Time for UK universities to move beyond reliance on China
4 Oct 2024
Does the Chinese government have our cash-strapped universities over a barrel? asks Jonny Harris.
In the backdrop of the financial crisis facing the higher education sector, UK universities have become increasingly dependent on Chinese students to address financial shortfalls. These students have contributed significantly to tuition revenue, making up 21.8% of all international applications in 2023. However, rising geopolitical tensions and over-reliance on one country has raised concerns about the long-term sustainability of this approach. Is it time for universities to rethink their dependence on China?
The financial resource of international students
As a world market leader in higher education, who have historically dominated global international rankings, British universities have become increasingly dependent on international students. In 2023, 758,855 overseas students made up 26% of the overall student population in UK universities.
These students pay significantly higher, uncapped, tuition fees compared to domestic students—around £22,000 per year for undergraduate courses and up to £40,000 for postgraduate courses. This income is vital as universities struggle financially; 40% are expected to face a deficit next year. With the government refusing to offer financial support, international student fees are critical to their survival.
However, international student numbers are shrinking following a clamp down on institutions which as the last government put it, undermined the “UK’s reputation by selling immigration not education”. Tougher visa restrictions mean that most can no longer bring family members to the UK. In 2024, student visa applications from India and Nigeria —two other major sources of international students— declined by 16% and 38% respectively. This decline on its own contributes significantly to the threat facing universities’ financial health.
This trend has also been seen with student visa applications from the European Union (EU) falling by 12%. However, the Prime Minister has been in Brussels for talks with Ursula von der Leyen this week, as the new Governments negotiates its future relationship with the EU. One of the key discussion points was a potential youth mobility scheme, something already agreed with Germany. Keen to see a token of good faith, the Prime Minister is under pressure from Brussels to open discussions on a scheme that would allow young people from the EU to live and work in the UK for a fixed period, and vice versa but has been resistant so far. If these measures are agreed, it is likely to aid recovery.
Chinese students’ numbers are also notably falling, but to a much lesser extent (4%) compared to the EU, Indian and Nigeria. They arguably seem less impacted by the newish visa restrictions – creating a further reliance on China to negate from this short-fall. Many are attracted to “prestigious” universities, like Oxford, Cambridge and other Russell Group universities. In 2023, Chinese applicants had a 52.4% acceptance rate and made up 22% of all international students in the UK, and their numbers have more than doubled since 2014 (some universities saw a 228% increase in this period).
"If China were to restrict student travel or the UK further tightened visa policies, universities that rely heavily on Chinese students could face severe financial consequences."
A Risky Reliance?
While Chinese students provide significant financial benefits, the growing reliance on them raises concerns about long-term sustainability. Political tensions between the UK and China—over human rights, trade, and security—could disrupt this flow of students. If China were to restrict student travel or the UK further tightened visa policies, universities that rely heavily on Chinese students could face severe financial consequences.
Domestically, there are also deep concerns. UK politicians and security agencies have flagged the potential risks of some Chinese students who may be used for state-sponsored espionage, particularly in areas like artificial intelligence, quantum computing, and biotechnology. Sir Iain Duncan Smith, the former Tory leader and a leading “China hawk”, voiced real concern after the Chinese ambassador Zheng toured a number of UK universities, where he encouraged Chinese students to return home after their studies to contribute to China’s development, describing it as their duty to serve the “motherland.” There are active discussions in leading HE institutions and in Government over the safety of sovereign IP and the risk of it being exported to a geopolitical unaligned state such as China, which is close to Russia and Iran.
The last government made clear there was significant concern and made efforts to “protect [British] universities from influence” by the Chinese Communist Party. There have also been discussions about restricting Chinese students from certain STEM fields, which could further impact university research and finances.
With a new government in power, it is unclear as of yet how the UK’s relationship with China will develop. Sir Keir Starmer spoke with China’s President Xi Jinping in August, a first meeting between the countries’ leaders since 2022. The Prime Minister said that he hopes they can have “open, frank and honest” talks about areas of disagreement.
To date, the Labour Government has remained relatively quiet on China, declining to label the country “a threat”. However, recent reports from the Intelligence and Security Committee have branded China as targeting the UK “in its efforts to build global support for its core interest.” The UK Government has also already pledged to cut funding for all Confucius Institutes across universities, branding them as a “trojan horse”, which will invariably sour relations between the sector and Chinese officials.
Rethinking the strategy
Given the increasing risks associated with over-reliance on Chinese students, UK universities need to rethink their strategy. In A blueprint for change, recently published by Universities UK, the complete lack of focus on China was notable, with a clear shift towards domestic and local growth.
While Chinese students have provided vital financial support, geopolitical tensions and security concerns could lead to future restrictions, forcing universities to diversify. Universities should now be developing contingency plans, exploring new opportunities in Europe and other markets to reduce reliance on one country. A strategic review of international markets is essential, with greater efforts needed to promote UK education globally.
On the home front, further justification for higher UK tuition fees may be required to offset the financial gap left by declining numbers of homegrown students. Ultimately, a focus on local growth and a reduction in reliance on China may be the way forward for the long-term sustainability of UK universities.
Whatever route universities decide to take, one thing is clear – the time has come for UK universities to reconsider their reliance on China and focus on building a more balanced and sustainable future.