Chinese international student panic grips CCP apologists

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So says Gottiboff today:

Until now the fact that the NBA was very strong in China was seen as a wonderful development as it brought the two nations together, reinforcing deep commercial ties. Now it separates them.

…more importantly, if the Hong Kong protests continue for much longer then China, given the extreme nationalism sweeping the country, will intervene and almost certainly the intervention will be a very unpleasant affair.

…If community leaders, let alone politicians, do “a Daryl Morey” and tweet in support of the Hong Kong protesters, will Chinese students studying in Australia and Chinese tourism suddenly be curbed? Will there be disputes or fights between pro-Hong Kong and pro-Beijing forces on our campuses? How will China react?

…The situation is extremely dangerous for our universities, most of whom are dependent on Chinese students.

It’s not dangerous at all. This is a false binary to protect Gotti’s mate Highrise Harry from natural economic fallout.

Gottiboff assumes that the loss of Chinese international student revenue versus the loss of academic and wider Australian freedoms is some kind of equal. It’s obviously not. Losing a few billion dollars from Chinese international students that can readily be replaced by public funding is irrelevant to the national interest of protecting free speech in Australia and its universities.

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Or is it? Via the ABC:

A university academic who spoke out about international student admission standards and welfare is being counter-sued for damages by his employer after appearing on a Four Corners program.

Federal Court documents reveal Murdoch University in Western Australia is seeking compensation from Associate Professor Gerd Schroder-Turk, claiming it has lost millions of dollars in revenue due to a reduction in international student numbers since the program aired.

Dr Schroder-Turk was one of three Murdoch academics who told a Four Corners investigation in May that they were concerned for the welfare of a group of Indian students who were failing courses in higher than normal numbers.

Four Corners found Murdoch University was one of a number of Australian universities admitting international students below its own published English standards, or through other means without taking an independent English test.

Dr Schroder-Turk, who also sits on the university’s senate, commenced legal action in the Federal Court under the Fair Work Act, seeking compensation and an injunction to stop the university taking disciplinary action against him.

Griffith University public policy and law Professor AJ Brown said it was an unusual move, and could be an important legal test case.

“I’m not aware of any situation where a university, or really … any sort of organisation, has actually counter-sued the whistleblower for damages,” he said.

“That can become a very protracted and costly legal battle which basically ends up discouraging other whistleblowers from coming forward.”

The university’s counter-claim states Murdoch has incurred significant operational costs responding to investigations by tertiary regulators that were prompted by the Four Corners program.

It also states Murdoch’s Immigration Risk Rating has been upgraded to the highest level in its history by the Department of Home Affairs.

Murdoch University claims international student intake is down almost 15 per cent on forecast figures, which it said would cause revenue impact in the order of millions of dollars.

Yes, you read that right. What has become of our universities should surely be the subject of the next royal commission.

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The numbers of Chinese students are going to fall. There is no avoiding it as the cultural divide between the Chinese Communist Party and Australian democracy widens. Many commentators have warned of this.

Bloomberg’s Michael Heath is one:

Australia is losing its appeal for Chinese tourists and students as the harmful trade war between the U.S. and Beijing, paired with a slowing economy at home, spooks them into staying put.

The number of visitors from China increased just over 1% in the 12 months through July, matching the weakest rate in nine years, while the growth in students traveling Down Under to attend university has also slowed rapidly. Even a weakening Aussie dollar hasn’t managed to halt the downturn.

“We suspect the trade dispute is a large reason for the decline,” said Hayden Dimes, an economist at Australia & New Zealand Banking Group Ltd. It “creates uncertainty for both visitors and, in particular, students.”

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New Daily’s Michael Pascoe is another:

But it’s the services side of our China trade (tourism and education) that does most for job creation here – and there’s been no effective growth in Chinese visitor numbers for two years…

Chinese travel agents, for the first time in years, were not increasing the number of forward hotel bookings they made in Australia in 2019.

“Travel agents in China and analysts also warn that Australian tourism is vulnerable to any moves by Beijing to ‘weaponise’ its services industry…

These warnings come after China’s authorities last month rolled-out a raft of measures to stem capital outflows and protect the yuan from depreciation.

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The most recent international student enrolment data from the Department of Education does indeed show that Chinese student growth is fading. Chinese student enrolments increased by just 4.3% in the year to June 2019, versus 15.1% growth in the year prior:

However, there is a bigger story with the crash in Chinese student visa applications, which are a forward indicator for enrolments. According to the Department of Home Affairs, visa applications granted to Chinese students fell by 3.3% in the second half of 2018 versus the same period in 2017:

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Moreover, the falls continued in the first half of 2019, down a further 3.3% compared with the same period last year:

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Therefore, the Chinese international student boom looks to be on borrowed time. And any decline will have an acute impact on Australia’s universities and economy, given our world-beating over-exposure to China:

Chinese students and tourists are going to fall as Hong Kong is occupied, as the Chinese economy slows triggering lower interest rates and capital outflow pressures for the currency, and as China develops its own tertiary capacity. What we need to do is prepare for this fallout by creating new sources of public funding for universities as it is needed.

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Selling the already debauched soul of the national intellect, and suing our own defenders of freedom into silence, belongs somewhere deep inside the Twilight Zone.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.