ASIAASIA TASKFORCE TASKFORCE DISCUSSION INTERIM PAPER REPORT No. 04 NOVEMBER 2020

AUSTRALIAN UNIVERSITIES, INTERNATIONAL STUDENTS AND CHINA

Taking Stock and Taking the High Road

Asia Taskforce is an initiative of Knowledge partners BACKGROUND

This Discussion Paper has been prepared as part of a series of Key points: short reports on specific topics identified by the Asia Taskforce • While there is a demonstrable downside to the university sector’s (Taskforce) – an initiative of the high exposure to the international market in general and to China Business Council of Australia and in particular, the proposition the Australia’s public universities Asia Society Australia together should retreat from the international education market, China with knowledge partners PwC included, and focus wholly or largely on servicing the learning Australia and the University of needs of domestic students is based on a false binary. In the Sydney Business School - to absence of a major increase in real direct government funding supplement the findings and per student, a retreat to educational nationalism would consign recommendations contained the sector to a future of shrinkage, low horizons, reputational in the Interim Report and final decline, infrastructure decay, research mediocrity and minimal report (due out in late 2020). services for local students themselves. • The sector’s critics ask the wrong question, fail to apply root One of the objectives of the cause analysis and proffer solutions that are simplistic and ill- Taskforce was to identify conceived. The key is not whether our public universities should issues critical to business be providers of international education. They should. We must success in Asia. Education now address how the sector can best reposition itself to improve is Australia’s third biggest its international education activities for success, at home and export category. This Discussion abroad, in a post-COVID world. Paper examines the Australian university sector’s involvement • Both the sector and government should embrace the ‘high road’ in international coursework and work in partnership to reposition the sector so that, over the education and, in particular, the course of this decade, our universities can rebuild global brand sector’s educational engagement and reputation, recover their international student numbers, with China, exclusive of reprofile the international student cohort both to improve the academic research engagement. academic merit of students from China and to rebalance the overall load progressively to grow the number of students from target diversity markets.

Taking Stock and Taking the High Road | 2 EXECUTIVE SUMMARY

COVID-19 has propelled The paper offers an assessment of Australia’s public the sector’s degree of exposure to the international and Chinese ...the“ question should universities, Australia’s markets, weighs up the evidence third largest export and arguments against and for a not be whether this earner, into an existential continuation of this engagement engagement should and proposes that the question crisis and highlighted the continue but, rather, sector’s longstanding should not be whether this engagement should continue how the sector should strategic and structural but, rather, how the sector weaknesses as an should reposition itself to (i) reposition itself...” international education diversify the international student provider. This discussion cohort overall, (ii) capture an paper examines the academically superior segment The paper juxtaposes the Australian university of the Chinese market and (iii) ‘low road’ (domestic reversion) capitalise most effectively on and ‘high road’ (international sector’s involvement in trends that are already beginning repositioning) options, puts the international coursework to reshape the landscape on case for the latter and offers education and, in particular, international education – from five key recommendations for the sector’s educational the transformation of China’s own ‘high road’ action by the sector engagement with China, higher education sector to the rise and a further five for action of digital learning. by government. exclusive of academic research engagement. The choice now confronting the sector is stark: absent a major change in domestic student per capita funding, it can either fall back on current domestic funding levels and be content to be small, research light and offer limited services to domestic students, or it can seek to take in higher calibre international students at scale and cross subsidise both the domestic student experience and academic research.

Taking Stock and Taking the High Road | 3 CHAPTER 1 OVEREXPOSED?

As well as disrupting Viral Exposé university qualifying for emergency every aspect of university financial support in the form of COVID-19 has hit Australia’s 37 the JobKeeper wage subsidy. life, learning and work at public universities particularly Government support for the tens virtually every university hard. With the inflow of of thousands of international campus world-wide, international students cut students who were onshore at the current pandemic dramatically, campuses are the time of the initial shutdown has also clearly exposed mothballed, and teaching has has been negligible. Rather, the switched abruptly to on-line only signalling from Canberra in the one of the Australian mode. The business model that early months of the pandemic was higher education sector’s has underwritten the sector’s that those on international student deepest vulnerabilities: expansion for more than two visas were no longer welcome here its heavy reliance on fee decades – a model that relied (Doherty, 2020). increasingly on the inflow of revenue from international full-fee-paying international The consequences for students students; a reliance that coursework students – has been and the sector are dire. Tens of is more extreme than disrupted, perhaps irretrievably, thousands of these students were is the case in any major and perhaps entirely appropriately stranded by the lockdown; those competitor country in the according to some critics within onshore were among the first and beyond the sector. The to lose the casual jobs on which international education losses incurred this calendar many of them depended to pay market. That now demands year due to the steep fall in their degree fees and cover living open and honest reflection international student numbers costs in the high-cost capitals of plus a major policy is forecast to be in the range of Sydney and Melbourne, where the rethink on the part of the $3 billion to $4.6 billion (Horne, bulk of international students are 2020), with concerns expressed concentrated. For those caught universities themselves regarding the financial viability of offshore, government plans to and government. some institutions. establish safe corridors to enable their re-entry to Australia have According to the National Tertiary so far come to nothing. Reports Education Union, over 12,000 staff, indicate that international chiefly casual and contract staff, students feel abandoned by the have already lost their jobs (Duffy Government, ignored by their and Sas, 2020), with predictions universities and ostracised by of total job losses ranging up to Australian society (Doherty, 2020; 21,000, including some 7,000 Lehmann, 2020). research-related positions alone – or more than 10% of the sector’s On any reasonable estimate, then, entire workforce (Horne, 2020). the country’s university sector is in Even the asset-rich Group of Eight an unprecedented crisis – and its institutions have been forced to reputation as a prominent provider impose strict austerity measures of international education is under and institute staff redundancy serious threat. The sector’s critics, rounds. So far, government though, argue that this is a crisis support for the sector has been that is self-made and long in muted, with no public sector the making.

Taking Stock and Taking the High Road | 4 Insider Predictions of a These elite institutions, he language capability and insufficient Cataclysm in the Making suggests, have pursued revenue savings to succeed as permanent from international students in residents. Revealingly, though, Last year, many months prior order to fund expenditure on Birrell also predicts that, despite to COVID-19, two high profile research, lavish buildings, IT their historically lower load of academics with Group of Eight infrastructure and executive onshore internationals, for non- affiliations, Salvatore Babones, a salaries, primarily to underwrite Group of Eight campuses ‘the Sydney University sociologist, and the sector’s continued success in decline in government funding (in Bob Birrell, ex-Monash University the global rankings arms race. real terms) for domestic students social demographer, each sounded over recent years’ would put the alarm regarding the sector’s Babones expresses concern about pressure on these institutions to heavy reliance on foreign students, the financial vulnerability and expand their international intake with both suggesting that the moral hazard arising from the (2019, p.21). sector would only have itself to high Chinese student presence. blame should the international Birrell (2019) mounts an equally While no thorough consideration inflow suddenly fall. While passionate if somewhat more of the sector’s post-pandemic Babones referred in passing to the measured critique. He avoids prospects and options can possible consequences of a global singling out the Chinese presence afford to ignore these seemingly pandemic (Barbones, 2019, p.12), for special mention and seeks prophetic observations, it does neither can be expected to have to locate his observations in a not necessarily follow that the known in advance that it would be wider policy context, contending sector should seek to permanently COVID-19 that would precipitate that liberal immigration policies downscale or abandon its the sector’s current crisis. and reductions in real funding involvement in international Nonetheless, their predictions by governments are also partly education. To do so would be to of the possible consequences responsible for the sector’s embrace a false dichotomy. What of the sector’s heavy reliance reliance on international fee the sector does now have to do is on international students have income. Birrell’s bête noire is what to review, reposition, upgrade and seemingly come to pass and their he comes close to characterising diversify this involvement. documentation and analyses of the as the foreign student immigration underlying vulnerabilities warrant racket. The ‘slippery slope’, he acknowledgement and attention. argues, began in 2002 when the What is open to questions are Howard Government, aided and their attributions of responsibility abetted by the universities, first and their implications regarding allowed overseas students to appropriate solutions. Arguably, apply for permanent residence on these critics err in attributing completion of their studies. blame solely to the sector itself and According to Birrell, the stream neither offers viable or practical become a torrent with the solutions to the problem identified. advent of the post study work Both prominent pre-COVID critics visa (485 visa) in line with the argue that the high international recommendations made in 2011 by intake over the past two decades the Student Visa Program Review has been accompanied by an (the Knight Review) commissioned erosion of admission standards, by the Gillard Government. To teaching quality and the overall facilitate the flow, says Birrell, student and staff experience. the universities abrogated their Babones (2019) places the blame newly conferred responsibilities squarely at the feet of the sector’s for managing the international leadership, and particularly the student presence by reducing Group of Eight. admission standards and admitting students with insufficient English

Taking Stock and Taking the High Road | 5 The International Student Presence There is no doubt that the sector After plateauing between 2011 has, especially over the past 15 and 2013, revenue from this years, developed something of source surged between 2014 and an addiction to international fee 2019. Income from international revenue. As shown in the following onshore student revenue averaged table data, in the decade to 2017, 26.2% of all university revenue total university revenue from in 2018, with some universities overseas students rose from deriving up to 40% of their income $2.9 billion (or 15.5% of total from international students revenue) to $7.5 billion (or 23,3% (Horne, 2020). of total revenue).

