THE number of Chinese students undertaking English-language tests in preparation for coming to Australia has plummeted by more than 25 per cent this year.

This confirms fears of a downturn next year in the country's single largest international student market.

The International English Language Testing System data shows candidates are instead aiming to go to the US and Britain. It is a further sign students are being put off by tighter visa requirements and a strong Australian dollar.

In addition, an Austrade survey of Chinese agents reveals 53 per cent are expecting demand for Australian education to fall during the next three to 12 months.

The survey of 30 agents found increased costs, along with tighter migration settings and policy uncertainty, were key turn-offs for students.

Nearly half the agents reported their Australian business had fallen by more than 20 per cent, while their business for the US was up an average of 50 per cent.

Demand for Britain also remained strong, with demand increasing by between 10 per cent and 20 per cent. Last week, Austrade Beijing trade commissioner Jane Wallis presented industry representatives with data for the year to November, showing that IELTS candidature for Australia had dropped by almost 30,000 students to 87,304 from 117,286 last year. It reverses 11 per cent growth in 2009, and average growth of almost 50 per cent between 2006 and 2008.

Patrick Chen, the British Council's examinations marketing officer in Guangzhou, who manages IELTS in China, told the HES: "This year, the overall IELTS candidature is growing. However, the number of Australian-bound candidature is going down in China as a result of the current market situation."

In Ms Wallis's presentation notes, obtained by the HES, she said the US "is perceived to [lead] in terms of quality of education, education resources, research strength" and choice. She said the cost of studying in the US was now considered to be about the same as for Australia.

Britain's quick visa processing and eased financial requirements for visas were giving it an advantage, along with the availability of a two-year working visa after graduation, she said.

Ms Wallis noted that addressing perceptions Australia was "anti-immigration" were among key challenges to be overcome in China, including the strong Australian dollar and college closures.

The Austrade IELTS data shows Australian candidature for academic-level IELTS, needed for university, has dropped by 24 per cent from nearly 103,000 last year to 78,000 this year. Candidature for general training IELTS, needed for vocational courses, was worst hit, down 35 per cent from 14,303 to 9282.

"It is further evidence that there is a significant drop in the number of Chinese students wanting to apply to study in Australia," said Peter Holden, director of international engagement at TAFE Directors Australia.

Dennis Murray, director of the International Education Association of Australia, said the IELTS figures were a leading indicator of the downturn and called on Austrade to urgently implement a targeted campaign to better promote Australia. "The unwelcome mat is out and we have to change that perception," Mr Murray said.

China accounts for 27 per cent of all overseas student enrolments in Australia. Total Chinese enrolments for the year to the end of October remain up 7.5 per cent at 162,525 students, though growth in new commencements has almost stalled at just 1.5 per cent.

Chinese commencements in higher education courses remain up nearly 19 per cent.

But in a worrying sign for the number of students coming to university through pathway programs, Chinese commencements in vocational courses are down 1 per cent, while in English language colleges, Chinese commencements have dropped by 15 per cent.

TAFEs and their agents are warning of declines in commencements next year of 30 per cent to 40 per cent, while some universities are budgeting for falls of up to 25 per cent.

The latest data from Australian Education International shows that total commencements of overseas students are down by 9.5 per cent, or more than 32,000 students, as at the end of October.

Total enrolments in Australia are down 1.4 per cent at 599,795 students. Commencements are down 8 per cent in vocational education and training, and down 22 per cent in English language colleges. Higher education commencements are up 1.9 per cent.