ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Australian universities stung by absence of Chinese students

Billions of dollars at risk as travel ban interrupts return of tens of thousands

The University of Melbourne campus. Thousands of Chinese students have been unable to attend class at schools in Australia because of the government's harsh response to the new coronavirus outbreak. (Photo by Jason Koutsoukis) 

MELBOURNE/PALO ALTO, U.S. -- While her university classmates in Australia get ready for a new semester, Tong Yuwen has found herself in Thailand along with hundreds of Chinese students.

Instead of enjoying a holiday, the students are biding their time there before attempting to enter Australia. The plan is to bypass a travel ban the Australian government issued on Feb. 1, making 100,000 Chinese students ineligible to re-enter the country. Prime Minister Scott Morrison said Thursday he would extend the initial 14-day ban for a further week.

By spending the maximum incubation period for the new coronavirus in a third country, the students hope immigration officers will believe they are virus-free and let them in.

But there are no guarantees. "All of us are trying our luck," said 18-year-old Tong, from Guangzhou, who is due to start a foundation program in Sydney in early March. "I don't understand why the Australian government has to turn us away. We are stuck in the middle."

Tong's frustration is shared by many students expressing disappointment over the Australian government's response to the epidemic. Many are deferring, suspending, or even transferring to universities outside Australia, to places such as Europe.

Analysts expect Australia's higher education sector and economy to take a hit, as Chinese students are a significant revenue source.

Australia's international education sector recorded a fifth year of double-digit growth in the financial year ended November, largely due to Chinese enrollments. Of 754,656 international students, 28% were from mainland China, according to government data. The sector is the country's third-largest export, behind iron ore and coal, generating $37.6 billion last year.

But now 56% of Chinese students are offshore, according to the Australian government, as the Lunar New Year holiday falls within local universities' summer break. This puts up to $3.1 billion in university fees at risk if Chinese students cannot go back in March, according to Standard & Poor's.

"The health crisis underscores the risks that stem from the sector's growing dependence on the lucrative international market," S&P said. But it added universities had buffers to absorb the pain if the outbreak stabilizes by April, otherwise credit profiles in higher education could be dented.

Chinese students generate between 11% to 26% of revenues for eight major universities in Australia, according to University of Sydney sociologist Salvatore Babones.

Babones warned the high concentration of Chinese students could expose those universities to greater financial risks in a research paper published last August.

"The universities' gamble will look like success as long as their bets on the international student market pay off," he wrote, as the schools were able to upgrade research facilities and salaries with increased revenue. "If their bets go sour, taxpayers may be called on to help pick up the tab," he said, describing the Chinese market as "too big to fail."

The coronavirus outbreak may yet trigger such a moment. Universities are trying to reassure Chinese students with measures including delaying the semester's start and offering online classes, and the government is requesting that Beijing relax internet restrictions for these students.

Laurie Pearcey, vice chancellor of the University of New South Wales, used Mandarin to answer questions in a video released Tuesday through the school's WeChat account.

"We'll make sure the quality of learning is not affected," he said. The university advised students in China to defer their studies until June instead of offering online classes.

Up to $3.1 billion in university fees are at risk if Chinese students are prevented from entering Australia for the start of the semester in March, according to Standard & Poor's. (Photo by Jason Koutsoukis)

Vicki Thomson, CEO of The Group of Eight, which represents Australia's leading research-intensive universities, said, "Our universities are absolutely committed to students from China completing their studies with minimal disruption and as soon as possible, while maintaining necessary safety precautions, and those students have been advised of this."

The Department of Education has established call centers offering bilingual mental health counseling. "Our message to students is that you're not alone and the Australian community is here to support you," Education Minister Dan Tehan said on Feb. 7.

But many Chinese students say the measures are not enough to absorb the impact of Australia's travel ban.

Xin Hao, a 21-year-old mechanical engineering student at UNSW from Shanghai, said he might have to delay graduating for a year, as two of his compulsory courses are only available in the first semester. He will also have to pay rent, despite being away for at least four months, costing at least 20,000 Australian dollars ($13,400) for a year's accommodation.

"I am very disappointed in Australia," Xin said, adding that the government has failed to introduce measures quickly to safeguard international students' rights, and information from different departments is unclear.

One example highlighted by students the Nikkei Asian Review spoke to is whether visitors will able to enter Australia after staying outside China for more than 14 days. While the Department of Education has endorsed the plan, the Department of Home Affairs is reluctant, and did not answer Nikkei's inquiry on the matter.

While Xin previously planned to attend graduate school and work there, "I don't think I will stay in Australia anymore," he said.

His disappointment is shared by Ruby Ji, 22, who is supposed to start her first year at UNSW in late February, but is considering transferring to a European school with a friendlier travel policy.

Stuck in Hebei Province, northern China, Ji is furious. "Even the World Health Organization doesn't suggest countries impose travel and trade restrictions on Chinese... [the Australian government] just wouldn't listen."

Chinese students in the U.S. are less affected, however, as the current semester started in January. But industry experts are flagging a challenge for future student recruitment.

"We think the big impact will be next fall," said Terry Hartle, senior vice president of government and public affairs at the American Council on Education, though he believes the short-term impact on revenues would be limited.

"I think the biggest uncertainty about the number of Chinese students [coming to the U.S.], in addition to the length of the pandemic, is whether or not Chinese students feel as welcome in the U.S. as they did a few years ago."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more