Table 1 Australian University Revenue from Fee Paying Overseas Students, 2008–2017

Revenue from Percentage Total revenue Change fee paying Change of revenue from all from overseas from from fee operations previous students previous paying OS ($’000) year ($’000) year students

2008 $18,955,909 $2,946,127 15.5%

2009 $20,468,862 8.0% $3,414,687 15.9% 16.7%

2010 $22,158,466 8.3% $3,881,656 13.7% 17.5%

2011 $23,658,742 6.8% $4,124,064 6.2% 17.4%

2012 $25,210,033 6.6% $4,134,768 0.3% 16.4%

2013 $26,332,964 4.5% $4,290,808 3.8% 16.3%

2014 $27,751,858 5.4% $4,741,973 10.5% 17.1%

2015 $28,609,979 3.1% $5,349,879 12.8% 18.7%

2016 $30,147,079 5.4% $6,249,049 16.8% 20.7%

2017 $32,028,091 6.2% $7,457,002 19.3% 23.3%

Source: Ferguson and Sherrell (2019)

Taking Stock and Taking the High Road | 6 The decade to 2018 witnessed the sector. In 2018, the ratio of proportion – 48.1% – and with the a doubling in the number of onshore international students sector-wide average being 21.9%. international students enrolled to total students at public The University of Sydney had the at Australian universities – from universities ranged from a low highest level amongst the Group 200,000 to 430,000 – with of 4.2% at the University of New of Eight (38.2%) followed closely around one in three foreign England to highs of 44.7% at by ANU (37.0%) (Department of students being Chinese nationals Torrens University and 42.4% Education, 2019a). (Maslen, 2019). As indicated in at Federation University, with Table 2 below, these aggregates privately-owned Bond University mask significant variation across having the sector’s highest

Table 2 Onshore International Students as a Proportion of All Students, by University, 2018

Onshore % Onshore University State International Domestic Total International

Bond University QLD 3,038 2,966 6,312 48.10% Torrens University Australia SA 5,983 7,297 13,377 44.70% Federation University VIC 7,458 8,653 17,593 42.40% University of Sydney NSW 25,532 40,797 66,839 38.20% Australian National University ACT 9,782 15,852 26,448 37.00% University of Queensland QLD 17,865 35,622 53,696 33.30% University of Melbourne VIC 21,858 41,568 68,174 32.10% Monash University VIC 25,690 45,224 83,560 30.70% CQUniversity QLD 7,483 17,554 25,059 29.90% University of Technology Sydney NSW 13,672 30,763 46,036 29.70% University of Adelaide SA 7,587 19,114 26,954 28.10% University of New South Wales NSW 15,741 39,359 62,507 25.20% RMIT University VIC 16,667 37,751 69,282 24.10% Deakin University VIC 13,044 45,134 59,460 21.90% University of Wollongong NSW 7,411 19,237 34,333 21.60% Macquarie University NSW 9,414 32,815 44,545 21.10% La Trobe University VIC 8,160 29,397 39,231 20.80% Charles Sturt University NSW 8,920 32,588 43,388 20.60% University of the Sunshine Coast QLD 3,620 13,562 17,603 20.60% Southern Cross University NSW 3,818 13,683 18,614 20.50% Victoria University VIC 5,324 16,145 27,204 19.60% Edith Cowan University WA 5,176 23,843 29,853 17.30%

Taking Stock and Taking the High Road | 7 Onshore % Onshore University State International Domestic Total International

Queensland U of Technology QLD 8,594 41,845 50,790 16.90% University of South Australia SA 5,440 27,236 32,955 16.50% University of Tasmania TAS 5,963 28,872 36,194 16.50% Charles Darwin University NT 1,876 9,417 11,389 16.50% University of Western Australia WA 3,953 19,071 24,469 16.20% University of Canberra ACT 2,601 13,143 16,528 15.70% James Cook University QLD 3,125 14,624 20,728 15.10% Swinburne U of Technology VIC 5,740 31,923 42,354 13.60% Griffith University QLD 6,336 39,437 47,987 13.20% University of Newcastle NSW 4,450 29,028 34,853 12.80% Multi- Australian Catholic University 4,172 29,581 34,031 12.30% State Flinders University SA 3,150 20,491 25,802 12.20% Western Sydney University NSW 5,608 41,256 48,415 11.60% Curtin University WA 5,443 35,496 48,659 11.20% Murdoch University WA 2,216 15,013 24,094 9.20% University of Southern Queensland QLD 2,268 22,754 25,600 8.90% University of Divinity VIC 133 1,448 1,599 8.30% University of New England NSW 989 21,915 23,387 4.20% University of Notre Dame Australia WA 222 11,474 11,712 1.90%

2018 Total 315,522 1,022,948 1,441,614 21.90%

Source: Department of Education (2019a)

These onshore figures need to Asia (most notably Singapore) followed by Victoria University be set against the fact that a and the UAE and serve either as (with around 33%) (Babones, number of universities also operate stand-alone operations, feeders 2018). As such, international offshore campuses, including for the Australian parent, or both. market exposure offshore is also one Group of Eight institution Taking these offshore campuses a risk for a number of non-Group (Monash) and six non-Group into account, the institutions with of Eight institutions (although it is of Eights (Curtin, James Cook, the highest overall proportions of instructive the Babones prefers to Newcastle, Wollongong, RMIT and international students are RMIT, emphasise that these operations Swinburne). These satellites are Wollongong, and Monash (each serve to mitigate the China risk, located primarily in South East with over 40% international), per se).

Taking Stock and Taking the High Road | 8 A further salient aspect of the the balance was marginally male- South Africa, Vietnam and China. sector’s international student skewed (51.7%). These data are While Larkins (2018) attributes profile is the cohort’s remarkably reproduced in Table 3, below. this skewing to cultural factors, varied gender distribution by The countries with the most it is possible that there are other country of origin. Using data for pronounced male bias were drivers that warrant further 2016, Larkins (2018) reports that those from the Middle East and investigation regarding future the gender balance amongst the Indian subcontinent. Those diversification possibilities and domestic students favoured with the most marked female marketing strategies. women (58%) over men, whereas bias were The Philippines, the among onshore internationals United States, Taiwan, Thailand,

Table 3 Gender Distribution for Nationalities with more than 2000 Students in Australian

Nationality of Birth 2016 Males Females Total % Females Pakistan 7,757 862 8,619 10.0% Saudi Arabia 3,517 971 4,488 21.6% Bangladesh 3,566 1,234 4,800 25.7% India 27,878 13,669 41,547 32.9% Sri Lanka 4,503 2,854 7,357 38.8% Nepal 8,234 5,530 13,764 40.2% Iran 1,304 1,033 2,337 44.2% Hong Kong 6,462 5,221 11,683 44.7% Korea, Republic of (South) 2,884 2,661 5,545 48.0% Indonesia 5,908 5,834 11,742 49.7% Brazil 1,104 1,098 2,202 49.9% Malaysia 14,761 15,234 29,995 50.8% Mauritius 1,145 1,236 2,381 51.9% Germany 1,278 1,404 2,682 52.3% Japan 1,017 1,134 2,151 52.7% Canada 1,351 1,565 2,916 53.7% Singapore 11,492 13,792 25,284 54.5% China 55,407 67,996 123,403 55.1% Vietnam 8,702 10,784 19,486 55.3% South Africa 1,023 1,278 2,301 55.5% Thailand 1,103 1,497 2,600 57.6% Taiwan 1,049 1,454 2,503 58.1% United States of America 2,549 4,177 6,726 62.1% Philippines 1,438 3,064 4,502 68.1% Total 24 Countries 175,432 165,582 341,014 48.6%

Source: Larkins (2018), pp.8-9.

Taking Stock and Taking the High Road | 9 The International Fee Universities Australia has argued Revenue Imperative that the growing reliance on international student fees is a This“ dynamic has also There are two critical questions direct consequence of constraints in all of this: first why has this on government funding for served to create a public reliance on international students, the sector since the 1990s university sector that is particularly those from China, (Universities Australia, 2017). occurred?; and second what, if Sector spokespersons have neither fish nor fowl. Our anything, can and should now be observed that since the Dawkins universities are publicly done to remedy the situation? reforms of the late 1980s, the proportion of university income owned and regulated Babones (2019) senses two deadly coming directly from government but reliant increasingly institutional sins at work: greed has been in decline – from around and pride. The sector, he argues, 80% to less than 40% (Horne, on private fee income pursued international fee income 2020). According to Horne generation and aggressive to fund rankings-relevant research (2020): ‘international student prowess and opulent buildings to fees have become an unofficial marketing to cover the attract still more Chinese fee- part of the funding policy of long-term decline in direct payers. Birrell’s (2019) central consecutive federal governments’. allegation has a somewhat The sector peak body notes that government funding.” different focus. According to real growth in government funding him, the university sector – and, per student grew by less than 1% again, the Group of Eight in each year between 2009 and 2015 particular – consciously excluded Rather less prominent in the (Universities Australia, 2017), and sector leadership narrative is the Commonwealth-supported has effectively flatlined since 2018. domestic students during the cycle of payroll cost increases Government capital grants to arising from the sector’s still highly demand-driven era (2012-17) in universities were cut by more than order to reap the higher returns unionised industrial relations a billion dollars between 2009 and system. The institutionalisation afforded by international full fee- 2017 (Universities Australia, 2017). payers. of pattern-bargained annual Research funding has also pay increases under triennial As noted above, Birrell also alleges atrophied – at least until now. enterprise bargaining rounds that the sector has been complicit OECD data suggests that in and the generous provisions in promoting degree studies as an the two decades from 1995 for paid leave and employer avenue to permanent residency, Australia slipped from sixth place superannuation contributions something which he argues has to second-last amongst the 25 (17.5%), have amplified the profoundly negative consequences OECD countries in terms of public pressure to grow revenue – from bias (presumably both investment in higher education from full-fee payers, including occupational and racial bias) in the as a share of GDP – from 1.2% to international undergraduates and migrant intake, urban congestion just 0.74% (PwC, 2016). While both international and domestic and sprawl and skyrocketing the recently announced $1 billion postgraduates, to cover payroll rental and housing costs, to labour in research support under the costs, operating costs and market overcrowding and the delayed 2020-21 federal budget capital expenditure as well as to crowding out of locals from both has been welcomed by sector compensate for the flatlining of professional and low-skilled jobs. leaders, it must still be set against real direct government funding. Unsurprisingly, the sector’s the backdrop of the decade- long leaders and its peak body, slide in tied research and Universities Australia, have begged infrastructure funding. to differ.

