Dan O'Heirity

How Australian Universities Ended Up in So Much Trouble

Today I shall return to the question of the state of Universities in Australia as a result of the fact that the CCP virus has led to a significant reduction in international student fees for Australian universities. First a confession. Ahead of writing this entry, my understanding of how universities had allowed themselves to become utterly dependent on “cash cow” international students was based on pretty scant research. Roughly speaking, I understood that the Australian government had significantly reduced funding to Australian universities and so these institutes needed to find a way to compensate for the loss in revenue. The main, if not the only strategy, of Australia’s universities was to pursue the international market and, over time, universities allowed themselves to become too reliant on international student fees.

My judgement regarding the international student fee “strategy” was that having lost one revenue stream, Australia’s universities made the mistake of “putting all their eggs in one basket” by becoming reliant on another single revenue stream without thinking about what might happen if the single international revenue stream dried up. I was also of the opinion, substantiated by evidence in previous blog posts, that Australia’s universities had been warned about their heavy reliance on international student fees but the Vice-Chancellors did nothing to diversify their universities income streams and so these institutions find themselves in the situation that they are in today. Now it is time to see whether my rather broad brush stroke understanding of the financial mis-management of Australian Universities stands up to scrutiny.

This story from “The Conversation” provides a history of the way in which Australian Universities became dependent on international student fees. However, before getting to the history, the story reports financial figures that are very similar to figures that I have seen in other reports on the state of the Australian Higher Education sector. Drawing on a government document, “The Conversation” reports that, “International onshore student revenue was, as a share of all universities’ revenue, 26.2% on average in 2018, just shy of A$9 billion. For some universities, the dependency on international students is even greater, at around 30-40%.” Australian Universities are set to lose between AU$3.6-4 billion in revenue from international students in 2020. It is estimated that the sector will lose 21,000 jobs with 7000 of those jobs being in research. This is the stark reality of the state of Australian Universities in May 2020.

The redundancy process has already started and the Vice Chancellor of the university where I work will be making his first announcement in this respect this coming Monday, 23rd May 2020. No one knows exactly what the Vice-Chancellor’s statement will bring but it is fairly safe to say that the Vice Chancellor will not be sacking himself. The same will be true of the Vice Chancellors at Australia’s’ other Universities. Nor will university Chancellor’s be heading out the door. In fact, in the case of my university, the Chancellor has just been re-appointed for another 5 year period despite having overseen a university that has found itself unable to survive without its international student cohort. I am reminded at this point of an adage from business that says that the worst people to get you out of a bad situation are the people who got you into it. Vice Chancellors in the case of universities.

The History of International Students in Australia

The story from “The Conversation” continues by reporting that Senator James Paterson has recently criticised universities for allowing themselves to become over exposed to the international student market and that universities have blamed the reduction in government funding forced them in this direction. I made mention of this view in my introduction but, according to “The Conversation” story, the view that universities over exposed themselves to the international market due to government funding cuts is inherently false. However, having read the story three times, I can’t quite see an argument that would counter this view. The main points that the story makes are that by 1966 private overseas students made up 8.9% of all university enrolments. This is an interesting fact but the article does not explain what the 8.9% of international students meant, at that time, for the revenue streams of universities.

The next point that the report makes is that in 1990 the Australian government introduced full fees for international students because the government perceived that Australian education could become an export industry. Again, this is interesting and is, I suppose, meant to suggest that it was actually the government who opened the door to Australian universities pursuing the international student market. However, once again, no figures are given for the number of international students that came to Australia as a result of this initiative. Nor is a dollar amount put against the income that these students generated for Australian Universities. However, the article does say that, “International student fees at this stage were not a significant source of university income.”

Next the article seems to confirm the position that I offered at the beginning of this journal entry viz. that international students fees became an important source of university revenue from 2000 onwards after a decade of significantly reduced government funding for universities. In this respect the report states that, “Where in 1989 universities derived more than 80% of their operating costs from the public purse, now it is estimated to be less than 40% – a figure well below the OECD average for public investment in tertiary education.” So it would seem, as far as I can tell, that the article is actually making the same argument that I made at the beginning of this blog post. Australia’s universities have become overly dependent on international students because government funding for universities was drastically reduced. The responsibility for this state of affairs lies, as I said earlier, with university Vice Chancellors.

Are Chinese Students Stealing University Research?

