January 28, 2021

Are Australia’s universities over-reliant on China?

Federal Parliament’s Parliamentary Joint Committee on Intelligence and Security (PJCIS) is currently conducting an inquiry into national security risks affecting the Australian higher education and research sector. Some submissions to the inquiry focus on the perceived risk of Australia’s international education industry relying too heavily on China.

“[T]here is a need to diversify Australia’s intake of international students, with a focus on students from nations socially, politically and strategically aligned to ours. This will only serve to strengthen Australia’s relationships with its key allies and drive mutually beneficial partnerships.”  
– Cyber Security CRC submission to PJCIS inquiry.

In 2019, 133,000 Chinese international students studied at universities in Australia, making up 13% of all enrolments. In monetary terms, China is the biggest international student market for Australia, representing 31% of its international education ‘exports’ in 2019.
China is undoubtedly an important market for international education. However, IRU analysis shows that many industries considered essential to our economy depend on China at a much higher rate than education – yet do not attract anything like the same level of rhetoric and concern from politicians and other interested commentators.
For example, Australia sells 47% of its minerals and fuels to China including 82% of its iron ore, 36% of its copper and 33% of its natural gas.
Agriculture and fishing industries derive 32% of their income from China.
Many of these sectors, notably mining, service export markets for the bulk of their product.  Universities remain primarily a service for Australians, with international income making up less than 30% of all revenue, and hence China provides under 10% of universities’ revenue.
Why is it, then, that education providers face so much criticism from sections of the Australian community about their reliance on China when other sectors are more reliant? Ironically, the ‘over-reliance on China’ criticism is often levelled at universities by parliamentarians who concurrently celebrate mining and agriculture as an Australian success story, apparently with no such similar concerns about Chinese dominance of Australia’s export market. It is as if the idea of universities as successful organisations providing education and research to the world is a problem for some.
Think-tanks the Institute of Public Affairs (IPA) and the Centre for Independent Studies (CIS) have been outspoken about universities’ reliance on Chinese markets, yet without having voiced the same concerns about the resources sector. Everybody is entitled to an opinion. However, there does seem to be a double-standard in some instances when it comes to views on the higher education sector.
The IRU also argues the value of international students goes beyond revenue to education providers such as universities. International students spend on accommodation, food, travel and entertainment, providing valuable support to a wide range of other industries while they are here. The Australian Government estimates that international education supports at least 250,000 jobs in the broader Australian economy.
Rather than simply shipping a product offshore, international education attracts students from over 150 countries to come here and contribute to Australian society, sharing their cultures, languages and histories with Australians. We gain far more than money as a result.
Additionally, higher education draws its international students from a far more diverse list of countries than other export industries. Several countries in Australia’s top 10 international student markets are not in the top 10 countries for overall exports (e.g. Vietnam, Pakistan and Colombia).
The IRU does not suggest that China is not a big market for Australian education; the numbers are plain for all to see. However, we make the case that politicians and other commentators who wish to criticise this fact would be better targeting other sectors with an even higher concentration on the Chinese market.

Read the full IRU briefing (PDF)