Taking Stock and Taking the High Road | 10 This spiral of escalating costs Further, since government The undoubted price leaders in the and the quest for international funding falls well short of the real Australian sector are the Group fee revenue has taken on a life of cost of course delivery, in the of Eight and these institutions its own, with the Group of Eight absence of significant income have embraced a fee-setting institutions, in particular, seeking from international students, the regime to match the high demand to outbid each other in spending net effect of a permanent fall in from China; a demand that is on campus infrastructure to international fee revenue would demonstrably price inelastic and further increase their appeal to the be long-term impoverishment which, whether rightly or wrongly, international student market. of our public universities. Any interprets premium pricing as rebalancing of numbers in favour a signal of provider quality. It is This dynamic has also served to of local students must involve a especially noteworthy that the create a public university sector reconsideration of per student heaviest concentrations of Chinese that is neither fish nor fowl. Our Commonwealth funding and students are in the Group of universities are publicly owned and not simply a redistribution of Eight institutions (Babones, 2019; regulated but reliant increasingly funding between degrees or an Maslen, 2019). In short, as Babones on private fee income generation overall increase in the number suggests, the China exposure is a and aggressive marketing to of Commonwealth Supported problem that is most pronounced cover the long-term decline in Places. As Birrell (2019) is at at the sector’s top-end. direct government funding. As least prepared to acknowledge, noted above, in terms of the the underlying fact is that in the proportion of public spending face of near-zero growth in real on tertiary education, the OECD direct public funding, Australia’s ranks Australia at the lower end public universities have had little of global scale and 40% below the choice but to rely increasingly on OECD average. private revenue generation from Sharrock (2018) disputes international fee-payers. this, contending that, rather Other considerations have also than declining in aggregate been in play here. While fees for terms, government funding has domestic students are closely switched from direct grants to regulated, with undergraduate indirect funding via support for domestic numbers also capped domestic students in the form of for most of the past two decades Commonwealth Supported Places (except 2012-17), universities and the Higher Education Loan are free to set fees for all Program, such that the level of internationals (and most domestic total funding by government has postgraduates) at whatever level substantially outstripped that in they believe the market will bear. other OECD countries over the last decade. However, such a The fee levels set by Australian contention underplays the fact that universities for international fee support for domestic students students are among the highest is loan-based, cost-recoverable in the OECD, with only the US, and essentially a private benefit. Canada and possibly the UK A dollar of taxpayer funds outlaid (which does not report fee data in this way cannot be deemed to the OECD) charging more equivalent to a dollar of direct (Department of Education (2019c). taxpayer subsidisation of public university operating and capital expenses.

Taking Stock and Taking the High Road | 11 CHAPTER 2 INTERNATIONAL STUDENTS: WEIGHING RISKS AND RETURNS

Babones (2019) and Birrell An Excess of International Babones (2019, p.18) asserts (2019; Maslen, 2019) Students? that universities should reduce the proportion of international appear to be suggesting The first proposition is informed students generally, and Chinese that the sector – and by an ethic that sees the role of students specifically, to ‘a particularly the Group the tax-payer funded university manageable level’. But what does of Eight – has a twofold as being, first and foremost, to this mean? What is the inflection international student educate domestic students and point for manageability – 5%, 10%, develop human and social capital 20%, 30% international? Taking ‘problem’: first, too many to benefit the nation’s economy his marker from the University international students in and society. The logical corollary is of Illinois, which has reportedly general; second, too many that the international proportion insured itself against a slump international students of the student cohort should be in Chinese numbers, Babones who happen to be from much lower than the domestic (2019, p,19) recommends that proportion – and certainly far our universities should limit the China. It is worth pausing lower than is currently the case in revenue they draw from any one briefly to sift through the Group of Eight and some other country to less than 5% and insure these contentions – and institutions (see Table 2 above). themselves against ‘any foreign the solutions offered – or Those international students country revenue concentrations at least implied – by those who are admitted to the learning above 2.5%’. Based on Babones’ community, so the argument goes, own contention that countries in who put them forward – in should be afforded an opportunity the region other than China are too order to distinguish more to immerse themselves in poor to provide alternative flows of clearly between the positive Australian culture and society students, such a recommendation and normative aspects as evidently embodied by their must lead inevitably to institutional and to compare the way domestic peers. and sectoral shrinkage. they frame the ‘problem’ On one reading, though, such Moreover, those proposing a with the way in which they prescriptions both border on the reversion to a domestic focus have proffer solutions. xenophobic, overlook the fact little to say about the question of that both Australian society and appropriate sectoral scale and the domestic student cohort are scope. Should the sector seek now anything but monocultural, to compensate for the loss of and ignore the fact that, even international fee revenue by taking allowing for the provision of in more domestic students, or indirect funding, the bulk of direct should it simply contract? If the university funding no longer comes former, where is the vast untapped from the tax-payer. reserve of amply qualified local students? Should domestic admission standards be reduced to generate additional demand?

Taking Stock and Taking the High Road | 12 There are some early indications An Excess of Chinese Chinese students constitute by far that the current crisis may result Students? the largest share of these students, in an uptick in domestic student with China last year contributing demand for degree studies. But The second proposition, which is 37.3% of international higher experience of other recent global routinely conflated with the first, education enrolments, followed crises (2000-2 and 2008-11) also is arguably of greater moment by India which contributed 20.5% tells us that this is likely to be no in that such a heavy reliance on (Department of Education, Skills more than a temporary recession- one country as the main source of and Employment, 2020a). Of the induced blip. Likewise, if sectoral international students does involve Group of Eight universities, seven shrinkage is to occur, which financial, cultural and reputational reportedly have international universities/faculties/disciplines dangers. cohorts in which Chinese students should stay, which should go? If, comprise at least 50% of the total, as seems to be the case under To Babones (2019), the core with proportions in business/ the current ‘Job Ready Graduates’ problem has been clear and management faculties typically legislation, Canberra wishes to present on his own campus – an being higher still. Babones (2019) direct domestic students into excess of students from one notes that at the University of STEM and Health and Medical country: China. He suggests Sydney, Chinese coursework bachelor’s programs does this that the high exposure of Group students alone generated revenue mean that universities should of Eight institutions – and their exceeding $500 million in 2017. drop offerings in the humanities, business schools in particular – to business and law – or does it the Chinese student market poses Australia, of course, is not alone mean that domestic numbers in a serious and unsustainable risk. in hosting a large number of these now high fee fields should In the context of wider concerns Chinese students. In 2017, over somehow be increased (e.g. by regarding the potential military 600,000 students departed China reducing ATAR requirements) and security implications of to undertake education at various to cross-subsidise the low fee research collaboration between levels, with over 1.5 million Chinese programs that the government Australian and Chinese academics, students undertaking higher wishes to see prioritised? Either the claim that our universities are education abroad at any one way, absent wider changes to over-exposed to China certainly time, and Anglophone countries funding arrangements in the gives pause for thought. – the US, UK, Canada, Australian sector, any significant decline and New Zealand – being their That our leading universities preferred destination (Sinorbis, in international revenue will have come to rely heavily on inevitably impact the sector’s 2017). The higher education fee income from students sectors in all these countries size, shape and capacity to service from China is beyond dispute. domestic demand. are heavily reliant on demand In 2019, there were 442,000 from China. In New Zealand international student enrolments in 2017, just under 50% of all in Australia’s higher education international students (including sector (predominantly in both university and non- university public universities), including students) were Chinese, in Canada approximately 160,000 (36.2%) 42%, in Australia just under 35%, from China (Department of in the USA 32% and in the UK Education, Skills and Employment, (favoured by EU students) 19% 1 2020a; Hinton, 2020). The sector (Sinorbis, 2018). has a higher proportion of international students than counterparts in any other country, with international students last year comprising almost a third of all higher education students.

