Universities face $8b hit from Chinese international student bust

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As we know, Australia’s universities have the highest reliance on Chinese international students in the developed world, with Chinese students comprising 11% of enrolments at Australian universities in 2017:

In the year to October 2019, Chinese international student enrolments across Australia’s various educational instructions hit a record high 255,000, dwarfing second placed India (136,000) and third placed Nepal (66,000):

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China also dominates Australia’s education ‘exports’ (comprising fees paid and living expenditures), accounting for around one-third ($12.1 billion) of Australia’s total $37.6 billion education exports in 2019:

With this background in mind, there are now fears that the travel bans related to the coronavirus could cost Australia’s education industry around $8 billion:

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Taskforce chair Phil Honeywood said the entry ban on non-citizens who had been in mainland China was a worst-case scenario for universities, English-language colleges and schools relying on the arrival of 200,000 Chinese students this year.

“Most of the new and continuing students have been caught off guard because many were brought home to celebrate Chinese new year,” he said.

“The industry is worth $39 billion a year and if we take Chinese students out of that equation for first semester, you would be looking at a minimum $8 billion budget hit for the international education sector and the wider economy”…

Look on the bright side. At least English-language proficiency at Australia’s universities will lift, cheating will fall, and local students will no longer be forced to work on “team” projects where everyone gets the same mark, but only a few fluent English speakers actually can and do contribute meaningfully to the assignment.

This is the hit “our” universities need to wean them off the sugar teat of an endless stream of Chinese students.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.