Cool heads needed or coronavirus will kill off a vital revenue stream

If Australia doesn’t handle the coronavirus problem carefully, students could go elsewhere.

University of NSW vice-chancellor Ian Jacobs has found a couple of things to be grateful for in the midst of the coronavirus crisis that has kept more than 6000 students in China who should be on his campus for orientation week, which started on Monday.

“In some ways, it’s good to be tested,” he says.

“Not that we would have asked for this, but we will be tested and we will show that we were ­responsible in planning our ­organisation.”

His other reason for gratitude sounds ridiculous, but it’s true. Things could be worse. “As quite a few people that I’ve spoken to about this have said, actually this is not the worst-case scenario. This is likely to be for a fixed time until it is safe to remove the travel restrictions,” Jacobs says.

The coronavirus is not — or not yet anyway — the much-feared Chinese economic collapse that would end once and for all the export boom in energy, minerals and education that has sustained our economy for nearly two decades.

Nor is it the proverbial “China turning off the tap” scenario in which the Chinese government hypothetically puts the squeeze on student numbers coming to Australia to exert economic pressure on Canberra.

But it’s bad enough. And, even though the epidemic will pass, and the 100,000 Chinese students stuck in China will be free to come to Australia at some point, the issue is whether they will want to.

Those who are part of the way through their course are locked in. They need to return because they have already sunk a large investment ($40,000 a year in fees at a Group of Eight university and perhaps $30,000 a year in living costs) into their Australian education.

But what about the others? More than a third of Chinese students who have been accepted into Australian universities this year are just starting their course — mostly a three-year bachelor degree or a two-year master degree.

They can choose to study in a country other than Australia without suffering much loss.

Unless we make extraordinary efforts to keep them here they may do so.

The branch of the federal government that is doing most to offend Chinese students and give them reason to go elsewhere is the Department of Home Affairs. On Sunday last week (as reported in The Australian) its Border Force agents at Australian airports turned away students who had left China before the travel ban was announced, detained students (in some cases for several days) and sent some back to China. The sorry episode was widely covered on Chinese social media.

Today we are reporting that the same department stopped granting student visas to Chinese students from February 1, the day the travel ban was announced by Scott Morrison.

Alarmingly, the students being made to wait for these visas are new students due to begin their courses this year, just the ones who are free to go somewhere else.

The sensible approach would be to shower love on these students. Instead, Home Affairs has decided to suspend the issuing of their visas, leaving them uncertain about whether Australia will accept them. It risks turning a temporary problem for this country into a long-term one.

Perhaps one result of the crisis will be that all parts of the federal government, not just the education and trade ministries, will pay more attention to the critical economic importance of international students.

They are a cohort of at least 800,000 people who pay tuition fees, buy their food and rent their accommodation in Australia. They have an enormous economic impact, being responsible for an estimated 200,000 jobs. The Australian Bureau of Statistics says they spent $40bn in Australia last year. It’s truly massive and its driven by China.

It is right to ask what Australia’s fallback plan is if and when Chinese student numbers fall.

For several years the Go8 universities, which have the lion’s share of Chinese students, have been working intensively to develop markets other than China, particularly India.

They have had some success. India was the second largest ­student source country for the Go8 last year, up from sixth four years ago.

But their Indian student numbers are about a tenth of Chinese numbers. As they have discovered, you can’t build a market that is not yet ripe.

It makes little sense to blame universities for taking so many Chinese students. Just as coal and iron ore producers invested in capacity to feed the China boom, so did universities.

Why would you turn away economically beneficial revenue? It makes sense to nurture the Chinese student market. The hope is that it will not fall precipitately but turns into a sustainable long-term proposition, creating hugely valuable people-to-people ties, as well as lucrative income.

But that depends on everyone handling the coronavirus problem very carefully.