Taking Stock and Taking the High Road | 13 Focusing on the proportions in Arguably, though, the more None of this is to suggest that we Australia’s public universities, compelling reasons for rethinking should abandon our educational Babones (2018, p.9) remarks the sector’s over-exposure to the engagement with China; nor that that seven of the Group of Eight Chinese market are those relating students from China are somehow institutions ‘appear to be more to long term trends. While these less worthy academically than dependent on fee-paying Chinese will be considered in more detail those from other backgrounds. students than just about any below, the critical considerations What it does suggest is that the other universities in the English- here are twofold: first, population sector – and particularly the speaking world’. The business ageing in China and the relative Group of Eight – has a pressing faculties in these institutions decline in the proportion of its need to revise and revitalise this have an exceptionally high level of population of university age; and, engagement. internationals (upwards of two- second, the fact that China is thirds in the case of Melbourne currently undergoing a process of Also, rather than simply and Sydney) and an extremely systematic ‘import replacement’ lamenting the sector’s reliance high concentration of students in higher education driven by a on international/Chinese students from China, particularly at remarkable expansion of domestic and falling back on naïve and postgraduate level. university capacity and Beijing’s highly normative binary logic growing aversion to western (‘domestic good; international The Australian sector’s heavy cultural influence in the education bad’) we need to consider dependence on Chinese of its citizenry. constructive policy solutions that students makes it vulnerable to will enable the sector to recalibrate a combination of exogeneous Turning to problems of a its international focus without influences, some of which are pedagogical nature, as Borbones losing site of the benefits that immediate in nature while others and Birrell both imply, the heavy accrue to the sector, domestic are likely to impact the sector over presence of Chinese students students, Australian society and the longer term. As to immediate in business and engineering local and national economies risks, in addition to the rapidly faculties has placed enormous from having universities that are growing risks of conflict in the strain on educators. There is also genuinely global in reputation South China Sea, a tit-for-tat anecdotal evidence that this over- and reach. At the same time, as Cold War 2.0 over trade and concentration on China has caused international students themselves national security (with Beijing a flight of domestic students. have consistently indicated now having targeted Australian (Lehmann, 2020; Lawson, 2012), exports of barley, wine, coal Far from serving to diversity the there is clearly considerable scope and, most recently, cotton), and student cohort, the dependence for universities themselves to Beijing’s penchant for currency on Chinese students has improve the international student manipulation, we can now add instituted a form of classroom experience both within and beyond the profound disruption to daily monoculturalism in which the learning space. life, campus life and global travel encouraging students to embrace caused by the current pandemic. the values of academic integrity It is also the case that Beijing and free debate, and facilitating could, at any time, sever the the development of core flow of students and funds for capabilities in critical thinking, fee payment to any country that effective English communication has fallen from favour simply by and cross-cultural competence, withholding exit permits or by have become increasingly difficult. tightening currency controls.

Taking Stock and Taking the High Road | 14 Benefits of the Most take up the opportunity, International/Chinese permitted under student visa provisions, to combine study and They“ are our offshore Student Presence paid employment and while there ambassadors and On the flip side, there are is, unfortunately, considerable enormous benefits arising from the evidence of exploitation by advocates. Many have unscrupulous employers (Karp, sector’s longstanding involvement a deep loyalty to their in international education. The 2016), as workers international economic benefits are well students are an important source university and take pride documented (e.g. Deloitte Access of linguistically and technically Economics, 2015). In 2019, the skilled labour, something in their association with export income from international enlightened employers, both their adopted country – education activity in Australia was local and multinational, have over $37.6 billion, including some come to realise in their graduate Australia. Those in senior $31 billion from higher education hiring programs. And, of course, roles – of whom there are (Department of Education, 2019b). these students also make rich Education is Australia’s largest contribution to campus life. now many – are willing service-based export and the What is often overlooked by to provide in-program country’s third largest export critics of the international student earner overall (Deloitte Access placement opportunities presence are the cultural benefits Economics, 2015; PwC, 2016). that this confers. Notwithstanding for current students and The university sector generates the occasional outbursts of anti- job opportunities for new over 160,000 fulltime equivalent Asian racism, most Australians jobs, with many of these appear to welcome and appreciate graduates, as well as dependent on the international the international student presence. supporting our student student presence (Deloitte Access They widen our cultural horizons Economics, 2015; Chevrolle, and our culinary tastes, affirm recruitment and corporate 2020). Demand from China has the values of multiculturalism engagement activities. ” been the main engine of growth and enrich campus life. Nor here at least in the research- should we forget the cultural intensive institutions. Sinorbis benefits to domestic students loyalty to their university and take (2018) estimates that of the $32 of the international student pride in their association with billion generated for the Australian presence, particularly given that their adopted country – Australia. economy in 2018, around $10 Asia has been, and will continue Those in senior roles – of whom billion came from students to be, a major work destination there are now many – are willing from China. While Babones for many local graduates. At the to provide in-program placement (2019) disputes the legitimacy same time, it is the case that our opportunities for current students of including students’ onshore universities can do much more and job opportunities for new non-fee expenditure in these within and beyond the classroom graduates, as well as supporting estimates of export contribution, to encourage domestic students our student recruitment and it is undeniably the case that to capitalise on this opportunity to corporate engagement activities. international students make a deepen their cultural competence. major economic contribution at Then there are the many benefits local level via their expenditure that flow from the fact that on accommodation, food, leisure Australian universities have and entertainment. hundreds of thousands of alumni worldwide, including some 200,000 in China alone. They are our offshore ambassadors and advocates. Many have a deep

Taking Stock and Taking the High Road | 15 As emphasised in the Asia Asking the Right Question; Taskforce Discussion Paper No. 03 Solving the Right Problem A Forgotten Advantage: Enabling ...the“ prospect of retreating Australia’s Asian Australian and While there is an undoubted Diaspora Communities, the global to ‘fortress Australia’ is downside to the sector’s high alumni network is both a powerful unrealistic, unappealing exposure to the international and, arguably, an underutilised market in general and to China resource for both the sector and and a denial of the very in particular, the prospect of the country. And these positives real economic, social, retreating to ‘fortress Australia’ apply no less to our Chinese is unrealistic, unappealing and a students and alumni than to those cultural and strategic denial of the very real economic, from elsewhere. Indeed, our benefits arising from the social, cultural and strategic Chinese alumni are particularly benefits arising from the sector’s well organised and active sector’s long involvement long involvement and experience (ACAA website). and experience in in international education. The critics ask the wrong question. With Australia set to experience international education..” The key is not whether our public its first year of negative net universities should be providers migration since World War Two, of international education. They it is also timely to reflect on should. We must now address how He contests the Universities the contribution that both our the sector can best reposition Australian claim that only around universities and our international itself to improve its international 15% of foreign students choose to graduates have made to Australia’s education activities for success, remain in Australian after studies, migration program over many at home and abroad, in a but his own data shows that the years. Over the past 20 years, 44% post‑COVID world. of Australia’s migrants have begun proportions taking up permanent their journey as international residency in recent years was It is vital that Australian legislators students. A significant minority of only marginally higher than this: and regulators do more to our universities’ young overseas 21.2% in 2016-17 and 17.9% in support the sector to capitalise graduates –approximately 20% in 2017-18.2 Taking these figures at on the changes and emerging recent years – have successfully face value, though, it is stretching opportunities in international made the transition from foreign credibility to claim that this education. The proposition student to permanent resident. constitutes a ‘major component’ that a post-COVID surge in Along the way, they have formed (Birrell, 2019, p.v) of the total domestic demand will save the households, bolstered demand cohort. Further, to suggest, as sector from atrophy is simply a for goods and services, become Birrell does (2019, p.vi), that those chimera. The Government must active in community life, and built taking this route to citizenship are either dramatically increase successful careers and businesses. suited only to ‘low-skilled’ jobs is the level of recurrent funding demonstrably inaccurate.3 to our universities or provide Birrell (2019) takes a very strong support to the sector’s The current crisis affords us all different view here. While noting drive to recover and diversify its an opportunity to transcend that for much of the last decade international student body – so this dualistic thinking. With overseas students have been the that the sector can continue to net migration now in negative single largest growth point in net cross-subsidise degree studies by territory the question to be overseas migration to Australia, domestic students, including those asked is how universities and Birrell sees this in starkly negative on Commonwealth Supported government can best support terms. The ‘rising tide of overseas Places and those paying full the nation’s need for graduate students’, he contends, has been (but still concessional) fees at talent and skilled immigrants in a to the detriment of prospective postgraduate level. permanent entry visa applicants, post-COVID world – and there is local students and Australian every reason to propose solutions workers. that involve a healthy mix of graduates from both local and international backgrounds.

Taking Stock and Taking the High Road | 16 CHAPTER 3 CHINA TRANSFORMED

History tells us that It is now becoming clear that the Chinese academics are now moments of global crisis high Chinese demand the sector amongst the most prominent has experienced over the past co-authors of scholarly articles also tend to be times of 15 years reflected a particular published in top-tier western accelerated change. Any historical juncture and it would be academic journals. reconsideration of the wrong to assume that China will sector’s relationship with continue to be a viable long-term Beijing has recently introduced a Double First Class University China, and with the greater source of demand. Equally, it could be argued that it was appropriate Plan aimed at propelling the Asia region, has to be for the sector’s leadership to top 42 Chinese universities to framed not only in terms of capitalise on this moment in time global prominence. Two decades the deteriorating political to rebuild campus infrastructure ago, no Chinese university was relationship between and to do so in the knowledge ranked amongst the world’s top 100 institutions. Now, it has Australia and China but that, like all booms, the China boom would pass. The sector will six amongst the top 100 in the also by an understanding thus have to adjust to the seismic Times Higher Education World that China’s own university changes underway in China itself University Rankings index – the sector is itself in a state of and change the manner of its same number as Australia (Times dramatic transformation. engagement with China. COVID-19 Higher Education World University has simply increased the urgency Rankings website). of this need for adjustment. China now invests over half a trillion dollars annually in research The Rise and Rise of China’s and according to the Australia- Universities China Relations Institute has now Beijing has made no secret of overtaken the US as the chief its wish to develop China’s top partner in Australian-led scientific universities to be amongst the publications (Baker, 2020). world’s best in terms of academic While the benefits of research prowess and research quality, collaboration and vast funding and this project is already well along these lines do need to be underway. Funded generously weighed up against the possible by government, China’s C9s and risks to national security (Ross, other Project 211 universities 2020), these developments have had considerable success in attest to the rising prestige and recruiting and repatriating Chinese influence of China’s own research- nationals who have completed intensive universities. doctoral degrees in western research-intensive universities.

