More than 200,000 foreign students are expected to enrol in Australian education institutions this year, boosting the economy by A$4.12 billion (?1.5 billion).

Onshore university campuses are likely to get more than 100,000 students, with a further 30,000 studying offshore. A decade ago, only 28,000 overseas students studied onshore and 1,500 enrolled externally.

The "sale" of education services to foreign students jumped by almost 11 per cent last year. Figures released this month by the bureau of statistics show that although education remains Australia's third largest service export, after tourism and transportation, it is outpacing the other two service export industries.

This extraordinary expansion looks set to continue following a huge surge in student visa applications from countries across Asia, Europe and Africa. In the last six months of 2001, the number of visas granted to prospective students in mainland China jumped by 66 per cent - to 7,000 - compared with the same period the year before.

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According to the immigration department, almost 8,500 mainland Chinese were enrolled at Australian universities last September, an 82 per cent increase in two years. Overall, 18,500 Chinese were studying in universities, schools, technical and English-language colleges that month.

This year, more than 75,000 Chinese from across Asia are expected to study in Australia.

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As well as the traditional source countries of Hong Kong, Singapore and Malaysia, mainland China is now supplying a rapidly growing number of overseas students. Since 1997, the number of mainland Chinese allocated student visas has jumped sixfold and is certain to exceed 20,000 this year. This is about the same as the number coming from Hong Kong and more than double the number from Taiwan.

But the sudden rise in the number of applications has put strains on embassy staff and created long processing delays. At the Australian embassy in Beijing, a spokeswoman said it had been handling up to 15,000 applications a month and the number was continuing to grow.

To cut the time taken to assess applications, visa processing is being transferred to embassy offices in Adelaide.

"It can take up to 18 weeks for applications to be processed. We expect the new system will reduce that time considerably," the spokeswoman said.

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"In 1999 4,100 visas were issued to students from the People's Republic of China, while this year we expect to approve 15,000, so there has been a very big increase."

Amendments to visa regulations last July appear to have contributed to the sharply rising number of enrolments.