Terry McCrann: China will buy what it wants but that doesn’t mean our unis should bow down

China will buy our raw resources because it needs them, but when it comes to Australian university places, we must not bend over backwards to its demands, writes Terry McCrann.

China buys stuff from us because it wants the stuff. Exactly the same applies in reverse.

This is the absolutely basic and I would have thought blindingly obvious reality that is the foundation of our relationship and which — slightly differently — should be the basis of our broad policy approach and specific decisions.

That word “basis” is important. It does not mean China should be allowed to buy anything and everything that it wants from us.

This applies especially to assets. It shouldn’t be (and isn’t) given carte blanche to buy any property and any business it wants.

But it also applies to goods and services. Take the obvious one — masks. It shouldn’t be (and isn’t) allowed to buy every surgical mask in Australia.

But also take a less obvious one: it shouldn’t be (and isn’t) allowed to buy the entire output of, say, Monash University. That is to say, buy every student place in a particular faculty or even a particular year across the university.

Many Chinese students have coveted a place at an Australian university.

This means, that we let China buy what it wants from us subject to decisions taken in our — to put it bluntly — self or broader national interest. And when any self interest — of, say, a university — clashes with the national interest, the national interest has to take precedence.

In practical terms, this means we should neither pander or grovel to China but also that we should not engage in gratuitous aggravation. We should just be clear eyed and firm, and always based on realism and reality.

Consider the major things China buys from us: iron ore and coal, tourism and education.

Iron ore and coal are the clearest examples of China buying from us because it wants and indeed needs our minerals. There is no way it is going to stop buying them to “punish us”.

Yes, from time to time it plays games with specific shipments. But they are almost always a consequence of internal game-playing between different power groups inside China or market manoeuvring that has got nothing to do with geopolitics or diplomacy.

The first is almost impossible to understand and analyse in Australia; there is also exactly nothing we could do about it anyway. The second is what happens in every market in every economic system, every day around the world.

The tourists will keep coming — when they are allowed again — or they will go somewhere else. Yes, China could prohibit them coming to Australia, just as from time to time it has prohibited its citizens from going to Macau.

China will continue to buy Australia’s resources like iron ore because, it needs them. Picture: BLOOMBERG

But the chances of that are slight to non-existent; if it ever happened it would be very temporary, and again there is precious little we could do about it, especially pre-emptively.

Again the biggest mistake we could make would be to attempt a pre-pander in some way. But at every level, we should continue to work to make Australia an attractive place for Chinese (and all other) tourists.

The immediate “hot button” issue is China seemingly dissuading students from coming south. That word is all important — dissuading, not prohibiting; individual students will have to make their own decision.

Again, there is nothing we can do to force the Chinese to “undo” its decision; like with tourism, we can continue to make them welcome.

But what we must not do is to allow cash-hungry universities to force us to embrace panderism. It simply won’t work, but would actively undermine the realism of our relationship.

In any event, the level of Chinese students — and international students in total — must be decided in our national interest and the interest of Australians, not that of the perceived financial interest of individual universities.

Their primary purpose must be to provide tertiary education for Australians. It clearly makes sense on a whole series of levels for them to have fee-paying international students.

Indeed, properly done, it should actually and significantly enhance the delivery of their prime function; and clearly contribute to the broader national interest. Educating Chinese and other international students in Australia is clearly to both our benefits.

China will buy Australian education as long as they continue to want it.

Just as clearly though, too many universities individually and the system overall, has become over-reliant on foreign fee-paying students. This has just as clearly debased the performance of their core function: servicing Australian students.

They were already in full pander-mode before the virus; they are now in pander-panic mode, utterly vulnerable to China-heavying, and demanding the government join them.

The universities must be “counselled” to not just “reassess” their academic and operational business model but to return to their basic responsibility of providing tertiary education for Australians, with the international offer integrated with, and subject to, that core responsibility.

As I said, the Chinese will keep buying Australian education for so long as they continue to want it. And a big — maybe the biggest — driver is access to Australian visas.

Arguably, some restriction from our end from the open – slather access approach of the pre-virus world will make access even more desirable. Indeed, China’s dissuasion would itself work with this to elevate access to an Australian university to be even more of a premium product.

Pre-virus our universities were well on the way to both marketing themselves and actually being the Yellowtail of education. They’d be much smarter to make themselves the Grange equivalent, especially for Chinese buyers.

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Originally published as Terry McCrann: China will buy what it wants but that doesn’t mean our unis should bow down