Australian universities could struggle to survive if revenue from Chinese students were to dry, a report says.
Education was Australia’s biggest service export to China last year and was worth $11.7billion or almost 10 per cent of all exports to Australia’s biggest trading partner.
Almost four in 10 international students in Australia are from China – with English-language tests reportedly watered down so they keep paying their upfront fees.
No other English-speaking nation is so reliant on Chinese students.
The Centre for Independent Studies, a free market think tank, fears Australia’s universities could collapse if China’s economy slowed and fewer students studied abroad.
‘They should act now to mitigate the risk of a sudden revenue collapse by raising admissions standards and reducing international student enrolments,’ it said.
Australian universities could struggle to survive if revenue from Chinese students dried up, a report says. Education was Australia’s biggest service export to China last year and was worth $11.71billion or almost 10 per cent of all exports to Australia’s biggest trading partner (pictured are Chinese students at Australian National University in Canberra)
Report author Salvatore Babones, a political sociologist and China expert at the University of Sydney, said taxpayers would be liable if state-sponsored higher education institutions were hit with falling Chinese student enrolments.
‘Australia’s universities are taking a multi-billion dollar gamble with taxpayer money to pursue a high-risk, high-reward international growth strategy that may ultimately prove incompatible with their public service mission,’ he said in his report, The China Student Boom and the Risks It Poses to Australian Universities.
‘Moreover, universities are risking not their own money, but public money – and the public trust.’
As of December last year, there were 152,712 Chinese students enrolled in Australia, making up 38.2 per cent of all international enrolments.
Chinese students made up 36 per cent of new student visas during the last financial year, with 68,248 moving to Australia.
The rapid growth in Chinese enrolments slowed last year, posing a risk to the revenue of universities.
International students make up one in four students at Australian universities.
Unlike Australians, who can defer their fees until they graduate, international students pay their fees upfront, making them lucrative sources of university revenue.
At some universities, foreigners are the majority of students including at RMIT in Melbourne (50.6 per cent), Wollongong (51.1 per cent) and Victoria University (55.2 per cent).
The Centre for Independent Studies, a free market think tank, fears Australia’s universities could collapse if China’s economy slowed and fewer students studied abroad (pictured is the University of NSW, which collects $446million a year in fees from Chinese students)
Other more established universities are particularly reliant on China.
At the University of New South Wales, Chinese students make up 68.8 per cent of international enrolments, or $446million from student fees.
The University of Sydney’s Chinese intake constituted 66.7 per cent of foreigners studying there, which added up to $534million in revenue.
Professor Babones said Australian universities would be in trouble if Australia and China had a major political dispute, immigration policies changed, the Chinese yuan currency depreciated and the Chinese economy slowed.
Some of Australia’s oldest universities in Sydney and Melbourne are heavily reliant on the fees of Chinese international students
‘Chinese enrolments are particularly unstable because of macroeconomic risk factors,’ his report said.
Professor Babones said universities were also enrolling international students even if they lacked proficient English language and writing skills.
‘The extraordinarily high levels of international students at Australian universities raise many questions, including questions about how well universities are performing their core academic missions,’ he said.
‘The fact that international students pay much higher fees than domestic ones for the same courses strongly incentivises universities to reduce admissions and academic standards to accommodate international students.’