out, and
drones watch overhead. Today, tomorrow, and sometimes, on a third
day, 10 million students across China take the National Higher Education Entrance Exam,
aka the Gaokao, aka, the most important nine hours of a Chinese person’s life. The test covers Chinese language and literature,
math, foreign language (usually English), and a choice of social or natural science. The top roughly 7-million scorers are admitted
to college, and a select few are offered places in the C9 - mainland China’s equivalent
to the Ivy-League. But unlike the SAT, AP, or IB, Gaokao scores
are really the only factor in Chinese college admissions. The first 18 years of your life, therefore,
are dedicated to preparation. Leading up to the big test, parents burn incense,
pray, and book hotels near the exam to avoid traffic. Students sometimes study with IV drips. Some, known as “Gaokao migrants”, travel
to other provinces with higher admissions quotas in hopes of having a slight advantage. When the day finally comes, provincial governments
order quiet streets for concentration and fly drones to catch cheaters. Supporters of the Gaokao say it levels the
playing field - creating a meritocracy wherein any student, from any geographic or socioeconomic
part of China has the same opportunity for social mobility. Critics, in turn, argue a level playing field
is only ever an illusion - that success is handed to those with families wealthy enough
to afford private tutors. Like continued middle-class growth, the national
exam is both a practical and political tool for maintaining stability - shifting questions
of who has power and who is entitled to riches onto the individual. The extreme, sometimes insurmountable stress,
they say, doesn't even produce good citizens or employees. While Chinese students rank very highly in
math and science, they’re often seen as lacking in other skills like creative and
critical thinking, a side effect of their rigid education system. Classrooms are dominated by the teacher, who
lectures behind a podium to a sea of totally-silent students expected to memorize as much as possible. To ask questions is both to disrespect your
teacher and admit to your peers that you don’t understand the material. Finally, discipline is placed above all else,
with low performers at one high school not being allowed air conditioning. For any number of these reasons, some, disenchanted
parents seek a way out. If their child performs poorly on his or her
high school entrance exam, rather than lose face, families may place them in international
schools, designed to prepare them for exams like the SAT, instead. Others pursue an education abroad with the
intent of eventually migrating the whole family, or, simply, for more opportunity. The perception is that, while school in China
is more intense up until the Gaokao, afterward, students feel they’ve satisfied their family’s
expectations and can relax at university, whereas American college is when students
start getting serious. In other words, students leave China on their
parents’ suggestion, who usually pay their tuition. And pay, do they! There are English lessons, extracurriculars
for admissions, exam fees, and travel costs. On top of that, families pay agencies about
$10,000 per child for help in the process. In other words, this is only possible thanks
to China’s rising, newly-wealthy middle-class, and the demographics which leave parents with
only one child to pay for - and, more importantly, only one chance to get it right. The truly wealthy get started even earlier
- sending their child to an elite American feeder middle school, which can charge up
to 60, $70,000 a year. And when old fashion studying doesn’t work,
upper-class families resort to “gifts” - usually about $250,000, and as much as $6.5
million. There’s one more, unexpected reason Chinese
students come to America… When Deng Xiaoping began opening up the country
in the ’80s and ‘90s, creating thousands of newly rich families, he also, for the first
time, allowed students to study overseas. For this reason, the first international students
who returned to China were its most well-off, launching high-paying, high-profile careers. This association of studying in America and
success in life has never faded. So, while the American Dream may not be alive
and well in America, it certainly is in Beijing. Americans have Louis Vuitton, McMansions,
and Porsche’s. Chinese people have Harvard and Yale. One hospital in central China even named its
maternity wards after Ivy-League schools for good luck. All of these factors help explain this, but
they don’t justify this. Why did it all happen so fast? To answer that, we need to understand how
schools really make money. Broadly speaking, in the U.S., there are two
university business models. The first way a school can make money is simple:
charging students. Private schools are the Apple of education
- they forgo massive market share in exchange for a smaller number of higher-paying students. And, because they attract high-income families,
they can expect good, lifelong customers - aka endowments! On the other hand, the way public schools
pay the bills is a little less obvious. Lower tuition is made up for by state and
federal funding - aka, everyone’s favorite, taxes! Government subsidizing is great - when it’s
great. Low prices grant low-income families access
to a great education. The problem is that state and federal governments
have other priorities and are subject to economic downturns. During the 2008 recession, Americans spent
and made less money, governments collected less revenue, and colleges received less funding. From 2008 to 13, states alone lost out on