Taking Stock and Taking the High Road | 17 From Consumer Even though China’s growing to Competitor middle class will continue to generate demand for international ...“ the time has come for At the same time, China can education, there were already no longer be seen simply as a indications last year – prior to Australian universities and student quarry. Beijing is involved COVID – that the volume of visas policy-makers to cease in an active process of import issued to Chinese students for replacement (Babones, 2019; study in Australia was beginning seeing China primarily as Varghese, 2018). It is taking steps to soften (Babones, 2019; Maslen, an inexhaustible source to increase the capacity of the 2019). Due in large part to the country’s some 3,000 colleges and legacy of the recently abandoned of students and to regard universities to take in a still greater One Child Policy, China’s China’s best universities proportion of local students (now population growth is slowing numbering in excess of 20 million). and its citizenry ageing, with the more in the same vein as It has successfully promoted China bachelor’s degree age group we do the UK, Canada and as an international education forecast to decline from mid- provider, with the aim of attracting decade on. the USA; that is, as peers 500,000 international students and competitors in the by 2020 and making China the For such reasons, the time has single largest study destination come for Australian universities international education and policy-makers to cease seeing in Asia for international students market...” (Department of Education and China primarily as an inexhaustible Training, 2015). By 2018, China source of students and to regard had already become the fourth- China’s best universities more ranked international study in the same vein as we do the destination, hosting 450,000 UK, Canada and the USA; that inbound international students is, as peers and competitors (Sinorbis, 2018). in the international education market and as prospective In the context of the current collaborators in (strategically political tensions with Canberra, non-sensitive) research, China’s Education Bureau has in bilateral student mobility, also ramped up negative signals in dual degree partnership, regarding study in Australia, pathway articulation and cross- including the possibility of further credit, executive education and ‘racist incidents’ (Lehmann, 2020) micro- credentialling. and this message appears to be resonating amongst both those While China is likely to remain planning to study abroad but who a major source of international have yet to do so, and also amongst students for much of this decade, those who were undertaking the remarkable advances in China’s study in Australia but had been own university system – advances precluded from resuming their that have been underwritten by campus based study due to the a vast injection of government travel ban (Zhang, 2020). funding – make it imperative that the Australian higher education sector changes the way it engages with China and risk-manages its over-dependence on the Chinese market far more effectively – not by retreating, but by repositioning.

Taking Stock and Taking the High Road | 18 CHAPTER 4 DEGREES OF DISRUPTION

A further consideration of Capitalising on Digital and The ‘sandstone’ alure has had its fundamental importance Blended Learning day. Indeed, some non-Group of Eight institutions, for example to the sector’s prospects Digital content design and Western Sydney University, have at home and abroad is that delivery is here to stay and there already made the shift, leaving the the traditional model of is unlikely to be a ‘snap-back’ to Group of Eight to play catch-up. front-end-loaded, degree- campus-based learning once However, the time has also come focussed and on-campus the current crisis has subsided. for the whole sector to leverage Digital disruption is simultaneously more effectively the possibilities education is under serious mitigating the ‘tyranny of opened up by digital learning and challenge technologically distance’, dampening the appeal of to embrace a fresh approach that and demographically physical mobility and direct cross- ‘blends’ on-line and on-campus (Cawood et al, 2018). cultural immersion and opening learning in ways that appeal to new avenues for engaging with both domestic and international While the rush of enthusiasm 5-10 prospective international students students. Policymakers and years ago for MOOCS (Massive – and with off-shore institutions regulators will also have to rethink Open access On-line Courses) (Cawood et al, 2018). At the same their insistence on international and for ‘flipped’ classrooms time, the rise of digital content students having to be campus- was, arguably, overly optimistic, design and delivery is dismantling based for the entirety of their the sudden pivot to wholly- the barriers to entry that have studies. One option would be for digital delivery necessitated previously sheltered the sector universities to offer international by pandemic-induced border for direct foreign competition and students the opportunity to closure and campus shutdown has dramatically widened the scope for commence their studies at home disrupted fundamentally – and, entry by non-university providers and then to choose between in all probability, permanently (PwC, 2016). having an immersive learning – the old campus-based model, experience in Australia or whether onshore or in the satellite Our universities will have to revise continuing to study online. campuses run by some or our both their mode of learning institutions. As such, it is doubtful content design and delivery that the foundations on which and their ‘value proposition’ to the sector’s past involvement in students if they are to remain international education was based competitive internationally. In will be appropriate for the 2020s essence, the sector will have to and beyond. rethink the terms of its claim as a provider of educational excellence.

Taking Stock and Taking the High Road | 19 Life-long and Non-Award Equally, it would be wrong to Learning assume that this will remain the case indefinitely and unwise not There are clear indications to engage with the emerging also that the model of fulltime opportunities for non-award postgraduate degree studies – a education both onshore and model on which the sector has offshore. Indeed, anecdotal been heavily reliant for almost evidence suggests that there two decades for recruiting is a high level of interest across international students – is in a state greater Asia in Australian providers of flux (Cawood et al 2018). Some offering much more in the way of suggest that the front-end loaded intensive non-award courses to master’s degree is in terminal post-experience learners than is decline, with post-bachelor’s currently the case. One obvious learners moving increasingly to market would be the tens of life-long learning and intensive thousands of Australian university non-award courses, including alumni across the region – from those traditionally defined as India to China and throughout ‘executive education’, as a means South East Asia. Another promising of staying ahead of the curve prospect would be providing of change in technology and in-house courses to public sector know- how. agencies, businesses and not-for- profit organisations across the Legislators have highlighted region and doing so either solo, these developments as a means by in consortia with other Australian which Australian universities can universities or in partnership with better address the learning needs offshore universities. of domestic students. However, the claim that full-time and part-time master’s degrees are becoming obsolete is undoubtedly an overstatement. After all, the full-time pre-experience master’s degree has become the mainstay of international student demand in many Australian university faculties, particularly in business and engineering, over the last decade.

Taking Stock and Taking the High Road | 20 CHAPTER 5 PROGNOSIS

Australia’s universities find The sector is at an inflection point Canberra of targeted support themselves at a decisive of unprecedented importance. for country campuses. While this Both the sector and policy-makers dystopian scenario may be a little historical juncture, with the now face a stark choice regarding overblown, the opportunity costs sector caught in what might the size, scale and student profile (let alone the economic costs) of best be characterised as a of our public universities. In retreating to a domestic bunker long-term policy paradox. the post-pandemic world, our would be enormous.4 The decline in direct universities can take either the ‘low government funding for road’ or the ‘high road’. education and research has The Low Road impelled public universities to find alternative sources If the sector takes the low road, pulling back to a largely or even of revenue to rebuild wholly domestic focus, the campus infrastructure and consequences would very likely underwrite research. be sector-wide decline, a marked shrinkage in university numbers They have done this out of and size, a deterioration in campus sheer necessity; not simple facilities, a lowering of horizons and greed. And just as government a reversion to a pre-1990s focus funding has diminished, so the domestic student education. In one volume of regulatory red tape sense, this would amount to a form has risen dramatically, along of ‘educational nationalism’ and with the associated compliance isolationism. This may satisfy some costs. In effect, for better or domestic political agendas, but it worse, the public university has would also be accompanied by a been transformed into a quasi- singular loss of global reputation commercial entity and no amount and international opportunity. of wishful or nostalgic thinking is going to restore the sector to an According to one estimate (Duffy imagined halcyon past. and Sas, 2020), retreat to the domestic sphere may provoke still more intense internal competition – a form of ‘hunger games’ in which the more powerful and stealthy poach load from weaker players. In this game, regional universities would be at particular risk despite overtures from

Taking Stock and Taking the High Road | 21 The High Road The sector’s better-managed non-metropolitan campuses Alternatively, the sector could already have much to offer both choose the ‘high road’. It could domestic and international work in concert to reposition students, but they will also need itself as a high-quality provider to lift their aspirations above the of new forms of learning for local and engage more actively in international and domestic international outreach. Likewise, students; degree students and the Group of Eight may now have non-award learners. This would be to become more grounded in the hard option, requiring a pro- terms of their own institutional active (not defensive) mindset, a self-image. Their fate is coupled transformed value proposition for intimately to that of the whole both international and domestic sector – and more so now than at students and an all-round shift any time in the past half century. in perceptions of Australia, Indeed, there is real potential Australians and our universities. for city and country institutions But it may well set the sector to forge strategic alliances to on a new path for success in the further shared objectives in decades ahead. education and research both onshore and offshore. However, Above all else, the sector and such an approach would require government must create the a profound attitudinal shift across conditions that will allow our the sector. It would also require universities to transcend the government, regulators and pre-COVID focus on declining instrumentalities such as Austrade standards, diminished funding to be more forthcoming with and internal grievances and tactical support for the sector in rivalries. There is scope to do repositioning itself internationally. this without the need to call on a deficit-saddled government for major increases in direct funding. Decisive steps would also have to be taken to diversify the sector’s international focus, recalibrate how it engages with China, and encourage and incentivise a more even distribution of the international student load across the sector, particularly towards non-metropolitan and regional campuses.

