Australian universities must tap into China’s domestic and external policies to safeguard financially crucial East Asian enrolments, a policy paper argues.

The , by Canberra-based consultancy Foreign Brief, says that Australian institutions should engage more with China’s landmark foreign development plan, the Belt and Road initiative, to capitalise on its educational aspects.

Antipodean universities must also adapt to China’s internal policies, particularly President Xi Jinping’s “Made in China 2025” industrial strategy.

Such moves could help insulate Australian higher education against “flashpoints” that risk undermining a vital income stream for universities, with Chinese students providing about 20 per cent of overall revenue at some institutions.

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The paper says that many Chinese graduates return from overseas study steeped in “hard skills” but lacking the entrepreneurial flair to distinguish themselves in the “cut-throat Chinese job market” – particularly now that President Xi’s strategy, which aims to transform China from a low-end manufacturer to a specialist in areas such as robotics and artificial intelligence, has created a need for impresarios to drive “higher-level job creation”.

“Made in China 2025 presents an opportunity for Australian universities to establish an attractive point of difference for prospective Chinese students,” it says.

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“More than 97 per cent say they would benefit from education from entrepreneurs. If Australian universities don’t acclimate to these changing trends they risk losing their appeal and relevance to prospective Chinese students.”

Author Nick Lyall said that the paper’s key point was that Australian university administrators needed to consider their services through a Chinese lens. “There is not sufficient awareness of these Chinese domestic factors that will imminently have extensive impact on things at home,” he added.

“The necessity to build an entrepreneurial skill base in China is massive. It’s happening now.”

Mr Lyall's paper says that the Belt and Road initiative, while dominated by grandiose infrastructure plans, also offers educational opportunities under its policy objective of fostering people-to-people connections. It says that while student exchanges under the initiative are still rudimentary, the Belt and Road initiative could become a dominant factor in Chinese students’ destination choices.

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Australia should expand its “currently limited” on the Belt and Road initiative, the paper says. “Emphasising partnership in human capital (like education) as opposed to physical capital may assuage the fears of those in government concerned at the Belt and Road initiative’s predatory potential.”

Mr Lyall said that while the Belt and Road initiative was “still nascent, in years to come it will become a cornerstone of how China engages the rest of the world”.

The paper also assesses the “risk scenarios” that could jeopardise Chinese enrolments in Australia. Mr Lyall said that the biggest threat lay in China imposing unofficial economic sanctions in response to disagreements over matters such as foreign interference laws or the South China Sea.

“There are many ways Beijing could use leverage in those unofficial ways, from propagating rhetoric through state media to ‘encouragements’ for people not to choose certain locations for their studies,” it says. “These sorts of unofficial measures have only relatively recently become a foreign policy tool, but they have tangible effects.”

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john.ross@timeshighereducation.com