<![CDATA[Over-reliance on Chinese students a 'multibillion-dollar gamble' for Australian universities: report]>

Universities in Australia are taking a "multibillion-dollar gamble" by relying on Chinese students for revenue, a report has said, amid growing concerns that Australian research has been used by Beijing to violate human rights.

Many of the country's top-ranked universities have "extraordinary levels" of exposure to the Chinese market, putting the taxpayer at risk in the event student numbers declined, according to the report by the Centre for Independent Studies, a right-leaning think tank in Sydney.

The report, authored by Salvatore Babones, found that seven "too big to fail" universities had far higher numbers of Chinese students than the international norm, relying on their fees for between 13 and 23 per cent of total revenues.

Chinese enrolments generated A$500 million (US$338 million), or one-fifth of revenue, at the University of Sydney alone in 2017.

Whereas Chinese students made up about 2 per cent and 6 per cent of all students in the United States and Britain, respectively, they accounted for 11 per cent of the student body in Australia, according to the report.

"Australian governments are unlikely to stand by as their local universities go out of business," said the report, which was published on August 20. "Thus, like the CEOs of the big banks in 2008, the vice chancellors of Australia's big universities are, in effect, betting with other people's money."

The universities assessed were the University of Melbourne, Australian National University, University of New South Wales, University of Sydney, University of Technology Sydney, University of Adelaide and University of Queensland.

University leaders have denied that their institutions are on shaky financial ground, and Education Minister Dan Tehan last week told ABC radio that the country's universities "have very good financial positions and are managing their finances incredibly well".

Students at the University of Newcastle. Photo: Facebook alt=Students at the University of Newcastle. Photo: Facebook

In a rare admission from within the sector, University of Newcastle vice-chancellor Alex Zelinsky said on Friday that universities had been forced to rely on international students to "balance the books" due to cuts in federal funding.

Andrew Norton, director of the higher education programme at the left-leaning Grattan Institute in Melbourne, said universities were taking a "calculated risk" with their reliance on Chinese students.

"They know that this growth is unlikely to last forever, but there are large profits to be made in the meantime," Norton said. "International student revenue is only a high risk if universities are building in large recurrent expenditures that cannot easily be reduced. While I have not seen any published risk management strategies, a large proportion of academic staff are on fixed term or casual contracts, so staff costs can be reduced."

Norton said universities should put a priority on raising English-language requirements for incoming students, which would "improve academic standards within universities, and have the incidental effect of moderating student numbers".

Will Kwong, general manager of AAS Education Consultancy in Hong Kong, said Chinese students were drawn to Australia in large numbers because of its highly ranked universities, recognition of China's gaokao entrance exam and pathways to postgraduate work and permanent residency.

"Also, the established Chinese community in Australia makes it easy to adapt " no need to walk out of the comfort zone," Kwong said.

The scrutiny of the tertiary sector's reliance on China comes as universities face fresh questions about their complicity in controversial Chinese government policies such as the mass surveillance and internment of Uygurs in westernmost Xinjiang.

The University of Queensland on Monday announced it would investigate one of its professors, Heng Tao Shen, after the Canberra-based Australian Strategic Policy Institute (ASPI) published a report alleging that an artificial intelligence firm he founded, Koala AI Technology, supplied technology used to monitor Uygurs.

Shen on Monday disputed the report as "totally irresponsible".

"Most information is wrong and it damages my reputation," he said, adding he would seek legal advice.

A model of an aircraft made by China Electronics Technology Group. Photo: SCMP alt=A model of an aircraft made by China Electronics Technology Group. Photo: SCMP

Shen said his company's technology was used for "country borderline intrusion detection to distinguish animals or humans in Xinjiang. It has never been used to [surveil] Uygurs".

Last month, the University of Technology Sydney launched a review of its A$10 million partnership with China Electronics Technology Group, which supplies surveillance technology in Xinjiang, while Curtin University in Perth announced it would re-examine procedures after it emerged that an academic there helped develop AI used to identify Chinese ethnic minorities.

Last week, education authorities in New South Wales removed the Beijing-funded Confucius Institute programme from public schools in the state due to perceptions it "is or could be facilitating inappropriate foreign influence".

The institutes, which provide language and cultural education overseas, have been accused of sanitising Chinese history and society by avoiding sensitive topics such as the Tiananmen Square crackdown and Tibet.

"Receiving high levels of funding from China should not lend itself to universities entering concerning arrangements, but in practice, universities have struggled to manage their engagement with China," said Alex Joske, a researcher at ASPI who wrote the report on Koala AI Technology.

"The reliance on China, combined with poor due diligence work and a lack of guidance from the Australian government, has meant that universities have not sufficiently managed their relationships with China."

But Chen Hong, director of the Australian Studies Centre at the East China Normal University in Shanghai, said it was "economically suicidal" for Australia to raise concerns about the number of Chinese students.

"It stems from the invidious China threat theory, which now has spilled over from political conspiracy to international education," Chen said. "It will only boomerang to cause damage to Australia's economic prosperity, social dynamism and cultural diversity."

Chen added that the decision of New South Wales to cut ties with the Confucius Institute programme was "damaging to the image of the multicultural and open society which Australia is proud of, and which students from China find appealing".

Nicholas Thomas, an associate professor of Asian studies at City University of Hong Kong, said the move was "inevitable" given the political atmosphere in Australia with regard to Chinese influence.

"That said, it was always an unusual partnership for the state government to form, given that most Confucius Institute partnerships are directly with educational service providers," Thomas said.

"As such, it is hard to see that this particular partnership could ever have had the potential for longevity. Perhaps because of its unique nature, I don't see the closure of this Confucius Institute as having a significant impact on bilateral ties " although, given the prevailing political climate, it may be rhetorically raised has having done so."

Qian Gong, a China studies professor at Curtin University in Perth, said the growing scrutiny of the education sector was a sign of Australia's "more prudent" stance toward China " but would likely strain relations between the sides.

"Australia is probably seen by the Chinese public as toeing the US line too closely," she said.

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This article originally appeared on the South China Morning Post (SCMP).

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