Taking Stock and Taking the High Road | 22 CHAPTER 6 RECOMMENDATIONS FOR POST-PANDEMIC PRACTICE AND POLICY

The points made above Precepts and Principles via in- program immersive experiences in the countries and carry implications for Note that none of these cultures of the greater Asia region. all stakeholders in the recommendations are informed Specific recommendations in Australian higher education by a wish to roll back the decades this regard warrant much closer sector and suggest several to the 1970s when university consideration than is possible here. headline recommendations education was heavily state- for action by the sector subsidised and the international Recommendations for student presence was – at around Action by the Sector itself and by government. 10% – far lower than in recent The recommendations that years; a romanticised past to 1. Diversity the follow are informed by a which commentators of both the international preference for the ‘high road’ ideological left and right seem student profile strangely enamoured. option described above. While some of the most Rather, the recommendations internationally engaged They also harmonise with the below assume (i) that the sector universities have, for some time, principles and proposals on should continue to generate a been endeavouring to diversify tripartite international educational significant proportion of its income their international student profiles, partnership recently put forward from servicing the international there is now a pressing need for in the Varghese/DFAT report on education market rather than the sector to redouble efforts to ways to strengthen economic from the taxpayer, and (ii) that reduce overreliance on one source ties between Australia and India government and business have a country. For the Group of Eight, (Varghese, 2018, ch3). They are legitimate and necessary role to this means China; for some others, meant to be indicative rather than play in supporting the sector’s it means India. As the evidence comprehensive. In the interests of global brand and engagement and marshalled by Varghese (2018) brevity, we have chosen to focus in welcoming and nurturing the demonstrates, India does have on ten key recommendations – international student presence. enormous long-term potential. five for the sector at large, and five India, with the world’s largest for government. While the focus of these tertiary-age population and most recommendations is on the rapidly emerging middle class, is sector’s engagement with an appealing market prospect. international students, alumni By 2030, India aims to lift the and institutions, there is also a higher education participation pressing need for universities and rate of those aged 18-22 from the government to build substantially current 27% to 50% and since on the intentions of the New achieving this wholly domestically Colombo Plan by making it possible would require an additional 700 for far more domestic students to universities, the international spill- deepen their global-mindedness over potential would be enormous and cultural competence (Varghese, 2018).

Taking Stock and Taking the High Road | 23 However, true cohort diversity In pursuing these prospects for While the demand from China cannot be achieved merely by cohort diversification by country has had a strongly metropolitan substituting one dominant source of origin, consideration should focus, the regional universities country for another. also be given to how best to are particularly well placed to respond to the existing gender benefit over time from a cohort There are at least half a dozen skews in cohorts from many of diversification agenda – and other rapidly developing countries the sector’s largest recruitment they are also well placed to offer in our region with solid potential channels, including the Middle internationals a rich diversity of for growth in student recruitment. East and Indian subcontinent learning and life experiences. The Prior to COVID-19, western (male skew) and South-East Asia sector’s network of international universities had considerable (female skew). In some cases, it recruitment agents should also success in attracting students from may be advantageous to seek to be incentivised to lift the flow of across the Subcontinent, South redress the imbalance; in others, applicants and acceptances from East Asia and Latin America. The the priority should perhaps be on diversity markets. suggestion (Babones, 2019) that embracing it. As Larkin (2018) there is insufficient compensatory notes, the trend in South East Asia The time may also have come for demand from countries other than pre-COVID was towards greater the sector to rethink the way it sets China is not born out by recent female participation in higher fees for international and domestic experience. To assert that ‘The education. As such, an appropriate fee payers in postgraduate countries of South and Southeast diversification tactic post-COVID programs and modify the Asia are either too small or too may to incorporate gender significant price differential poor to contribute the desired awareness into marketing and that applies at undergraduate numbers of fee-paying students’ recruitment activities in diversity level between Commonwealth (Babones, 2019, p.17), is a arguably market outreach. Supported domestic students a misreading of the longer-term and internationals. There is still an socio-economic trends both COVID-19 has certainly inflicted argument for cross-subsidising within and beyond these regions. damage on Asia’s middle classes domestic students at both degree There is no reason to suppose that but there is no reason to assume levels but the old mode of charging interest from these alternative that the prior growth in demand all internationals what the Chinese markets will not recover once the for education from these sources market has historically been willing pandemic has subsided. Other will be permanently reversed. to pay has had its day. Rather, countries in the Asia-Pacific region Indeed, along with low interest pricing decisions should now focus also have solid potential here: rates, the upswing in government on what students from particular from Thailand, Malaysia, Vietnam, spending in many countries sets countries should expect to pay for Indonesia, Taiwan and Philippines the scene for a resurgence in the an Australian learning experience to Colombia, Peru and Chile. demand for higher education. Still, and degree. Students from these countries do to compete effectively for market already have a significant minority share in diversity markets, the The Morrison Government’s presence at Australian universities Group of Eight will have to modify recently legislated domestic (Department of Education, Skills their China-focussed pricing fee recalibrations for bachelor’s and Employment, 2020; Ferguson policies and develop effective degrees are an added and Sherrell, 2019). There are ways to accommodate the greater complication here, as is the also longer-term prospects in price and cost sensitivity in these promise of thousands of additional Africa and the Middle East, with markets. This might involve Commonwealth Supported some Australian providers already differential pricing, targeted undergraduate places, but these having a well-established offshore bursaries, support for pre-entry appear to leave untouched presence in the UAE. English-language development, the pre-existing settings at student loans and the like. postgraduate level and it is perhaps here that the scope for innovative pricing strategies supportive of international cohort diversification are greatest.

Taking Stock and Taking the High Road | 24 2. Sharpen the focus third party recruitment agents For instance, the University of on the all-round quality in the China market, the sector Sydney Business School’s award- (quality in, quality should also recalibrate agent winning JobSmart program, through and quality out) of the commissions and scholarship launched in 2015 to deepen the Chinese student cohort arrangements to better incentivise co-curricular work- and social- recruitment of high calibre immersion opportunities for There is some truth to claim students one level below that Chinese and other international that admission standards for dominated by the C9s, the UK postgraduate students, is now students from China are too soft Russell Group and the US Ivy being mainstreamed through and lax (Babones, 2018; Birrell, League. The ‘Trump effect’ is also the School’s pre-experience 2019) and that the learning widening the scope for attracting master’s programs. Student outcomes and job-readiness of a a larger share of the demand from at Sydney University, and at significant number of our Chinese high quality students who would other campuses, have benefited graduates are substandard. otherwise choose to study in the from active involvement in a These shortcomings do demand US, particularly in STEM fields but wide range of work-integrated immediate and ongoing attention. also in business and the humanities learning initiatives, peer and Regarding entry point quality, the (Sinorbis, 2018). alumni mentoring programs and peer-assisted study sessions. sector should tighten academic A further consideration relevant and English language standards However, such initiatives remain to both intake quality and demand the exception rather than the rule for Chinese students. This is diversification is the changing particularly so of direct entry to across the sector and there is a nature of Chinese students’ pressing need for the introduction Australian bachelor’s programs degree preferences. The rapid via the national matriculation of innovative in-curriculum and maturation of China’s economy co-curricular initiatives along these exam, the Gao Kao. More emphasis and professional labour market should also be placed on recruiting lines across the sector to improve has widened the fields of study graduate quality and outcomes. students to bachelor’s programs being sought by Chinese students who achieve high scores in the The evidence indicates that there beyond the previous narrow focus is also considerable scope for International Baccalaureate. on accounting and engineering. Likewise, there is scope to recruit curriculum reform to strengthen We should welcome the fact that students’ post-entry English a higher proportion of students some of the best of these students to master’s programs from language and communication are now looking to a wider range proficiency. Much has been graduates from the top echelon of fields of study – from media, of Chinese universities – the C9, done here; but much more still journalism, literature, sociology, needs to be done. in particular, but also other 985 social work and psychology to and 211 institutions. Doing so will data analytics, logistics and supply 3. Increase strategic require a new value proposition chain management, international partnerships with to these prospective students, business, marketing and the like. international possibly including an innovative The wider point here is that ‘high institutions combination of on-line and road’ action directed consciously on-campus learning, stronger towards enhancing their learning While some Australian universities emphasis on in-program work- readiness, learning experience and already have strong offshore integrated learning and graduate sense of belonging is an eminently partnership portfolios, the sector placement support. more sensible and strategic option overall has been far less effective than those in the UK, EU, Canada, The use of artificial intelligence than simply imposing quotas or arbitrary limits on their presence. the UK, China and elsewhere platforms and randomised in optimising the strategic interview questions to auto-assess There are some stellar examples advantages of formal cross-border self-managed online selection across the sector of initiatives partnership. While our universities interviews by degree applicants is designed to enrich both the have previously been inclined to now within reach as an additional learning experience and the partner mainly with Anglosphere means of entry-point quality job-readiness of students and northern hemisphere control. Given the prominence of from China and elsewhere. institutions, the opportunities

