THE future of Australia's $5 billion Chinese foreign student market is bleak.

Forward enrolments for critical English language courses are down by about 50 per cent next year and there is little relief in sight for at least two years.

Education agents in China expect the sharp downturn in enrolments will result in some institutions experiencing drops of more than 20 per cent in numbers of new students next year. The market is unlikely to stabilise for at least two years and then only if there is an imaginative re-think of immigration policies.

Education providers and agents who spoke to the HES said English language enrolments were the hardest hit, but demand for higher and vocational education was down by 20 per cent to 30 per cent for February entry, and more than that for July.

Almost all Chinese students take packages that include an English course and an undergraduate degree.

"From phone inquiries we can sense the reduction in interest in Australia. Enrolments for next year have decreased by 10 [per cent] to 20 per cent," said Wang Lei, a consultant at EIC Group, one of the longest established overseas study agents in China.

Last week the federal government, through its education marketing group Austrade, moved to reassure education agents in China, holding events in Beijing and Shanghai for agency staff.

Agents sell more than 90 per cent of non-thesis courses to Chinese students, who make up about 25 per cent of international numbers in Australia. Agents who attended the events said the best news was an apparent reduction in visa times, which had blown out to about three months.

Visas are now being processed in five to seven days if there are no problems, Paul McCormack, head of the visa section at the Australian embassy in Beijing, told the HES. He said that all temporary visas, including student visas, were processed through a single section rather than a range of geographical areas. The work is centralised in Adelaide.

However, incomplete visas needed to be returned to Shanghai, which could add 28 days to processing, he said.

The timeframe also would be longer in the peak December and January periods.

But changes to immigration rules, which halved the number of professions eligible for permanent residency migration, the higher level of English required for migration, along with the strong Australian dollar, remain the key issues affecting demand for Australian education, according to Wang Wei, general manager of Crossworld International Education Centre.

"With [the] Australian dollar solid, the cost of education in Australia is equal to that of the US, if not higher," Ms Wang said. The US and Canada also have opened their doors to foreign students, launching slick and comprehensive marketing efforts that have outstripped Australia's.

"The US is more attractive to Chinese as a country and American universities are better known to Chinese than Australian ones," Ms Wang said.

Additional reporting: Zhang Yufei