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

How Hong Kong’s turmoil is driving a wedge between ethnic Chinese overseas

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

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

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

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

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

Pro-Hong Kong group clashes with rival protesters in Melbourne

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

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

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

Hoax Chinese police cars on streets of Australia spark alarm

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

Shen on Monday disputed the report as “totally irresponsible”.

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

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

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

Hong Kong protests to Uygur camps: Chinese students are scorned

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

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

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

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

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

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

University of Queensland faces heat for appointing Chinese diplomat

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

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

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

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

Connect with us on Twitter and Facebook