International students next domino in US/China trade war

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Are international students the next casualty of the building US/China trade war? Bloomberg suggests as much today:

China said it was “very regrettable” that the U.S. and some American institutions have imposed restrictions on humanities exchanges, after Yale University’s president pledged support for international students amid growing tensions between the two countries.

Personnel and cultural exchange “should not be politicized and interfered with,” Chinese Foreign Ministry spokesman Lu Kang said at a briefing in Beijing on Monday. “This is inconsistent with the aspirations of the two peoples and has caused widespread concern among the academic circles of China and the United States and all sectors of society.”

Lu was responding to a question about an open letter Yale president Peter Salovey sent to students and faculty last week affirming the Ivy League school’s “steadfast commitment” to its foreign talent. U.S. concerns about technology and intellectual property theft by China have been at the center of the deepening trade war between the two countries.

More from the SCMP:

The letter was released on the same day that Emory University in Atlanta, Georgia, announced the dismissal of two US government-funded scientists for allegedly failing to disclose their sources of overseas financing and research ties in China.

Republicans in the US Congress have also introduced a bill to prohibit anyone employed or sponsored by the Chinese military from receiving student or research visas to the United States.

In addition, at least 100 Chinese students – including one ranked among the 10 most influential scientists by British scientific journal Nature – have encountered delays in visas to the US. The US also denied the 10-year visas of a number of leading Chinese experts over allegations that they were spying for Chinese intelligence agencies.

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This is another example of the how the Communist Party of China (CPC) has mis-used the West’s own freedoms against it on a number of fronts. Joint ventures between Chinese students and Australian universities do deal in sensitive military applications. Previously via SBS:

Chinese military scientists regularly work undercover in Australian universities on high tech weapons and communications research, a new report has found.

The Australian Strategic Policy Institute has found about 2500 Chinese scientists and engineers from the People’s Liberation Army have studied in foreign universities since 2007.

The study claimed some of those Chinese scientists hid their military affiliations while working overseas in areas such as hypersonic missiles and navigation technology.

Author Alex Joske described the practice as a “military-academic onslaught”, which had flown under Western radars and risks “harming the West’s strategic advantage”.

“Nearly all PLA scientists sent abroad are Chinese Communist Party members who return to China on time (rather than extend their term),” the report says.

Mr Joske said Chinese military scientists told universities in the United Kingdom, United States, Canada and Australia that they were affiliated with civilian universities in China.

But he said they mainly came from Chinese military research arms, and they worked on sensitive weapons and communications projects when overseas.

“The PLA Daily uses the saying ‘picking flowers in foreign lands to make honey in China’ to explain how it seeks to leverage overseas expertise, research and training to develop better military technology,” the report says.

Mr Joske said the Chinese military used the practice to take sensitive weapons and communications research from overseas.

Then there is the accompanying expansion of Confucian Institutes with the international student trade, which seek to embed themselves within a credible university millieu to disseminate pro-China viewpoints. In Australia, that has been challenged by our most eminent Sinologist and first post-communist China ambassador, Stephen Fitzgerald, via the ABC:

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In an exclusive interview, Australia’s first ambassador to China has raised the alarm about China’s influence in the higher education sector.

Stephen Fitzgerald singled out Bob Carr’s Australia China Relations Institute for particular criticism, saying universities need clear firewalls between donations and research.

ACRI, part of the University of Technology Sydney, was established with a large donation from the Chinese businessman Huang Xiangmo.

Mr Huang was the donor at the centre of the controversy surrounding Labor senator Sam Dastyari.

“I wouldn’t have taken the funding,” Mr Fitzgerald told Background Briefing.

“This is one of the really difficult issues about what is happening at the moment, because you don’t want to say no to all Chinese money.

“That would be ridiculous, self defeating, but you have to put firewalls between the donation and the way it is spent, and you have to be certain about the origins of that money.”

The director of ACRI, former foreign minister Bob Carr, said he disagreed.

“[This criticism] is coming from people on the cold warrior fringe of the Australian politics, people who are resentful of any hint of Australia running a pragmatic national interest-based China policy,” he said.

“There are two standards being applied here.”

As well as ACRI, hundreds of other language and culture centres have been established on campuses worldwide through confidential agreements between universities and the Chinese education ministry.

Mr Fitzgerald said he believed these centres, known as Confucius institutes, had no place in Australian higher education institutions.

“I just don’t think they should be in universities,” he said.

“Have them in Australia by all means; have them all over the country. I’d welcome them, but I don’t think they should be in universities.”

This is not to suggest that Chinese international students are unwelcome nor that they are mostly well intentioned. I’m sure it is both for the vast majority. But the international student trade is being exploited by the CPC. Does that mean it’s over or should banned? No. But there needs to be a comprehensive program of protections to ensure that the trade does not undermine the values of the institutions and states in which the trade flourishes.

Clearly in the US that is taking a hawkish tilt. To put it mildly, it is a work in progress in Australia. We now have our “foreign influence register” but what good is that when the unis appear bought and paid for, at Domain:

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The government’s foreign influence transparency scheme faces an early test as universities ignore pressure to register their Confucius Institutes — the Chinese government-funded and administered education centres that have been highlighted as a focus for the new accountability regime.

None of the 13 host universities have registered the cultural and language institutes after they were warned they might be subject to the scheme. Their position sets up a potential showdown with the government, which could seek to use newfound powers to probe the centres and forcibly register them.

But there is a more comprehensive program of reform developed under Malcolm Turnbull that would impose greater safeguards that is sitting on the shelf in Canberra gathering dust. It should be brushed off, funded and deployed.

Whether the trade withers may not, in the end, be up to money-suckered Western governments. As usual, it is the CPC itself that acts first and in Australia’s case, at least, there is firming evidence that the trade in Chinese students has fallen away anyway. Previously, via The Australian:

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The highly lucrative six-year boom in Chinese students is over.

Australian universities now are focusing on the less-developed Indian market to meet budget expectations, exposing them to the risk of enrolling low-quality students with poor English.

Ahead of the release of official figures, a senior Department of Home Affairs official briefed universities last week telling them that visa applications from Chinese students were flat, even as numbers of applications from Indian students were growing fast.

We’ve been pointing to this slowing for some time:

The peak coincides with deteriorating relations so it could well be a political maneuver by the CPC to ratchet pressure on Australia for concessions around Huawei, ANZUS and other Cold War 2.0 issues.

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It might also just be that market forces have topped out. China is increasing its own pull on students. So are many other counties. The home country wants to keep more at home to protect the value of its currency as well:

Whatever it is, universities would be well advised to plan for a further retrenchment of Chinese student enrollments, if only on a risk management basis. This trade war is getting worse not better and people-to-people links will not be immune.

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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.