Chinese international student bust risks “economic calamity”

Chen Hong – professor and director of Australian Studies Center, East China Normal University – has written a stern article in the Global Times (the Chinese Communist Party’s nationalistic tabloid) attacking delays in visa processing times for Chinese students and warning Australia that any “significant decline in Chinese students would indeed bring about economic calamity”:

International education is one of the most important components of Australia’s economy. It is the country’s fourth largest export after coal, iron ore and natural gas…

Chinese students currently make up about 38 percent of international student enrolments at secondary and higher education institutions in Australia…

It is true that any significant decline in Chinese students would indeed bring about economic calamity to Australian universities and secondary schools. For example, at the University of Sydney alone in 2017, Chinese enrolments generated A$ 500 million, which was in fact one-fifth of the university’s annual revenue…

However, it is dumbfounding to learn that Australia has been continually obstructing and delaying the visa processing of 135 Chinese PhD candidates and 30 visiting students who have applied for Australian visas and waited for over 5 months or even over a year…

To use visas to block prospective Chinese students is like building up the allegorical Trumpian wall, which purports to stop the free flow of human knowledge and the mutually beneficial cooperation in scientific inquiry related to the mysteries and wonders of the world and the universe.

For its part, Australia’s Department of Home Affairs has rejected the accusation that it is deliberately delaying visa applications from Chinese students:

The spokesperson for Australia’s Department of Home Affairs said in the response e-mail to the Global Times that the authorities have to run complete health, character and national security checks for the applicants.

The spokesperson said that the checks are not specific to Chinese nationals and said “any suggestion otherwise is incorrect”…

The spokesperson noted that the student visa grant rate for Chinese postgraduate applicants was 98.9 per cent from July 1, 2019 to December 31, 2019, higher than the overall rate for the same period.

Whether it is true or not, stemming the flow of Chinese international students would be a positive development.

Chinese student growth has been extreme, with 240,000 Chinese enrolled across Australia’s various educational institutions in 2019, according to the Department of Education:

Australia has by far the highest concentration of Chinese international students in the world, as illustrated by Professor Salvatore Babones from the Centre for Independent Studies (CIS):

China’s creeping influence is reflected in the 13 China-backed Confucius Institutes operating at Australian universities, including many of the prestigious Group of Eight (G8) institutions such as the universities of Sydney, Melbourne, NSW, and Queensland.

It is true that a significant fall in Chinese student numbers would negatively impact Australian university finances. As noted by Salvatore Babones:

It has been reported in the press that Chinese students account for 60% of combined international enrolments at Australia’s G8 group of research intensive universities, which includes the ANU, Melbourne, Sydney, and UNSW (but not UTS). In addition to these four universities, Monash, Adelaide, Western Australia, and Queensland round out the G8…

In 2017, they relied on Chinese student course fees for anywhere from 13% (Adelaide and ANU) to 22-23% (UNSW and Sydney) of their total revenues. Even these figures likely understate their true China exposure, since they generate substantial non-course revenue from Chinese students as well.

However, their importance to the broader Australian economy is overstated.

While China ($12.1 billion) dominated Australia’s education ‘exports’ in 2018-19:

These ‘exports’ are overstated, since they include both tuition fees ($15 billion in 2018) as well as expenditure while studying in Australia ($20 billion in 2018); the latter of which is often paid for via money earned while working in Australia:

Thus, much of this “goods & services spending” is no more an ‘export’ than a domestic university student that lives out of home and supports themselves through paid employment.

Professor Salvatore Babones’ also debunked the myth that education ‘exports’ are critical to the Australian economy:

International students are clearly important for Australia’s universities, but their importance to the economy as a whole is frequently overstated. One oft-quoted statistic is that educational exports have risen to become Australia’s third-largest export after iron and coal. That doesn’t really capture the full story, since exports in different sectors are reported at different levels of granularity.

Figure 5 compares the size of Australia’s educational exports to that of other major sectors from across the economy, using data from the Australian Bureau of Statistics (ABS). Additional historical data going back to 2002 are reported in Table 5 in the Appendix. Educational exports overtook receipts from all other travel (tourism, family, and business combined) in 2008, but are still smaller than Australia’s exports of agricultural or manufactured goods. Moreover, more than half of Australia’s reported educational exports (53.7% in higher education and 57.2% for the education sector as a whole) consists not of student fees, but of goods and services bought by students while in Australia. Since this spending is at least partly generated by income that students earn from working in Australia while studying, the true net value of education exports to the Australian economy is likely lower than the headline figures reported by the ABS and DET…

Certainly, any significant decline in Chinese international students would be painful for Australia’s universities. But the impact on Australia’s broader economy is overstated.

