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China’s latest multi-pronged moves to stall the flow of students to Australian universities — both official and unofficial — will be a great test of how much control the Chinese Communist Party (CCP) has over the country’s increasingly wealthy burgeoning middle-class.

In the past week, it has emerged that Chinese authorities have brought significant pressure to bear on the nation’s network of education agents. These agents play a major part in recruiting students for Australian universities, TAFEs and other institutions.

Such action is seen as “unofficial”, with no public notifications or admissions by authorities. But in a country where the CCP controls every aspect of society, the unofficial is too often the official.

A range of mainland agents from major student placement firms including New Oriental, JJL and EIC have reported to Australian interlocutors that they have been invited for “cups of tea” with officials. This is code language for backroom warnings in China.

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On the “official” side, Crikey has learned through sources in the international student sector that the Chinese government across multiple provinces is pulling support from its employees studying in Australia, including those mid-way through study.

The concerted efforts by Chinese authorities has led Austrade (the government agency responsible for promoting Australian education services overseas) to suddenly withdraw from a key education expo (the China International Education Exhibition, taking place online on March 20-21), leaving participating Australian institutions in the lurch.

“After careful consideration Austrade is opting not to participate in this year’s event. There will not be a strong Australian presence,” Austrade China education trade commissioner Andrew Carter wrote in a letter obtained by Crikey.

Based on official Australian government figures, international education was worth $37.5 billion to the Australian economy to June 30, 2020, with Chinese students contributing $10.5 billion (although many observers think those figures are pumped up).

The latest moves follow safety warnings from the Chinese Ministry of Education warning of “malignant attacks” on Chinese students here. And, in the potentially darkest warning from Chinese authorities, a number of Australian universities including the Royal Melbourne Institute of Technology, Swinburne University of Technology, Griffith University and the University of Southern Queensland have been slammed for poor teaching quality.

Australian institutions are all on the official list of those approved to work with government in China. Any removal from this list would be a disaster for any institution and would effectively spell the end of its Chinese student days.

“They have tried this before, both in previous years and particularly over the past year as Beijing has tried to reduce exports to Australia,” one Australian education sector executive said.

But insiders said that the Chinese have to tread a fine line. They can’t “cancel” Australian education altogether, given the growing alumni cohort now working inside China and the significant cohort of CPP cadres and their children who have studied or are studying in Australia.

“They want to be able to turn the tap on and off — like coal and wine,” one observer said, but this is no easy feat. When Australia opens once more for international students (probably for the 2022 academic year), it will be very attractive. There will be low or zero COVID-19 cases and lots of job opportunities. Australia stands out internationally (along with Japan) as having the most generous post-graduation work rights for students as well as a safe environment, despite CCP propaganda.

Australia is seen as a destination not just for study but for longer-term work. It’s an appealing immigration prospect for students from China, India and elsewhere.

People in the sector argue that there is no shortage of demand from international students. There are also a limited numbers of places, and the barriers to entry to the higher education sector — especially universities — are very high; capital costs are massive and it’s a sector tightly regulated by education and immigration authorities.

The education sector dodged the first COVID bullet, with most students managing to reach Australia before lockdowns began in late March last year. Since then, the situation has deteriorated.

The latest official figures (released last week for July-November 2020) show a fall in commencements of 9% compared to the previous year. They are expected to fall off a cliff in 2021 with Australia’s borders still all but closed. A Victoria University study last October predicted student numbers would drop by up to 50% this year.

As students from the other major markets, including India, have walked away — spurning a year or more of online learning — the Chinese have become this year’s almost exclusive buyers, according to industry insiders.

Australian universities, particularly the elite Group of Eight that is usually the go-to for Chinese students, will be sweating on this latest test.