For years, Chinese students flocked to MSU. Now their numbers are declining.

EAST LANSING - All around the circular table that Jianshu Jian and Xi Chen occupied inside the Michigan State University Union, their fellow students were frantically typing away at final projects while pop hits from Halsey and Shawn Mendes played in the background.

The pair, who both hail from China, had paused momentarily to discuss the benefits of studying in the United States.

Toward the top of that list: Getting to see Hollywood movies before their friends back home.

They had seen the new Avengers movie the night before, finding time to do so despite the impending crush of finals week. Their friends in China wouldn't be able to see Captain America and crew fight the bad guys on the big screen for another two weeks.

“I think the first time I heard of this school was when I was 16 or so,” said Xi, who wore dark bold-frame glasses and a black T-shirt bearing the name and logo of the Chinese Students and Scholars Association. “One of the friends of my mom, his son was studying at Michigan State.”

For Jianshu, MSU’s offer was the best he received from an American school. It didn't hurt that MSU boasts a highly-ranked communications college. Chinese families put heavy weight on the rankings of prospective schools, he explained.

Xi and Jianshu, who met when they were freshmen living in Hubbard Hall, are among the thousands of Chinese students who’ve enrolled at MSU in the past decade.

But they're not coming like they used to.

Between 2006 and 2014, MSU’s Chinese undergraduate enrollment skyrocketed from fewer than 100 to nearly 4,000. For a time, more Chinese undergraduates were enrolled at MSU than at any other university in the country.

Collectively, they've made a tremendous impact — culturally and financially — on MSU and in the surrounding community.

By the time Xi and Jianshu arrived in 2015, the steadily growing stream had begun to ebb. MSU had started recruiting Chinese students earlier than most, but other U.S. schools soon threw their hats in the ring. China began bolstering its own universities. More recently, the federal government has begun issuing fewer student visas.

The decline is more than an issue of demographics for MSU and the surrounding community.

Many Chinese undergraduates arrived with a lot of disposable income. Their presence created new markets for high-end apartments and luxury cars.

And, because international students pay more than $40,000 in tuition and fees each year, their presence also allowed MSU to blunt the effects of lagging state appropriations, to keep tuition increases lower than they might have been.

The number of Chinese undergraduates on campus has fallen by more than 13% since 2014. The number of international students who have said they'll be enrolling as freshmen next fall is down 28% percent from the year before, with most of that drop coming from Chinese students said Jim Cotter, director of MSU’s Office of Admissions.

The university could soon face the challenge of filling a China-sized hole in its enrollment puzzle or adjusting to a new economic reality, and that's on top of the $500 million settlement MSU reached with hundreds of victims of former university doctor Larry Nassar.

“The Chinese population on campus grew so quickly that, to some degree, we are beginning to perhaps level-out to a more appropriate number,” Cotter said. “Chinese enrollment rose so quickly that I’m not sure it represented truly what was sustainable.”

A shrinking market share

Of the more than 1 million students from outside the U.S. who come here for higher education, roughly a third are from China, according to the Institute of International Education’s 2017 Open Doors report.

MSU ended up being one of the leading institutions in the U.S. It's quite the turnaround, considering only 10% of its undergraduates were from outside Michigan as recently as 2004.

To address that, MSU's Board of Trustees approved a plan in 2006 to bring out-of-state and international enrollment up to 25%, ideally with equal shares.

"We're doing a disservice to students if they come to Michigan State University and it looks and operates much like a large Michigan high school," then-MSU Provost Kim Wilcox said in 2011.

Peter Briggs, director of MSU's Office of International Students and Scholars from 2001 to 2014, describes what came next as a “marriage of convenience.”

“There was sincere attempt to diversify,” he said, “and isn’t it nice that these people pay more money.”

The push coincided with the State Department issuing more visas for students hoping to pursue higher education in the United States, Briggs said.

Chinese undergraduates numbered 1,623 by the fall of 2010. Two years later, it was 2,860, and then 3,899 by the fall of 2014, one out of every 10 undergraduates.

In the Institute of International Education's 2014 ranking, MSU placed ninth among leading host institutions, third among the Big Ten. In terms of Chinese undergrads alone, MSU was at the top, beating out the likes of New York University and the University of Southern California.

The latest rankings have MSU at 16th, behind the University of Michigan and four other Big Ten schools. This despite the number of Chinese students nationwide still increasing year-to-year, albeit at a slower pace than in years past.

Explanations abound.

MSU was ahead of the game in reaching out to Chinese students, among the first to host pre-departure orientations in China. Now China is on the minds of admissions officials across the country. That means families have a wide range of choices, said Huini Gu, who founded the recruitment firm ZoomIn in 2014.

Of the 150 or so clients who’ve paid between $15,000 and $20,000 for her services, none have brought up MSU.

“Most of our clientele targets at the Top 30s,” she said, referring to the top-ranked U.S. schools in the country.

So-called new rich families seeking out U.S. institutions represent a trend “shared by their social (circle) and an overseas school is no different than a LV bag,” she wrote, making a comparison to costly handbags from high-fashion brand Louis Vuitton.

A lack of visas may also be at fault. In 2015, the federal government issued more than 640,000 F1 student visas, according to the State Department. This year, there were fewer than 400,000.

China has also put significant resources into bolstering its own institutions, said Tom Watkins, who headed Michigan's Department of Education from 2001 to 2005 and now serves as an adviser to the Michigan-China Innovation Center.

A recent ramp-up in anti-China rhetoric in the last election by President Trump might also be why Chinese students are seeking out colleges in Canada, Australia and in the United Kingdom, he added.

