Monday, 3 February 2020


Universities have put an awful lot of eggs in their Chinese baskets

No doubt there were a lot of meetings at universities last weekend, full of well-paid but panicked officials. The only topic was how to deal with the coronavirus and how this might affect enrolments of full-fee paying students from China. Of course, the welfare of students and staff is paramount, but the implications of a marked downturn in Chinese students don’t bear thinking about.
The universities most affected include Sydney, NSW, the University of Technology Sydney, Melbourne, Monash, the Australian National University, Queensland and Adelaide. Monash is delaying the start of the academic year by one week. But this response now looks inadequate given the temporary ban on Chinese nationals — apart from Australian citizens and those with permanent residence — arriving in the country. It also turns out that a part-time staff member at Monash is one of those affected by coronavirus.
But it’s hard to muster too much sympathy for the universities, hellbent as they have been on pursuing more and more international students, even if it has been at the expense of local students and the quality of courses. Have the senior officials or the councils of these universities ever stopped to consider the vulnerability of their business models, their dependence on international student fee income, particularly from Chinese students?
In 2002 there were about 50,000 students from China studying here; it is now about 260,000, the vast majority of whom attend universities.
International student fee income accounts for about 25 per cent of total university revenue; the percentage is much higher for some universities. In terms of Australia’s total annual export income, more than $12bn comes from Chinese students, which greatly exceeds the figure for Indian students ($5.5bn).
We don’t know how the coronavirus will develop nor its full implications. But we know China has cancelled the examinations to test English language proficiency for several months. This will affect new student university enrolments in Australia for the second semester even if the coronavirus is quickly contained.
It was interesting to observe federal Education Minister Dan Tehan joining the education sector’s panic last week when he declared that “Australia must send a message” that the country is still open to international students and that all schools should follow the advice that pupils must be in class.
He chastised independent schools for instructing Chinese students and other students who had visited China to stay home to avoid spreading the virus.
Talk about the mighty dollar taking precedence, attempting to question the right of independent schools to make their own decisions, and acting as some sort of amateur public health specialist.
Of course, the lack of a moral compass is rife within the university sector. The vice-chancellor of the University of Adelaide has rationalised his university’s quest to increase the number of international students to 10,000 “to help cover for Australia’s uniquely bad research funding system”.
This was followed by the laughable comment of that university’s deputy vice-chancellor who said increasing the number of international students would develop “intercultural competence” in all students. “It is what our domestic students need us to do — connect them with people from elsewhere.” Were the domestic students asked their views?
Researchers have been belling the cat on the excessive number of international students at Australian universities even if their concerns have fallen on deaf ears. University of Sydney associate professor Salvatore Babones has pointed out that the proportion of international students in Australia is far greater than other countries — 2½ times greater than Britain and three times Canada’s.
Bob Birrell and Katharine Betts have analysed the international student body in Australia. They note that Chinese students are disproportionately represented at the older universities and it is common for the annual fees to be about $40,000. The enrolments in some coursework masters are close to 80 per cent Chinese.
While it is true that Chinese students are more likely to return to their homeland than other international students, many remain after graduation given Australia’s accommodating visa arrangements. These arrangements are uncommon overseas.
It’s not just international student numbers affected by the coronavirus. Tourists from China are the largest single group entering Australia; the numbers are huge.
There were more than 800,000 visitors last November, almost 120,000 from China. China has now blocked group visits overseas for at least two months. In any case, the ban on Chinese nationals entering the country will have a significant immediate effect.
We should not forget that when the severe acute respiratory syndrome virus, which also originated in China, hit in 2002-03, not only was the Chinese economy measurably smaller than it is now but our links to that country were also much weaker than today. Indeed, Japan was our major trading partner back then.
Today, China is our largest trading partner by a country mile, accounting for almost one-third of our exports. Think iron ore, coal, copper and several other commodities as well as international education and tourism. Our economy is now much more vulnerable to the shock of coronavirus.
The coronavirus will dominate the news until it is clear the virus has been contained. Hopefully, the mortality rate remains as low as predicted. But in the meantime, it’s surely time for reflection on the lack of diversification of our exports, particularly international students. The universities may need to start cutting their cloth in response to this new environment.
With about two million temporary migrants living in Australia, including a large number from China, it is also time to consider changes to our immigration arrangements to ensure that the number of temporary migrants can be reduced to more manageable numbers and thereby place less pressure on our large cities.
Judith Sloan is an economist and company director. She holds degrees from the University of Melbourne and the London School of Economics. She has held a number of government appointments, including Commissioner... 

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