Financial effects of the Confucius Institute on Chinese language acquisition: Isn’t it delightful that friends come from afar to teach you Hanyu?

This paper provides a theoretical analysis of the financial effects of Confucius Institutes (CIs) on the number of individuals who acquire Chinese language skills and the interactions between CIs and pre-existing local Chinese schools. It is shown that CIs will successfully induce more individuals in the host countries to learn Chinese despite the fact that Chinese language instruction offered by CIs lead to fewer self-learning individuals and declining enrollments for local Chinese schools. Finally, regardless of whether a local Chinese school exists previously or not, it is demonstrated that, under the most plausible conditions, the host country will benefit from the establishment of a Confucius Institute.