“Money goes where it’s welcome and stays where it’s appreciated, and that goes for students, as well,” Watkins said.

Impact beyond campus

The money many Chinese students brought to the region was appreciated, both on campus and beyond its borders.

International students contributed nearly $313 million to the Lansing area economy in 2016, the most recent year for which estimates are available, according to the Office of International Students and Scholars, and more than two-thirds of international students enrolled that year were from China.

Just a few years ago, Okemos Auto Collection was selling seven or eight cars a month to students from China, said Steve Shaheen, the general manager.

High import taxes make German-engineered cars cheaper in America than in China, he noted, plus, “if you can buy your child a car, why wouldn’t you pay a little extra to get a German car to put them in the safest possible car?"

Last fall, sales to Chinese students were down to four to five cars per month, he said, though they still give the dealership plenty of maintenance business.

Rachel Michaud, a vice president with Gillespie Group, said the company took notice of the increase in students from China and sought out their input when developing their Midtown property on Michigan Avenue near the Brody Neighborhood. Around half of its 66 units were occupied by Chinese students when it opened in the fall of 2015.

Midtown even used the Chinese character 家, which translates to "home," as part of its logo and in its advertising.

“They were looking for a sense of community,” Michaud said. “They wanted to have a place they could be in close proximity to communal rooms and gathering places to share experiences. They didn’t want to be separated, they don’t want housing just for Chinese students.”

Today, Chinese occupancy is closer to 30% at Midtown, Michaud said.

Yuxin Chen was a foreign exchange student at Heritage High School in Saginaw Township around the time MSU was hitting its peak of new Chinese students. It was while wandering through campus with her classmates that she decided to apply.

“The amount of people and diversity within the college was striking,” she said. “It made me want to apply here."

Xiaofeng Zhang didn’t have the same exposure to MSU as Chen did prior to applying to MSU. Attending a private high school in China, he found MSU while researching colleges online.

“I was willing to try something new,” Zhang said of coming to study in the U.S. “It feels like it’s a better opportunity to study abroad. Not everyone has that chance, so I decided to take it while I have it.”

Many of his friends from China are studying elsewhere in the U.S., at places like Purdue, New York University and the University of Washington. He’s the only one at MSU.

Chinese students have myriad options for schools, Zhang noted, inside the U.S. and abroad. Rankings of programs, perceptions of safety on campus, and even weather in a particular region can all factor into a decision.

Watkins had his own explanations.

"Some come here with extreme wealth behind them," he said. "There are others where families have done everything they could to get their education for that one child, who may be the equivalent of a 401K and a pension all wrapped up in that one child’s educational success."

What’s next?

Michigan State will pay $500 million in settlements to survivors of sexual abuse at the hands of Nassar. Approximately $425 million will be paid to more than 300 current claimants, while $75 million is being set aside to protect any future claimants alleging sexual abuse by Nassar.

University officials haven't said precisely where that money will come from, but it's reasonable to infer that future classes, and the dollars they bring to MSU, will be key for MSU's its bottom line.

More: How much money will Larry Nassar survivors get? Grim process will determine settlements

For the next incoming class, at least, it appears that more of those incoming students will be from in-state, paying less than half of what international students pay in tuition and fees.

MSU has seen growth in India and Latin America, but not enough to offset smaller numbers coming from China.

“At MSU, the enrollment from these regions are considerably smaller" Cotter noted. "As it has been historically, as China goes, so goes international enrollment at MSU."

Out-of-state students are up slightly, Cotter said. And MSU expects to welcome the largest-ever freshmen class in the fall, with the number of in-state students up 6%.

But the pool of Michigan students is shrinking. High schools around the state graduated approximately 120,000 seniors in 2008, according to the Western Interstate Commission for Higher Education. By 2020, that number is expected to dip below 100,000 and below 88,000 by 2032.

Enrollment matters more to MSU than it did in prior decades because of lagging state appropriations. Public universities in Michigan used to get the majority of their funding from the state. Today, tuition and fees at MSU account for more than 70% of its funding. Kathy Wilbur, MSU’s executive vice president for government and external relations, noted that Michigan ranks 40th among states in 10-year change in state appropriations.

In fiscal year 2001-02, MSU received $325,982,300 in state appropriations. It’s receiving about $281 million for the current fiscal year, according to state data.

“MSU’s per-student appropriations also lag when compared to the average of our research peers at Wayne State and the University of Michigan by more than $1,700,” interim President John Engler told members of the state Senate higher education subcommittee in March, according to a transcript of his statements. “That alone represents a gap of some $80 million in funding.”

Watkins said China is an important ally for Michigan, and the state needs to do more to ensure places like MSU remain attractive.

“We’re competing with the rest of the world. There’s a tendency to think that just because we’re the best we have a God-given right to stay the best. One punch to take out the champ,” he said, adding that other states and countries are stepping up to do so.

On a Friday earlier this month, Lulu Chen waited on the lower level of Michigan State University’s Breslin Center, flanked by dozens of soon-to-be Spartan graduates.

Dressed in long black robes with a rainbow of cords and hoods, the assembled students were among the thousands anxiously awaiting this year’s graduation ceremonies on campus.

Chen talked about how she would miss East Lansing, a place where she said she felt free and an overwhelming sense of comradery.

“People here are very outgoing," she said, "so they will say hi, and they will talk to you when you are outside.”

But, with a master’s degree in human resources and labor relations in hand, Chen had a new job with IBM.

And she was bound for China.

Contact RJ Wolcott at (517) 377-1026 or rwolcott@lsj.com. Follow him on Twitter @wolcottr.