Expat Parents in Hong Kong Feel School Squeeze

ASIA BUSINESS 
Expat Parents in Hong Kong Feel School Squeeze
By MARIKO SANCHANTA
DECEMBER 29, 2011
WSJ
Reuters


As global companies expand in Asia, financial hubs such as Hong Kong are suffering a shortage of international school places that may blunt the city's competitive edge against regional rivals including Singapore. Above, a teacher shows the Chinese character "Four" to Level One students during a Mandarin lesson at an international school in Hong Kong in September.


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HONG KONG—Over the past two years, the number of expatriates moving to Hong Kong has surged, lured by China's booming economy. But the steady influx of newcomers has created a huge bottleneck in another area: the region's international educational system.


The dearth of places at the top preschool, primary and secondary international schools is acute and has prompted warnings from business groups that it could erode Hong Kong's position as the international financial hub of Asia. Some people have had to cancel or delay moves because their children couldn't get into schools, while others are planning to move elsewhere.


Michael Chae, who covers Asia for an asset management company in Tokyo, was gearing up to move to Hong Kong a few months ago. One hitch: After applying to several international schools, he was told that it was impossible for his four-year-old daughter to secure a place this year. Now he's aiming to move to Singapore, Hong Kong's archrival, next year.


Samantha Sin for The Wall Street Journal
Hong Kong Academy, a private international school, has seen a 35% increase in applications this year.


From December 2009 to September 2011, the number of U.K. nationals moving to Hong Kong jumped 53% to 15,300; the number of Americans increased 18% to 31,500; Indians are up 21% to 29,200 and the number of Japanese has increased 22% to 8,900, according to the Immigration Department. Meanwhile, there are 36,000 mainly English-speaking international school positions—a figure that has remained more or less constant over the years—and hundreds of parents jockeying to get their kids into the most prestigious ones.


"There is a big British bank that won't post people here with school-aged children. The HR director at a British multinational had to be based in Singapore" while the rest of the team is in Hong Kong, said Christopher Hammerbeck, the executive director of the British Chamber of Commerce in Hong Kong. "This is a reputational issue for Hong Kong. It is a problem that stems directly from the success of Hong Kong, not its failure."


The Hong Kong government has vowed to solve the problem by creating 5,000 new international school places for next year and the year after and limiting the number of local students who can be enrolled in some international schools in the future. The new spaces will add to the 36,000 existing international school slots by providing new "greenfield" sites for schools.


Despite the long waiting lists for schools in Hong Kong, the situation in China is much better, primarily because international schools cannot accept Chinese nationals. The same applies to Singapore, where the Compulsory Education Act requires children to attend a "national primary school," which refers to government schools and government-aided schools.


The biggest factor, as with everything in this crowded city, is space, plus the fact that since the government derives most of its revenues from land sales, it's not likely to offer prime real estate on Hong Kong island to nonprofit schools. "In Hong Kong, the issue fundamentally comes down to land—there just isn't any," says Robyn Joseph, former chairwoman of the board of trustees at the Hong Kong Academy, a private international school that has seen a 35% increase in applications this year. "Sure, it's a frustrating issue, but there's only so much the government can do."


The new schools, including the prestigious British institutions Harrow International School and the Kellett School, won't be located on Hong Kong island, home to the iconic skyline and most expats. Instead they will be across the harbor and miles away in Kowloon or the New Territories—the only areas where sizable plots of land are readily available.


The Hong Kong Academy, which has 470 students in kindergarten through grade 12, is moving in 2013 from a temporary location on Hong Kong island to a campus in the New Territories. While the new school boasts a nearby beach for windsurfing and kayaking and a rooftop courtyard for exhibiting art, it is far from the center of Hong Kong. The school says that parents embraced the decision after many years of uncertainty about whether the school's lease would be renewed.


The irony of the long waiting lists for these international schools is that there are fewer children overall in the city. The fertility rate in 2009 in Hong Kong was 1.04 births per woman, according to the World Bank, roughly half the level of the U.S. and U.K. As a result, public schools in Hong Kong are slowly closing.


But parents in Hong Kong take their children's education seriously, and many try to get their children into international schools. In addition, after the epidemic of Severe Acute Respiratory Syndrome, or SARS, befell the city in 2003, the international schools lost students when families fled Hong Kong. To stabilize their numbers, the schools started accepting more locals.


"One of the reasons the schools are getting so full is that local Hong Kong families are pushing their kids into these schools," said Andrew Work, the executive director of the Canadian Chamber of Commerce in Hong Kong. 


Local families provide schools with a more stable student body compared with expats, who tend to leave after a few years or when times get tough.


The demand for space has exposed a surprising wealth gap among expats, who are themselves usually paid far more than the local population. Some schools are selling what are known as debentures, which are typically interest-free loans, to parents costing upward of US$80,000. The attraction is that debenture holders often can leapfrog waiting lists.


But expats who don't earn big salaries are frustrated. Dawn Stout relocated to Hong Kong late this summer from Atlanta, after her husband, a sourcing manager, had trouble finding work in the U.S. "We had to come out here for the job," says Ms. Stout, who is homeschooling her seven-year-old because she's wait-listed at an international school. "We're not with a big company, so we don't get any debentures for these schools," she says.


—Chester Yung contributed to this article.