One recent winter dawn, more than 100 mainland Chinese parents started lining up outside a primary school in Hong Kong, to try to clinch Grade One places for their children.

They were among 700 parents competing for 550 school spots in an area near the border with the mainland that has become a magnet for people in Shenzhen and nearby cities who want their Hong Kong-born children educated in the Asian financial hub.

"It was totally unexpected. We had to start another queue," said the school's principal, Siu May-cheuk. "Parents are just afraid that the school will be filled with mainland children."

The allure is a better, more liberal education and international opportunities in Hong Kong. Every day, around 20,000 students are shuttled across the border from the mainland, dressed in neat Hong Kong school uniforms and lugging their bags on trains and chartered buses.

Since the former British colony returned to Chinese rule in 1997, both sides have integrated more closely, with a flood of Chinese visitors bringing economic benefits to Hong Kong.

But the influx has also caused resentment and strains in the city of 7 million people, from crowded maternity wards to soaring apartment prices, besides the scramble for schools.

Roughly a quarter of births in Hong Kong between 2002 and 2012 - or more than 200,000 babies - were to couples who both came from mainland China.

Writes Alice Woodhouse and Yimou Lee for Reuters

Commentry from Janice Ng, British Council

Over the last 10 years, an accumulative total of 200,000 babies were born in Hong Kong to mainland couples. These children are eligible for residency and accompanying benefits including free education. When these children move up the Hong Kong education system, in the next decade, an extra 20,000 students per year are likely to compete for limited Hong Kong university places. Implication to UK universities is that those who meet the general entrance requirements for local undergraduate university programmes yet not get a place, are likely to opt for elsewhere for higher education. UK universities might be aware of falling demographics (low birth rate) in Hong Kong, however this influx of children born to Mainland Chinese parents counter-balances the local demographic trend.

In 2013, the second cohort of the HKDSE, 82,283 students sat the examination, with 28,418 met the general entrance requirements for local undergraduate university programmes fighting for 12,000 local university places. 

Should you have any queries about the Hong Kong market, and prospects for student recruitment or institution partnerships please contact Steve Corry, Regional Business Development Manager at (852) 2913 5156 or e-mail to Steven.corry@britishcouncil.org.hk.