Warning over rising university enrolments from China

More than 135,000 students from China are enrolled in Australian universities – nearly 40% of the total number of foreigners on campus. But vice-chancellors have been warned of the dangers of an over-reliance on just one major source of income.

Twenty-five years ago, back in 1993, a total of 43,000 overseas students were enrolled in the nation’s universities and a mere 2,700 were from China. Since that time, Chinese student enrolments have rocketed upwards by 5,000% compared with a 914% rise in total overseas numbers.

Today, foreign students number more than 350,000 and the fees they pay and living expenses they outlay contribute an estimated AU$30 billion (US$23 billion) to Australia’s national bank balance every year.

Selling higher education to foreigners has proved highly lucrative for the country, as well for the nation’s universities. This year across Australia, university earnings from the fees paid by foreign students are expected to exceed AU$7 billion, with a significant slice of that huge sum coming from mainland Chinese.

As well as being Australia’s largest trading partner, China dominates the international student intake with more than double the number of those from India, the second-largest contingent.

The extent to which selling higher education to foreigners has become a major force in the nation’s universities was shown in 2016 when, for the first time, fee income from overseas students in New South Wales’ universities alone was greater than that from their Australian students.

No surprise there: As Australian neuroscientist Peter Osborne observed, international students pay up to 400% more than Australians to earn the same degree.

“At present our best universities seem content to charge non-Australian students from countries with much lower per capita incomes about four times more to study in Australia,” Osborne said.

“In another breath, these universities are happy to espouse the benefits of being in a multinational, multicultural learning environment.”

As well as the rapid increase in university fee income from foreign students, is the extraordinary rise in their numbers. International student enrolments in Sydney have jumped 50% more in the past two years than they had over the entire previous decade.

At the University of Sydney, foreign student enrolments have doubled in just four years. And more than one in three of those students are from China.

But it is also the leading universities that are more heavily reliant on overseas student fees than any of the lesser institutions. Nearly a quarter of Sydney’s total income of more than AU$2 billion is from overseas student fees, as is also the case at the University of Melbourne and other top universities.

Universities Australia Chief Executive Belinda Robinson said the fact that so many international students elected to study in Australia was “an indication of the quality of its higher education system”.

“They're choosing to come to Australia in record numbers for a world-class higher education, the lifestyle, and our safe and welcoming communities,” Robinson said. “This is something about which all Australians can be proud.”

She noted that Australia’s international education offerings had begun in the 1950s as essentially a “small-scale international friendship programme”.

“Now it’s grown to be our nation's third largest export sector and it is incredibly important to our diplomatic, political, trade and business connections around the world.”

'Vulnerable to fluctuations'

But a report last year by the New South Wales Auditor-General warned that some of the state’s universities had become “vulnerable” to fluctuations in overseas student numbers. The report referred to the risk this posed to the institutions by an increasing reliance on one main source of income.

“The increasing number of overseas students can have significant financial benefits to a university. However, there are associated risks, including pressure on capacity constraints and the need to maintain teaching quality,” the auditor-general’s report said.

And, in a clear reference to China, the report noted there was also a “concentration risk” from reliance on overseas students “from the same geographical location in the event of an economic downturn from that region”.

But it is not just an economic downturn that could affect Chinese enrolments. The Chinese government also has a say over where its students will study and has proved sensitive to Australia’s criticism over China building its `islands’ in the South China Sea.

In December, China’s embassy in Canberra issued a rare public safety warning for Chinese students living in Australia that referred to “a rising number of insulting incidents”.

This followed Australian criticism of China's deliberate expansion in the South China Sea as well as a plan by the federal government to impose 'foreign interference laws’ largely directed at the People's Republic of China.

The same month, Prime Minister Malcolm Turnbull announced new laws that would expand the definition of espionage to include possessing classified information, rather than the current definition, which only outlaws communicating it.

Last October, too, in a clear reference to China, Duncan Lewis, the head of ASIO, Australia’s security intelligence organisation, aroused Beijing’s ire when he warned of “foreign interference in our universities”.

Critics of China’s increasing influence in Australia told the federal government that if Beijing stopped Chinese tourism to Australia, and pulled its students out of the universities, both actions would have a massive financial impact. And not just on the institutions but on the entire Australian economy.

Dr James Leibold, a China specialist at La Trobe University in Melbourne, said there was a “genuine possibility” the Chinese Communist Party would respond to future tensions between Australia and China with stronger measures to discourage its students from going to Australia.

“I don’t think our universities are prepared for that scenario playing out – it could have really devastating effects,” Leibold said.

Clive Hamilton, a professor of public ethics at Charles Sturt University in New South Wales, agreed: “We know that Beijing is masterful at using economic levers to achieve political goals,” he said.

“They will pull that lever in a big way sooner or later and that’s when universities will really have to decide what they stand for.”

Hamilton said Beijing was “very good at finding pressure points”. It was a serious global power playing “the long game” and the Chinese government had a great deal of control over its own society.

"Australian unis [universities] have done a poor job of trying to engage with Chinese students. They've taken their money but then washed their hands of them," he said.