Taking Stock and Taking the High Road | 25 for partnership within our own • Expanding opportunities for our They are also excellent hemisphere are becoming staff to share knowledge and ambassadors for the sector. They increasingly strong, particularly expertise with staff from partner are proud of their association given the rapidly growing number universities; with us and are more than willing of universities across Asia whose • Creating opportunities for to promote not just their alma faculty are fluent in English and our educators to undertake mater but also the sector and who deliver a high proportion of international cross-institutional the country. Their involvement in their classes in English. Varghese collaborations in coursework recruitment activities is invariably (2018) notes that partnership with education and higher degree positive. They are also well placed India’s Institutes of Technology research supervision; and to provide both in-program and and Management holds promise. graduate placement opportunities. In Vietnam, the VNU network also • Widening avenues for has strong appeal. In China, too, international research The Chinese alumni are well- the opportunities for low-risk collaboration, including short- organised and active, with the partnership with the C9s remain term exchange programs for Australia China Alumni Association considerable, notwithstanding the staff and research students. (est. 2007) reportedly having over recent introduction by Canberra 26,000 members across China 4. Leverage alumni (ACAA website). While it enjoys of mandatory vetting of proposed networks. partnerships on national security welcome support from partner grounds. Well-designed and well- Despite the sector’s large alumni universities and DFAT staff, the maintained, these partnerships diaspora, many of whom now sector’s approach here remains offer a range of advantages, occupy positions of influence in too fragmented, uncoordinated including: business and public administration and nonstrategic. What is needed in China and elsewhere, Australian is a concerted approach, one • Leveraging the expertise and universities still tend to favour that would see our universities resources of international the ‘FIFO’ and fund-raising transcending their preoccupation partners for mutual benefit; approach to alumni engagement; with internal competition, pooling • Providing an additional channel an approach that is more self- their expertise to offer alumni of high-quality international referential than aligned with further leading opportunities at students that, over time, is alumni needs and expectations. scale and scope, and mobilising likely to be less volatile and What our alumni are looking for our alumni networks to promote more reliable than open market is connection that is constant, the sector as a whole and sourcing of students; continuous and better tailored to strengthen its engagement with their needs and capabilities. As local employers and policy-makers, • Serving as a hedge against the indicated in DFAT’s 2016-20 global including those in China. maturation of higher education alumni engagement strategy in China and a consequent 5. Accentuate the (Department of Foreign Affairs shift in Chinese student study place of intensive and Trade, 2016), there are myriad preferences towards local courses in the sector’s ways by which this powerfully institutions and away from full international offerings. positive resource can be mobilised degree study abroad; to mutual benefit. To date the sector has marketed • Enhancing the quality and itself almost exclusively as a diversity of our international Our alumni understand that their provider of campus-based degree student cohort, including learning needs did not cease at studies – but this must now exchange students; the moment of graduation. They change. While degrees are likely look to us to provide them with • Enriching global mobility/ to remain core business for the further learning opportunities foreseeable future, the rise of life- immersion learning for our – and the digital revolution own students via exchange long learning and digital content now enables us to do so with delivery affords the sector an agreements and degree ease. They should be front-of- articulations; exciting opportunity to diversify its mind candidates for non-award product mix to upscale non-award intensives, executive education and pre-award course offerings to and micro-credentialling.

Taking Stock and Taking the High Road | 26 international markets. This could raise the profile of our graduates visits by student groups from include everything from taster and strengthen their placement selected secondary schools and classes to 1-2 day online or on-site opportunities. With careful international partner universities. executive education intensives planning and targeting, trade Anecdotal evidence indicates for practitioners on a wide range missions along these lines could that affording high school and of cutting-edge topics and multi- also assist the sector to compete bachelor’s students from other week on-line courses co-delivered more effectively for high quality countries an opportunity to by multiple institutions. students from China. While none undertake a study tour and of these suggestions are new or business practicum can be Recommendations for novel, in combination they would an effective means of future Action by Government be a powerful means of promoting international student recruitment. a refreshed Australian educational 1. Sponsor tripartite brand. As such, there is merit in trade and education government and the sector co- missions to target 2. Expand special sponsoring a New Colombo Plan countries. programs to support in reverse – to encourage inbound intensive inbound mobility by select groups of While some State governments, student study visits. students from Africa, the Indian along with Commonwealth Sub-Continent, the Asia Pacific, bodies like Austrade/DFAT, have Two areas where government China and Latin America. This was been quite supportive of the financial aid could be used more precisely the remit of the original sector’s outreach to markets in effectively to promote recruitment Colombo Plan launched in 1951. China, India, Indonesia and Latin of high-quality students from the It is also a key element of the America, if the sector is to recover Asia-Pacific region are the Australia Australian Awards program. So, and diversity its international Awards program and short-term the precedent is there; it should student intake, it will need study tours. The Australia Awards now be built upon. tactical and moral support from program has been very successful both government and business. in subsidising recruitment of 3. Host sector-wide Key competitor nations have modest numbers of outstanding events for international been doing this for much of the students from the region, alumni. last two decades. For instance, particularly at doctoral level, and the British Council, the public has provided the sector with As noted above, the sector face of UK universities in their superb alumni ambassadors, and needs to be more effective in the international dealings, organises the country with significant ‘soft way it engages with Australia’s regular international information power’ influence. However, a more global alumni, because when and recruitment events. Having ambitious and expansive approach effectively mobilised, these similar pro-active sponsorship for to this form of merit-based foreign networks represent a powerful ‘Brand Australia’ missions to target aid and social inclusion would allow means of graduate placement, diversity markets would assist both the sector and the country corporate engagement and the sector to improve recognition to increase Australia’s educational student recruitment. There is and market share, more so if such profile across the entire southern much more that government can missions included representatives hemisphere. do to help the sector to leverage from government, business and international alumni for these the university sector. As well as While the New Columbo Plan purposes. Working in tandem, targeting under-exploited student has been somewhat effective in government, sector peak bodies recruitment channels such as providing domestic students with such as Universities Australia, international schools, students valuable immersive experiences and local alumni associations undertaking the International in countries in our region, could coordinate and co-host Baccalaureate Diploma, and more should be done both to regular offshore and online networks of local school careers increase outbound mobility by events, including guest speakers, advisors (e.g. India’s IC3 network), domestic students and also to master classes, alumni award tripartite missions could also encourage and support intensive competitions, and the like. meet with local employers to inbound study and placement

Taking Stock and Taking the High Road | 27 Alumni could also be offered placements and employment Government could and should do free or low-cost online refresher opportunities under the post- more to support graduates to find courses delivered by faculty and study work visa scheme. suitable employment and facilitate promoted by Austrade. entrepreneurial activities for new There is promise in encouraging graduates in their home countries. 4 Actively encourage multinational firms to provide Again, this could be done most employers to provide two years of Australian-based effectively via partnership between in-program placement employment to graduates prior to the sector and Canberra. Third opportunities their redeployment either to their party providers, perhaps including and on-shore post-study home country or to a third country some of the most reputable work opportunities for new in which the firm has a footprint. student recruitment agencies international graduates. One of the weaknesses in Birrell’s (e.g. IDP), could be commissioned critique of the post-study work visa Two of Australia’s traditional to provide on-the-ground program is the evident assumption facilitation of job search. For their rivals in international education, that the program appeals only the UK and Canada, have post- part, universities should also do to employers whose operations more to sharpen graduates’ job- study work visa programs similar are wholly domestic and who to our own and criticism of our readiness and ability to present might otherwise hire a domestic their capabilities effectively both 485 visa scheme is misdirected. applicant. On the contrary, one of The principle is laudable. It is the on paper and at job interviews and the real (if underutilised) strengths other selection events. practice that has been suboptimal. of the program lies in its potential Rather than being abandoned, to connect our international this scheme should be promoted graduates with multinational more aggressively both abroad businesses looking to hire and at home. Australia’s record of graduates with technical, cultural providing international students and language skills suitable for with work placements both eventual international deployment. in-program and at graduation has been mediocre, with many 5 Sponsor offshore businesses and some public sector initiatives to assist agencies reluctant to take on new graduates to students other than domestics. secure quality jobs in their home country. In part, this reluctance is the educational counterpart to While the employment outcomes Australia’s historically low of our international graduates level of research collaboration are better than critics imply between business and academia (Department of Education, Skills relative to other OECD countries and Employment, 2020b), there (McDonald, 2017). This structural is certainly scope for further divide is arguably detrimental to improvement in the employment both parties and to the country. outcomes of international students One important remedial step returning to their home country would be for government and (Matthews et al, 2019). To their business peak bodies, such as the credit, some universities have Business Council of Australia, to been very active in recent years work with the university sector in enhancing graduates’ job- to encourage local employers, readiness and developing their particularly those with operations job search and interview skills. in countries of student origin, to However, more needs to be provide placement opportunities, done here. including credit-bearing industry

Taking Stock and Taking the High Road | 28 CHAPTER 7 CONCLUSION

This discussion paper The paper also challenges the challenges the proposition assertion that the balance between domestic and international One“ under-utilised the Australia’s public education is – or should be – a universities should zero sum game. Rather, the paper resource with enormous step back 50 years in proposes that both the sector and potential to support this time, retreat from the government should embrace the international education ‘high road’ and work in partnership ‘high road’ agenda are the to reposition the sector so that, hundreds of thousands market, China included, and over the course of this decade, focus wholly or largely on our universities can rebuild global of Australian university servicing the learning needs brand and reputation, recover their alumni around the world; of domestic students. international student numbers, reprofile the international student alumni who are both A reversion to educational cohort both to improve the nationalism would be a academic merit of students from proud of their association retrograde step economically, China and to rebalance the overall with the sector and culturally and diplomatically. load progressively to grow the It would diminish both the number of students from target immensely keen to assist.” country and its global standing. diversity markets. The paper recommends ten key actions that the sector and government can take to achieve these ends. An under-utilised resource with enormous potential to support this ‘high road’ agenda are the hundreds of thousands of Australian university alumni around the world; alumni who are both proud of their association with the sector and immensely keen to assist. To not enlist their energy and support, and to not reposition the sector to survive and succeed in the post-COVID world, would be to squander a rare opportunity to guarantee the future success those institutions that, since 1850s, have come to symbolise the spirit and substance Australia’s liberal democracy and the country’s longstanding and positive role in the international economy and world affairs.