$283 billion. Now, ten years later, most of us have long
forgotten the recession - but not universities. Still in 2018, state funding for higher education
was down 13% from before the crisis. So, as government subsidies fell, schools
immediately turned to a new subsidy - international tuition. The current model is one where colleges can
segment prices without appearing to discriminate. In other words, tuition is set very high,
but aid is handed out very generously. The average full-time undergraduate in 2017-18
received nearly $15,000 in total aid. But while something like 85% of students receive
some amount of financial aid, international students almost always pay full price. At Michigan State University, for example,
in-state freshmen pay $25,064 a year for tuition, fees, room, and board. Out-of-state residents pay just over double,
and international students pay $9,133 on top of that. Across America, an international student generates
about twice as much revenue as an in-state resident. Students also complain about a so-called “International
Tax”, where schools place a greater emphasis on English courses to prolong their studies. Increasingly, Chinese students find themselves
caught between two worlds… As more and more students return home, 30%
in 2007, but 80% today, they’re often disappointed by what they find. While English is still very valuable and many
find high-paying jobs in America, the rest, “Haigui”, as they’re known in Chinese,
have a disadvantage. One study found U.S. diploma-holders were
18% less likely to receive a call back from potential employers than Chinese ones. On the other hand, they may also feel isolated
and unwelcome in America. Because schools tend only to keep one or two
dorms open during breaks, during which international students tend to stay on campus, they get
placed in the same dorms, have less opportunity to perfect their language skills, and a harder
time socializing outside their bubble. At the same time, some Chinese students are
experiencing delayed or rejected visas and accusations of espionage. The fear stems from Confucius Institutes or
Chinese Student and Scholars Associations, groups set-up by or associated with China’s
Communist Party on American campuses. Officially, their goal is to help Chinese
students acclimate abroad - like, by organizing parties around Chinese New Year. Chinese embassies also create WeChat groups
to organize students, even paying them to welcome Xi Jinping during his 2015 visit to
Washington. Several Chinese students and faculty have
been arrested or fired in recent years for alleged spying or failing to disclose connections
to China. According to sources, President Trump seriously
considered banning all Chinese students completely, only narrowly deciding against it after an
ambassador pointed out how it would harm American schools. Students in STEM fields, in other words, most
Chinese students, are already subject to additional scrutiny. The truth is, visa issues are not yet widespread,
and the U.S. government has, at times, even encouraged Chinese arrivals, with Trump declaring
“We want to have Chinese students (go) to our great schools and great universities. They are great students and tremendous assets”. Regardless, issues are common enough to create
a perception of risk, leading to an 8% drop of international students in 2018, who increasingly
choose other countries like Canada or affordable Thailand. The University of Illinois went so far as
to take out a $424,000 insurance policy in case of a significant drop in Chinese students. The U.S. can and should be worried about Chinese
influence on campuses. Their free, open-minded approach has the potentially
dangerous side-effect of also creating a vulnerable hole easily filled by nationalist propaganda. There has never been a better time in history
to be wary of China’s influence abroad. But there has also never been a more important
moment to be cautious about conflating a government and its ideology with 1.4 billion individuals. Suspecting everyone of espionage leaves America
economically and culturally weaker, not stronger. Every year, Chinese students contribute $15
billion to the U.S. economy. Education is now Australia’s third-largest
export, more than tourism, and behind only iron and coal. But whether economically useful or not, cultural
exchanges act as a countervailing force to propaganda - both exposing Chinese nationals
to a wider intellectual world and American citizens to foreign cultures. The fact that America has so many high-ranking,
sought-after institutions - where even Xi Jinping sends his daughter - is a massive
diplomatic advantage that risks being wasted if foreigners aren’t welcome. When students return to China, these schools
often constitute their entire conception of America, the one that spreads to friends,
family, and, eventually, decision-makers. Cutting off Chinese students may help win
today’s trade war, but welcoming them is the only way to stop tomorrow’s conflicts
before they even begin. While not everyone can leave their country
and study abroad, we all have access to some of the most interesting classes online with
Skillshare! For example, maybe after watching “The Magic
of In-N-Out”, you want to start your own business - this course can help you create
an amazing logo for it. Perhaps you want to avoid a marketing disaster
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business, or investing - Skillshare has thousands of classes to teach you. You can try Skillshare today with a 2-month
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than $10 bucks a month. Thanks to Skillshare, and to you for watching!
