Foreign degrees taught in Hong Kong are set to be recognised in mainland China, potentially opening up a huge new market for UK universities.

Chinese officials told delegates at a British Council conference in Beijing that they are close to expanding a mutual recognition agreement to cover overseas qualifications, which would attract more students from the mainland to study in the city.

UK institutions offer around 70 per cent of the overseas programmes taught in Hong Kong, the Quality Assurance of Degrees Awarded in a 3rd Country conference, held on 10 December, heard.

Among the institutions that have degrees programmes in the city are the universities of Strathclyde and Birmingham, which offer MBAs.

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The conference was told of a trend for students to travel overseas to take a degree in a different country from the awarding university - so-called ¡°third-country¡± students.

Lorne Gibson, convener of the transnational education group at the International Education Association of Australia, said that Malaysia was winning Arab students attracted to its Islamic culture, for example.

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She also argued that only a handful of universities from each country would dominate overseas education in the future.

In Australia, just seven institutions control half of the overseas market, she said, and added: ¡°Universities will either be in transnational education and aim to do it really well, or not at all.¡±

Carolyn Campbell, head of networks and partnerships at the Quality Assurance Agency, said that the growth of ¡°third-country¡± international students - such as mainland Chinese students studying for UK degrees in Hong Kong - made recognition of foreign qualifications by governments essential.

The QAA has just completed several visits of sites where UK university programmes are being offered in China as part of an audit of teaching in the country.

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In December it issued new guidelines on all academic partnerships, both domestic and overseas.

Ms Campbell said that the QAA was looking to make its quality assessment more like that of other countries to make such audits more comparable, which could make it easier for foreign governments to recognise UK qualifications overseas.

David Willetts, the universities and science minister, has encouraged UK universities to expand the number of students they teach abroad, and in May last year called ÖйúAƬ a ¡°great British export industry¡± that could be ¡°far bigger¡±.

He has suggested that institutions could raise money through the stock market or from major investors.

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david.matthews@tsleducation.com