We have heard a lot of concerns expressed recently about Australia¡¯s reliance on Chinese students. A recent by a University of Sydney sociologist revealed that 11 per cent of students in Australia are from China, with some universities relying on Chinese students for very high proportions of their revenue ¨C in two cases, more than 20 per cent. An analysis of the latest university annual reports by Times Higher Education revealed that even these figures may be understated.

But neighbouring New Zealand¡¯s exposure is almost as great, with 8 per cent of its students hailing from China. Chinese students represented 47 per cent of all international students in New Zealand¡¯s university system in 2018; no other country contributed more than 8 per cent.

Fees from international students represent a high proportion of New Zealand universities¡¯ revenue: more than 10 per cent across the system. But, as in Australia, there is mounting concern about the possible effects on this revenue stream of the China/US trade war and the falling value of the yuan, in the context of Western anxiety about growing Chinese economic and political power. Souring the relationships with Chinese authorities carries high risk for universities; they need to tread carefully.

Just how carefully was shown in New Zealand as the 30th anniversary of Tiananmen Square approached in June. A commemoration was to take place on the campus of the Auckland University of Technology (AUT), the New Zealand institution most reliant on international student income (deriving more than 20 per cent of its total revenue from that source in 2018).??

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This led the Chinese consul-general, Xiao Yewen, to ask?the AUT vice-chancellor, Derek McCormack, to?cancel the event. Now, it wasn¡¯t an AUT-sponsored event, but the organisers included an AUT staff member, who had booked a room in a university building. The consul-general¡¯s request placed McCormack in a difficult position ¨C how to appease an irate diplomat without appearing to endorse the Chinese government¡¯s view of a shocking event.

Fortunately for AUT, McCormack found a tightrope to walk. The event was scheduled for a public holiday, when the building would be locked. The booking was cancelled ¨C and the organisers found a non-university venue for their event. In his delicately worded to the consul-general, McCormack explained that the room had not been ¡°booked correctly or paid for¡± by the organisers and that the event had been scheduled for a day when the building was closed.?

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¡°Happily,¡± he continued, ¡°on this instance, your concerns and ours coincided and the event did not proceed at the University.¡± He then went on to reiterate AUT¡¯s unwavering commitment to academic freedom, while noting that AUT ¡°has no wish to deliberately offend the government and the people of China¡±. ?

More recently, controversy arose across the road from AUT, on the campus of the University of Auckland. Supporters of the Hong Kong democracy protesters started a Lennon wall at the university ¨C a noticeboard covered with notes supporting the protests. This drew the ire of international students who supported the Chinese government position on Hong Kong. They defaced the Lennon wall, placed Chinese flags on it and eventually took it down.

That happened twice. The supporters of the protests created the Lennon wall a third time and stood guard over it. A group of Chinese students appeared and an acrimonious stand-off eventuated, captured on . Losing his temper, one of the patriotic students pushed the leader of the protest supporter group, Serena Lee, a postgraduate student who is a New Zealand citizen but is from Hong Kong. Lee fell to the ground.

When the video , the consul-general again waded in, criticising media reporting of the clash and praising the Chinese students¡¯ ¡°¡±.

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That led the New Zealand government to intervene ¨C but carefully, walking a tightrope. Foreign ministry officials called in Chinese diplomats, asking them to respect New Zealand¡¯s tradition of freedom of expression ¨C including on university campuses. The Chinese officials that their actions had been ¡°beyond reproach¡±. They suggested that officials ¡°take off their tinted glasses¡±.

Meanwhile, the university reported that they had conducted a disciplinary investigation into Lee¡¯s complaint of assault, but they declined to release the outcome other than to ¡°appropriate disciplinary action¡± had been taken ¨C leading to speculation that the university, too, had borrowed the tightrope.

China is New Zealand¡¯s biggest trading partner. In the year to July 2019, China took nearly 11 per cent of its merchandise exports, compared with 8 per cent for the next highest country, Australia. The imports story is similar ¨C China is number one, supplying 9 per cent, with Australia second on 5 per cent.?Moreover, with increases in fees for domestic students controlled by the government and most public funding streams constrained, international students represent the most significant source of potential income growth for New Zealand¡¯s universities. They will need Chinese international students more and more.

Yet, echoing the recent University of Sydney paper, New Zealand¡¯s Tertiary Education Union (TEU) has expressed concern that universities could experience damaging falls in enrolments because of factors such as currency fluctuations, epidemics and economic conditions. Writing on the , Andrew Geddis, professor of law at the University of Otago, argues that this financial dependence on one country creates ¡°an insidious issue: the impact of funding pressures and funder desires on academic freedom¡±. He added that ¡°the threat to withdraw funding can generate an academic version of Murphy¡¯s golden rule: whoever has the gold, makes the rules¡±.

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Overuse could make the diplomatic tightrope rather threadbare as the next decade unfolds. And as the tug of war between values and pragmatism gets ever fiercer, there is a grave danger that it will ultimately snap.

Roger Smyth is an independent consultant and adviser. He is the former head of tertiary education policy at New Zealand¡¯s Ministry of Education.

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