International students also make a significant contribution to research as Australian universities as 37% of all post doctoral students in Australia are international students. The notion that international students are important in terms of their contribution to Australian research might hold on one level in that it would be indisputable that some of them are doing important research. However, on another level it would simply be naïve to accept in the case of Chinese students that we are talking about dispassionate researchers working for the greater good of humanity. I have reported on many occasions that there are serious concerns in Australia – expressed by Andrew Hastie Federal Member for Canning and Chair of the Parliamentary Joint Committee on Intelligence and Security – about China’s infiltration of Australian politics and Australian Universities.

I am aware that some of you at this point may be tending towards the notion that my talk of Chinese students stealing research for Beijing is somewhat far fetched. Well, take a look at this story about two Chinese professors in the United States who have been arrested for failing to declare the participation in China’s Communist Party “Thousand Talents Program”.

As is so often the case with China, the innocuous name hides what appears to be a very sinister purpose. The “Thousand Talents Program” was established by the CCP in 2008 to recruit leading international experts in the fields of science, innovation and entrepreneurship. These “experts” work for Universities in China and, according to the news report, the reason China recruits them is so that “the CCP can gain research results”.

As if this fact was not bad enough, the first Chinese professors in this story – Xiao Jiang Li – was sentenced not just for failing to declare his relationship with the Thousand Talents Program but also for tax evasion. A second professor – Simon S. Hang – was arrested for allegedly committing wire fraud which can carry a sentence of 20 years imprisonment. This is just the tip of the iceberg. Since 2019 the U.S. National Institute of Health has been investigating 55 institutions across the United States which has resulted in a number – with the exact number not specified – of Chinese Scholars being charged with participating in the “Thousand Scholars Program” and for leaking research results and scientific information.

The report below covers the same facts about the professors involved in the “Thousand Talents Program” but it has the added bonus of a Chemistry doctorate student at Purdue university stating that the Chinese consulate approached him and other colleagues to take technology back to China. He also says that China has been doing this for decades.

It would be possible to conduct an awful lot more research into the question of China stealing industry and university research with Chinese students being used for this purpose in the university sector. “The Guardian“, for example, reports on the actions of the FBI in trying to counter China’s attempt to steal research from the United States. As of February 2020, the FBI had 1,000 ongoing investigations involving China’s attempted theft of US-based technology. However, I shall leave matters here as the point has been made that there is prima facie reason to be wary of Chinese students researching at Western universities.

Let’s Just Say No To Chinese Students in Australia

Whilst Australian Universities continue to do everything that they can to persuade the government to open its borders to International students at the earliest possible opportunity, Australia’s international students, many of whom are Chinese, are bemoaning the fact that they cannot come back to Australia to study. These Chinese students are undoubtedly facing hardships and uncertainty but we need to remember that China has already threatened Australia that parents may decided that Australia is not such a good country for their children to study if Australia is seen to be unfriendly or even hostile to China. In light of this threat I would say that Australia should keep its borders closed to Chinese students. I know that this will sound somewhat churlish but there is a strategic argument to do with curtailing China’s influence at Australian university campuses.

I have written before about the case of the University of Queensland, where we saw Chinese nationalist students apparently attacking Hong Kong pro-democracy activists. In doing so, these deluded and dangerous Chinese nationalist students followed the tactics of the CCP in using force and violence against students who were standing up to protest against China’s new security legislation for Hong Kong. The nationalist students were subsequently praised for their patriotism by a Chinese diplomat who held an honorary academic role at the University of Queensland. It took the University of Queensland one year to condemn the diplomat’s words as “unacceptable”. The strategic argument here is that violent Chinese nationalism has no place on university campuses in Australia. The University of Queensland should have said, “No” to these Chinese students and they should have been sent packing.

China is bullying Australia in a whole host of ways and Australia needs to stand up for itself otherwise China will view Australia as a country that can be forced into submission. Certainly there would be a significant loss in revenue for Australian universities should Australia decide not to take Chinese students, but Australian universities need to re-think their revenue streams given the Covid-19 revenue disaster. Accepting international students with the exception of Chinese students would bring in international student revenue whilst sending a clear message to China. I don’t hold out any real hope that Australia will stand up to the Chinese because there are some Australian Universities that simply could not survive without their Chinese students. The University of Sydney, for example, generated one fifth of its total income in 2017 from Chinese students with the dollar figure being $500 million.

First Published May 23, 2020

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