Taking Stock and Taking the High Road | 29

REFERENCES

ACAA [Australia China Alumni Department of Education (2019b), Ferguson, H. and Sherrell, H. Association], ‘ACAA Introduction’, Education Export Income by (2019), Overseas Students in ACAA website. Country 2018-19, Australian Australian Higher Education: A Government, Canberra. Quick Guide, Parliamentary Library, Baker, J. (2020), ‘China overtakes Australian Government, Canberra. US to become Australia’s leading Department of Education (2019c), research partner’, Sydney Morning Tuition Fees for International Horne, J. (2020), ‘How universities Herald, 22 July. Students, Australian Government, came to rely on international Canberra. students’, The Conversation, Babones, S. (2019), The China 22 May. Student Boom and the Risks It Department of Education and Poses to Australian Universities, Training (2015), Australia- Hinton, J. (2020), ‘Number of Centre for Independent Studies, China Education and Research Chinese student enrolments in Sydney. Partnership Opportunities, Australia 2010-2019, by education Australian Government, Canberra. sector’, Statistica website. Birrell, B. (2019), Overseas Students are Driving Australia’s Department of Education, Skills Karp, P. (2016), ‘More than 60% Net Migration Tide, The Australian and Employment (2020a), End of international students in Sydney Population Research Institute, of Year Summary of International underpaid – survey’, The Guardian, Middle Camberwell. Student Data 2019, Australian 17 February. Government, Canberra. Cawood, R, et al (2018), Can the Larkins, F.P. (2018), ‘Male Students Universities of Today Lead Learning Department of Education, Skills Remain Underrepresented in for Tomorrow? The University of the and Employment (2020b), Australian Universities. Should Future, EY, Sydney. Graduate Outcomes of Australia be concerned?’, International Students, Australian Unpublished Paper, Melbourne Chevrolle, A. (2020), ‘What did Government, Canberra. Centre for the Study of Higher international students ever do Education, University of for Australia?’, The PIE News, 28 Department of Foreign Affairs Melbourne. August. and Trade (2016), Australian Global Alumni Engagement Lawson, C. (2012), Student Voices: Deloitte Access Economics (2015), Strategy 2016-2020, Australian Enhancing the Experience of The Importance of Universities to Government, Canberra. International Students in Australia, Australia’s Prosperity. A Report Australian Education International, Prepared for Universities Australia, Doherty, B. (2020), ‘“We feel Australian Government, Canberra. Deloitte, Sydney. abandoned”: international students in Australia facing coronavirus Lehmann, A. (2020), ‘“I love Department of Education alone’, The Guardian, 19 April. Australia”: 3 things international (2019a), Onshore Higher students want Australians to Education International Students Duffy, C. and Sas, N. (2020), know’, The Conversation, 12 June. as a Proportion of All Students ‘Australia’s university sector hit by University, 2018, Australian by job losses, fall in international Government, Canberra. students and Federal Government reform – so what’s next?’, ABC News Online, 2 October.

Taking Stock and Taking the High Road | 30 Maslen, G. (2019), ‘Sharp fall in Sinorbis (2018), The Learning number of visas issued to Chinese Dragon: How to Markey students’, University World News, Successfully to Chinese 25 September. International Students, Australia China Business Council. Matthews, D., Radloff, A., Doyle, J, and Clarke, L. (2019), International Times Higher Education (2020), Graduate Outcomes Survey -2018. ‘Best universities in China 2021’, Final Report, Australian Council for THE World University Rankings Educational Research. website. Migration Council of Australia Universities Australia (2017), (2015), The Economic Impact of The Facts on University Funding, Migration, Canberra. Universities Australia, Canberra. McDonald, D. (2017), ‘Australian Varghese, P.N. (2018), An India businesses have a problem with Economic Strategy to 2035, collaborating with unis – and it Department of Foreign Affairs and could be costing them billions’, Trade, Canberra. Business Insider Australia, 28 November. Zhang, M.Y. (2020), ‘Students in China heed their government’s PriceWaterhouseCoopers warning against studying in [PwC] (2016), Australian Higher Australia’, The Conversation, 8 July. Education Workforce of the Future, PwC and Australian Higher Education Industry Association. Ross, J. (2020), ‘Australia investigates ties to China’, Inside Higher Ed, Times Higher Education, 3 September. Sharrock, G. (2018), ‘Australia’s tertiary education funding is not as low as it seems in OECD metrics’, The Conversation, 17 September.

Taking Stock and Taking the High Road | 31

NOTES

1 The higher education sector 3 While is the case that, during their 4 It may be the case that with 37 contributed 46.2% of total university studies, international public universities, the country international student enrolments students tend to take work simply has too many universities in 2019 (N=956,773). The VET in low-skilled casual jobs in to service domestic needs. Some sector contributed 283,893, services and hospitality (where campuses have remained far more ELICOS 156,880, schools 25,564 the evidence does unfortunately reliant on the public purse than and non-award 48,217. Students suggest that are vulnerable to other and some of these appear to with Chinese nationality comprised exploitation), as Matthews et have been operating uncomfortably 27.3% of aggregate international al (2019) demonstrate, it is not close to the margin of financial student enrolments (Department of accurate to imply that, at the point viability even prior to the current Education, Skills and Employment, of graduation, our international crisis. Conversely, it is also plausible 2020a) graduates are bereft of professional to suggest that some institutions qualifications and unable to find have been unnecessarily provincial 2 Departmental data (reported suitable positions. For instance, if in focus and that they may benefit in Ferguson and Sherrell, 2019) their studies are in professionally from embracing a vision that indicates that the number of accredited degrees in, say, is more expansive in terms of permanent residency visas granted engineering, accounting, teaching, student profile and load. There to former international students health sciences, medicine or is thus an argument to suggest (excluding those who transitioned dentistry, they do indeed graduate that a root and branch review and to another temporary visa first) fell with a professional qualification – rationalisation may be in order. from a peak of 30,170 in 2012-13 to and they are certainly not looking However, this matter is beyond the 13,138 in 2017-18. Conversely, the to compete with unqualified or scope of this paper. number on temporary graduate trade-qualified locals. The key visas (including 485 visas) rose counterpoint to Birrell’s zero sum from 21,147 in 2014 to 54,932 in interpretation is that migration by 2018, including 46,478 485 visa young, competent, knowledgeable holders. Combining the figures for and ambitious graduates on the those who took up permanency cusp of building careers, families in that year and those who and businesses and contributing were granted a 485 or another to the nation’s tax base has a temporary graduate visa, gives a well-established multiplier effect total of 68,070 who remained in the on economic activity (Migration country. In the same year, onshore Council of Australia, 2015; international university students Department of Education, Skills and totalled 315, 522 current students Employment, 2020b). which (setting aside lag effects and the fact not all ex-students granted permanent residency or temporary visas came from the university channel) suggests that the proportion of international graduates remaining on was only around one in five.

Taking Stock and Taking the High Road | 32 In October 2019, the Business Council of Australia and Asia Society Australia together with knowledge partners PwC Australia and the University of Sydney Business School formed the Asia Taskforce of senior leaders from the business, education and government sectors to examine how Australian companies and organisations can increase their presence and position in Asia to ensure our continued prosperity and deliver progress for future generations. While the Taskforce International Education advisors named below have provide input into the discussion paper, the views expressed do not necessarily reflect the views of any individual or the organisations they represent. This report refers to Asia as the countries of South East Asia, South Asia and North East Asia. This Discussion Paper and other publications by the Taskforce can be found at https://asiasociety.org/australia/asia-business-taskforce

Asia Taskforce Advisors on International Education • John Shields Professor and Academic Director International, University of Sydney Business School (Author) • Greg Whitwell Professor and Dean, University of Sydney Business School • Glyn Davis AC Distinguished Professor, Crawford School of Public Policy, Australian National University • Nicholas Farrelly Professor and Head of Social Sciences, University of Tasmania • Huong Le Thu Senior Analyst, Australian Strategic Policy Institute • Sung Lee Director, Asia Practice, PwC Australia

www.bca.com.au www.asiasociety.org/australia www.pwc.com.au/asia-practice

www.sydney.edu.au/business 127079384