Are Confucius Institutes Building Blocks or Stumbling Blocks for Foreign Students in China: An Empirical Study of 190 Countries (1999–2015)

Purpose: This study investigates the impact of Confucius Institutes on China’s international education initiatives. First, it examines whether the establishment of Confucius Institutes has a gravitational effect on the scale of foreign students coming to China. Second, it discerns whether there are any association between the establishment of Confucius Institutes and the attributes of foreign students based on the type of program they select. Third, it identifies whether there are any differences in the impact of Confucius Institutes based on constraints such as the number of foreign students, income levels, cultural distance, and geographical endowment. Design/Approach/Methods: Based on the trade gravity model and the push–pull theory, we estimated a two-way fixed-effects model using panel data of all source countries from 1999 to 2015. Findings: Results show that Confucius Institutes have helped China attract more foreign students on Chinese government scholarships, with each Institute increasing such enrolment by 1.3%. However, Confucius Institutes have resulted in a drop in the total number of foreign students studying in China, especially nondegree students. This substitution effect means that the Institutes actually help China improve the composition of its foreign students. Further heterogeneity analysis shows that the substitution effect is primarily driven by the main source countries. Accordingly, this study suggests that China should establish more Confucius Institutes in Africa and Eastern Europe to maximize the catalyzing effect of Confucius Institutes. Originality/Value: In contrast to previous studies on foreign scholarship in China, this study examines all 190 source countries from 1999 to 2015. This comprehensive study also explores the heterogeneous effects of foreign students on trade across economic, cultural, and geographical domains.