Moreover, it is necessary to return their enrolment concentration to a more balanced and sustainable footing, as well as to safeguard Australian university standards and academic freedoms, which are both under threat.

Leith van Onselen
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  1. my Uni experience was greatly diminished through having internationals particularly young men hanging out at all hours in the computer rooms

    Got tired of unis bending over backwards at the expense of locals. Ffs you can even work here 20
    Hours a week and supposedly whatever you want during end of term AND bring your spouse AND kids here ffs

    Locals should despise all international students If they cared about the future or their kids futures

  2. chinese students are probably most likely to be real export – foreign students who bring money, don’t earn much here while studying and not sending money back home so decline of chinese and rise of some other students will have a significant impact on the economy

  3. So, um – according to your own article, and Salvatore Babones own research education export is in fact the third largest export sector which may possibly be less if we remove the Chinese earnings while here….or maybe not. No data is supplied.

    I see absolutely nothing wrong with Australia developing and education export sector – nothing at all. Services are one of the few things we have left and is the primary focus on economic development for the west – services.

    If the income from these students is slightly less due to some working while studying then maybe its only our fourth largest export. Its still a massive component and dismissing it with such tentative unsubstantiated hypotheticals holds little water.

    Rampaging against “Chinese students” is pretty much ground zero for racism. Sorry it just is. The focus of this website has been about excessive migration, and to that end the focus should be returned to offering permanent residential status for students who study here as a pathway.

    Its a much more legitimate nexus of debate on the issues and removes the high vis paint job of overt racism. Nothing wrong with questioning migration numbers, nothing wrong with insuring transparency and education standards amongst Chinese nationals overstepping their “homeland agenda”. The integrity of national security and standards of education should be maintained. Agreed.

    • Hi ThinL. I possibly agree with your arguments as far as they apply to certain comments made here, but I don’t think it applies to MB in general. I see the thrust of the MB argument being that universities have compromised the education available to Australian tertiary students in an attempt to attract more international students.

      Irrespective of the value to the economy in the short term, this is a long-term negative and a profound one

    • We need a proper discussion as to the actual value of foreign students.

      It seems its value is often inflated in economic terms, with other economic costs not factored in (impact on student work rights on employment figures).

      There is no talk about the social costs (reduced standards for local students).

      Perhaps if the public understood it wasn’t so lucrative, there would more constructive evaluation pushing foreign student numbers. We may decide it’s not worth it and as a nation, we are better at focusing our resources to better yielding exporting industries.

      Let’s support exporting industries – but let’s be informed to how big (or little) such exporting industries actually are and how destructive that may actually be.

    • I believe the debate is also about Chinese cultural behaviour.

      But cry ‘raci$m’ so the issue doesn’t get talked about.

  4. reusachtigeMEMBER

    We need to be encouraging many many more international students as they are great for the economy.

  5. 135 Chinese PhD candidates and 30 visiting students who have applied for Australian visas – These are the PLA PhD students.

    “China’s People’s Liberation Army (PLA) is expanding its research collaboration with universities outside of China. Since 2007, the PLA has sponsored more than 2,500 military scientists and engineers to study abroad and has developed relationships with researchers and institutions across the globe.1

    Australia has been engaged in the highest level of PLA collaboration among Five Eyes countries per capita, at six times the level in the US. Nearly all PLA scientists sent abroad are Chinese Communist Party (CCP) members who return to China on time.”

    Why else would the Chinese government be kicking up such a fuss about these particular students?

  6. reusachtigeMEMBER

    I’m a fan big Chinese international student busts but you don’t experience them often. Vietnamese student busts on the other hand.

  7. Scrap the path to permanent residency / citizenship and see how many students want to study in OZ.

  8. Jumping jack flash

    “…the allegorical Trumpian wall, which purports to stop the free flow of human knowledge and the mutually beneficial cooperation in scientific inquiry related to the mysteries and wonders of the world and the universe.”

    Well, I never knew Mexico was so relevant to world research…

    but I digress.

    “…warning Australia that any “significant decline in Chinese students would indeed bring about economic calamity””

    Obviously the Chinese think their students bestow riches, both literally and figuratively, onto our educational institutions which would be so much worse for not having them attend, but in terms of the fascinating New Economy, Chinese students aren’t all that vital. Not as many Chinese students work for $10/hour or less in our wonderful gig jobs as say, Indian students – enabling the owners of these fine businesses employing said students to cut their labour costs and use that windfall to acquire more debt to propel the economy to new heights.

    So, meh.