An old story but a true one: the China risk is real

Australia’s top universities are highly dependent on a continuing smooth relationship with China. That might not happen.

The new report from demographer Bob Birrell notwithstanding, it’s not news that Australia’s top research universities have become highly dependent on their income from Chinese students.

Birrell’s new report, titled Australia’s Higher Education Overseas Student Industry: in a Precarious State, adds some interesting detail, specifically how much recent growth in numbers of international students at the Group of Eight universities is skewed towards China.

But it leaves us knowing what we already knew, that even a hiccup in the stream of students pouring in from China will leave the Group of Eight gasping for breath and will leave a large hole in the $32 billion a year export revenue from education.

The real question is not around Birrell’s statistics, which show how much the reliance on student revenue from China has accelerated since 2012, but where the issue of China dependency goes from here.

As was clear at the weekend’s APEC leaders’ meeting in Papua New Guinea, tension between China and Western powers is rapidly escalating.

There is a determination in the US to torpedo multilateralism, and the US and China are pushing the boundaries of the old norms. Both countries are applying trade sanctions and nobody knows where it will end.

If things keep going in this ­direction Australia will, sooner or later, be forced to pick sides. And our history and culture is likely to drive our ultimate loyalty ­towards the US, in spite of obvious disquiet about the Trump ­administration.

But there will be a huge economic price to pay, right across the economy. In education alone, the risks are clear enough.

When over a quarter of the total revenue of the University of Sydney, the University of Melbourne, Monash University and UNSW comes from international students, and the bulk of students are from China, that’s a problem in the current geopolitical environment.

On top of that is the willingness of China to use its economic leverage as a weapon. Last summer, China fired warning shots at Australian universities, saying Chinese students faced safety ­issues in Australia.

China also funds Confucius Institutes in 13 Australian universities. Critics, including Swinburne University’s respected China watcher John Fitzgerald, say the Chinese government controls the messages given to students learning Chinese language and culture in the Confucius ­Institutes, and that this deserves to be investigated by the federal government’s inquiry into freedom of speech in universities ­announced last week.

But if a university dependent on Chinese students tries to curtail the activities of a Confucius Institute, it can expect its international student revenue to be at risk.

Birrell is often regarded as a gadfly in the university sector. And his report picks at particular detail rather than offering a full rundown of the risks.

But in highlighting the risks of dependence on Chinese student revenue, he is in good company. University of Queensland chancellor and former foreign affairs department chief Peter Varghese warned as much in a speech last month.

We live in interesting times.