Sharp fall in number of visas issued to Chinese students
Figures just released by the Department of Home Affairs show a fall of 5.2% – from 47,794 to 45,309 – in 2018-19 to 30 June, compared to the year before.
This has serious implications for Australia's top universities that have become heavily reliant on the fees paid by Chinese students – a reliance that puts them at risk should their enrolments fall.
Selling higher education to foreigners now generates AU$32.4 billion (US$22 billion) for the national economy – or nearly 70% of international export income – and the Chinese market is by far the largest.
Students from China currently comprise just under 33% of foreign enrolments at universities in Australia. This is a far greater proportion than those from India, the second-biggest group enrolled, who make up only 18%.
Australian population expert Dr Bob Birrell says that in 2008 slightly more than 200,000 foreign students were undertaking degrees in the nation’s universities whereas in 2018 they totalled nearly 400,000 – almost a doubling in numbers over the decade.
“But the overall figure hides a spectacular increase in the dependence of the Group of Eight leading universities on overseas students, particularly those from China,” Birrell says.
Of course, these are also the universities that charge foreign students very high fees – AU$40,000 or more a year.
“Yet, despite that princely sum, the number of overseas student commencements at the Group of Eight universities has increased massively and almost all of this increase has come from Chinese students,” Birrell adds.
He points out that the main attraction for Chinese students of travelling to Australia is the prospect of obtaining a degree from a university rated among the world’s top 100.
And at a much lower cost than their parents would pay in the United States or the United Kingdom – while the students also gain the prestige associated with that institution.
“These top 100 ratings are based primarily on publications in prestigious international journals and citations in these journals,” Birrell says.
Students from other parts of the world opt for the less expensive institutions where fees are a fraction of those charged by the exclusive Group of Eight.
Over-reliance on one market
But academic critics concerned by the universities’ increasingly heavy reliance on Chinese students warn that a downturn in enrolments from that one nation could be ‘catastrophic’ for the institutions.
They liken Australian universities’ exposure to the Chinese student market to the risks the nation’s big banks faced during the global financial crisis.
They also claim that Australian universities have treated Chinese students as ‘the cash cows of the international student market’.
Certainly, Australian universities have relied on students from China for their expansion and their increased funding. But this has also left the universities extraordinarily exposed to this one overseas student market.
Unlike universities in other countries, those in Australia have many times more Chinese students enrolled than any comparable institutions around the world.
At these levels of exposure, say the critics, even small percentage declines in Chinese enrolments could have a significant financial impact and any large percentage declines ‘could be catastrophic’.
US faces steep fall
This is the case in the United States where, after a decade of rising enrolments by students from China, universities are experiencing sharp falls because of the increasing political tensions between the two countries.
Many institutions report that their major source of tuition revenue has been slashed, with several describing drops of a fifth or more in the number of new students from China.
A number of universities have begun switching their recruiting efforts to other parts of the world while trying to hold on to the students from China already enrolled on their campuses.
Complicating their efforts are US concerns about security risks posed by visiting Chinese students, concerns that appear to be accelerating.
Then there is the growing international competition between US universities seeking to recruit foreign students, as well as visa complications in the US and the development of China’s own higher education system.
Although the US has long been a top destination for students and researchers from around the globe, latest reports say US universities have experienced a 10% drop in the number of newly enrolled international students in the last two academic years.
Universities Australia Chief Executive Catriona Jackson said just over two in three of the 430,000 international students studying at Australian universities in 2017 came from countries other than China.
"Australia welcomes students from all around the world and we value the contribution they make to our university communities, our country and to the education of their Australian classmates," she said.
"Universities are always thinking about diversification and the nurturing of new markets alongside the ones they currently have – and that includes expanding the education we deliver offshore."
Australian universities have more than 700 offshore programmes and campuses in countries like Malaysia, Singapore, Hong Kong, China, Vietnam, Mauritius and Dubai, she said. “And we are seeing some of the most rapid growth in international student numbers from India and Nepal.”
This report was updated on 26 September 2019.