China drops trade war hammer on international students

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In February, Beijing identified the collapse of Australian pedagogical standards driven by international students:

  • The Chinese Ministry of Education (CME) complained that Aussie universities are delivering sub-standard courses in China JVs.
  • According to CME, universities have under-invested and failed to deliver quality Australian staff numbers.
  • An audit of the courses was forthcoming.
  • The Chinese courses are often part of package degrees that then bring Chinese kids to Australia.
  • As expected, the Australian universities denied the CME’s claims.

This action by CME was clearly a shot across the bows for Chinese students attending Australian universities.

Last week, ANU warned that the CCP is likely to further restrict studying in Australia, claiming “education is Australia’s only remaining export to China valued at more than $10bn a year that Beijing can target without doing significant harm to itself”.

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ANU’s prophecy already appears to be coming true with education agents reportedly telling Chinese students to avoid Australia due to a “combination of closed borders, xenophobia and safety concerns”:

  • Some agents are now “insisting” that students apply to another country. Many agents had done away with their Australia-only desks and departments.
  • Agents have been instructed by the CCP to direct students away from Australia.
  • Beijing may halt online degree recognition, which would crater online enrolments. This would leave Australia “up a creek without a paddle” if borders remain closed.

All of this was foreshadowed in 2019 in Salvatore Babones’ seminal paper, The China Student Boom and the Risks It Poses to Australian Universities. This showed that Australian universities hade become dangerously dependent on Chinese students, with concentrations that dwarf similar advanced nations:

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Chinese students at Australian universities

Australian universities’ concentration of Chinese students was extreme.

Another paper prepared for the Business Council and Asia Society warned that the excessive concentration of Chinese students at Australia’s universities had stifled free speech and debate, as well as compromised academic integrity:

“Far from serving to diversity the student cohort, the dependence on Chinese students has ­instituted a form of classroom monoculturalism in which ­encouraging students to embrace the values of academic integrity and free debate, and facilitating the development of core capabilities in critical thinking, effective English communication and cross-cultural competence, have become increasingly difficult,” Professor Shields writes…

The report recommends that universities “tighten academic and English-language standards for Chinese students”, requiring higher scores in the Chinese end-of-school exam, the Gao Kao, and put more emphasis on the International Baccalaureate as an entry examination…

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A marked reduction in Chinese students studying at our universities would be a welcome development.

Excessive numbers of Chinese students at our universities perverted the very ethos of knowledge and learning via:

  • Repeated scandals whereby free speech was violently suppressed (e.g. the Drew Pavlou affair).
  • Universities aiding and abetting CCP persecution via intellectual property deals.
  • Academics being captured via “global talent” schemes that double their incomes.
  • Student unions being turned into Chinese lobbies and Confucious Institutes pumping propaganda into coursework.
  • Pedagogical standards being smashed in order to teach and pass sub-standard, non-English speakers.
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These developments were disastrous for the long-run productivity and prosperity of Australia, which hinges upon quality education.

There were also wider negative externalities, such as the crush-loading of infrastructure in the major cities, the crushing of wage growth, and rising property prices and rents.

In short, having too many foreign students, especially Chinese, was a net negative for wider living standards (though that is no fault of the individuals).

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In this regard, any action to curtail student numbers is another one of the delightful ironies of the great Chinese decoupling that will hopefully continue.

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.