Australian universities may face revenue collapse amid high student numbers from China

Providing education for overseas students is one of the nation’s biggest export industries but a new report warns there could be dark clouds on the horizon.

Australian universities could face a sudden revenue collapse from their reliance on Chinese students, a ­report says.

With one in 10 students in our tertiary institutions from China, the Centre for Independent Studies report has warned of risks such as the communist nation’s slowing economy.

Study author Associate Professor Salvatore Babones said about a quarter of all students were from overseas, while almost 70 per cent of Melbourne University’s business education enrolments were foreign students.

“More than 40 per cent of all onshore international students and almost certainly the majority of international student fee revenue comes from China,” said his report The China Student Boom and the Risks It Poses to Australian Universities.

More than 40 per cent of all onshore international students and almost certainly the majority of international student fee revenue comes from China. Picture: Tony Gough

“Chinese enrolments are particularly unstable because of macroeconomic risk factors such as the slowing of China’s economy … and fluctuations in the value of the Chinese yuan versus the Australian dollar.”

In the report to be released on Wednesday, he criticised Australian unis for routinely compromising admission standards to accommodate foreign students.

“Preparatory programs for students with lower English language test scores function as a paid work-around for international students who do not meet admission standards,” he said.

“By prominently marketing such alternative pathways, Australian universities are in effect taking actions that reduce their financial risks by increasing their standards risks.”

Assoc Prof Babones said universities wanted to expand further into the Indian market, but “India is too poor to serve as a realistic alternative to China”.

Universities Australia chair Prof Deborah Terry says international students injected $37.7 billion into Australia’s economy in 2018-19. Picture: Colin Murty

Assoc Prof Babones recommended that universities plan carefully to reduce their reliance on international students, especially from China.

“They should act now to mitigate the risk of a sudden revenue collapse by raising admission standards and reducing international student enrolments,” he said.

Universities Australia chair Prof Deborah Terry said international students injected $37.7 billion into Australia’s economy in 2018-19, and the nurturing of international

education over 60 years was “a great Australian success story”.

“By building international education, we continue to enhance the very high quality of education for both international and Australian students,” she said.

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“International students fund their own education and make an invaluable contribution to Australia’s world-class universities, their classmates, our local communities and the economy.”

Amid tensions on local university campuses by pro and anti-Beijing groups over the Hong Kong protests, federal Education Minister Dan Tehan said the government was taking foreign interference in the education sector “incredibly seriously”.

Mr Tehan will meet university vice-chancellors next month to finalise issues on dealing with foreign interference.

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