Unprecedented reliance on tuition fees from Chinese students has left Australia vulnerable to shocks that could undermine its entire research effort.
China experts say Australian universities’ financial dependence on a single group of students jeopardises more than teaching funds, with all university operations susceptible to vacillations in demand from the most populous country.
They say the reliance is concentrated in Australia’s research-intensive universities. The issue should factor in risk assessments conducted not only by universities but also the federal government. “It’s about whether assumptions around risk in the current model are tenable,” said John Fitzgerald, of Swinburne University’s Centre for Social Impact.
A NSW Auditor-General’s report last week found that foreign students’ fees comprised 24 per cent of funding for the state’s 10 universities. This proportion had risen six percentage points in just four years, with the commonwealth contribution falling by the same margin.
Chinese students comprise 42 per cent of the state’s foreign higher education enrolments. Extrapolating these figures around the country, fees from Chinese students constitute 10 per cent of universities’ revenue.
The report found the dependence was concentrated in NSW’s two Group of Eight universities, where the proportion of international students had surged to 33.5 per cent of enrolments at the University of Sydney and 31.8 per cent at the University of NSW.
Go8 chief executive Vicki Thomson said Chinese students made up 60 per cent of the group’s overseas enrolments, with its eight sandstones hosting more than half of the Chinese higher education students across the country.
“A small change in that would be a significant issue for universities,” she said. “We’re very concerned that all our eggs are in one basket.”
Australian National University economist Jane Golley said Chinese officials could pre-empt such a change if they took offence to comments or policy changes in Australia. She said they had already demonstrated a willingness to use this sort of “stick” in moves against South Korea, Taiwan, Japan and The Philippines.
“Why wouldn’t they?” said Dr Golley, deputy director of the ANU’s Australian Centre on China in the World. “There’s certainly a history there.”
She said the most obvious example of such retaliation was the boycotting of tourism to South Korea over its hosting of a US antimissile system.
Dr Golley said likely triggers of retaliatory moves against Australia could include inflammatory comments by its leaders, or participation in freedom of navigation exercises in the South China Sea. Offensive courses, forums or textbooks also were possible causes.
The biggest risk may come not from officials but unilateral action by students and their parents.
“Well ahead of any government intervention, we could see reactions from patriotic students supporting their country,” said Professor Fitzgerald, a former Beijing resident and chairman of the Australia-China Council’s education committee. “Australia could come to appear an unsavoury and hostile place, which could lead to student numbers declining before government action of any kind.”
He said the 2010 crash of Indian enrolments, over attacks on their countrymen, had occurred without government prompting.
Professor Fitzgerald said the federal government’s proposed budget cuts were based on an assumption of “linear progression”.
“If that continuous growth is based on 10 per cent income from Chinese students, you’d have to question how solid the assumption is,” he said. “While universities can seek to diversify their student sources at the institutional level, the federal government should be reducing the incentive for universities to cross-subsidise core research by more directly funding the full cost of research.
“The labs are very heavily dependent, like all research infrastructure, on cross-subsidies from international students. That’s not an institutional level issue; that’s a federal issue.”
Education Minister Simon Birmingham said: “It fails the logic test to suggest that universities, who are in receipt of record public funding, would also want taxpayers to provide a guarantee over their private income sources.”
By JOHN ROSS