Top universities’ reliance on Chinese dollars continues to climb

Seven of every 20 dollars that fund Australia’s second- and third-biggest universities come from Chinese students, a report suggests.

Seventy-eight per cent of international students enrolled at UNSW Sydney last year were Chinese, according to an audit report on New South Wales (NSW) public universities.

This suggests that about A$1.35 billion (£707 million) of the roughly A$1.73 billion that UNSW earned that year from foreign students – about 35 per cent of its entire revenue – came from Chinese families.

That estimate could be conservative, given that Chinese students often favour relatively expensive courses such as postgraduate business degrees.

Seventy-seven per cent of overseas students at the nearby University of Sydney were from China, providing an estimated A$1.33 billion, or 34 per cent, of revenue.

The pair’s earnings from Chinese students have soared over the past decade, despite repeated warnings about overreliance on individual nationalities.

In 2017, Chinese students’ contributions to overall income at UNSW and Sydney were estimated at 19 per cent and 16 per cent, respectively. Since then, both universities’ earnings from Chinese tuition fees have almost quadrupled.

The report from the NSW Auditor-General’s Office again warns against overdependence. “A high level of reliance on student revenue from a limited number of key source countries of origin continues to pose a concentration risk for NSW universities,” it says.

“Unexpected shifts in demand arising from changes in the geopolitical or geo-economic landscape, or changes to visa approval rates or travel restrictions, can impact revenue, operating results and cash flow.”

Chinese demand for Antipodean higher education appears to have declined sharply this year. Between January and April, the number of applications lodged in China for visas to study at degree level in Australia was about 32 per cent lower than in the equivalent periods of 2025, 2024 and 2023.

China expert Angela Lehmann said that this reflected a wider trend. “There’s been a 20 per cent reduction globally in Chinese students studying abroad since 2019,” Lehmann told a webinar hosted by the Australia-China Relations Institute. Economic pressures, unfavourable visa policies abroad and the improving calibre of universities at home had contributed to the trend.

Lehmann, senior director of global engagement and policy at Universities Australia, said that China was a major international education competitor as well as a source market. “It wants to see itself as a host of talent, not just a sender of talent,” she said. “This…mass market of Chinese university students is shifting into a new stage.”

Notwithstanding this trend, UNSW’s international education earnings soared by 22 per cent last year and by 61 per cent in 2024, buoyed by ranking improvements. It said the additional income was sorely needed. “For every dollar UNSW receives in research grants, it must find approximately A$1.50 to fully fund the research it does,” a spokesman said.

He said that international earnings were also used to address a significant “backlog” in facilities upgrades and to bridge the “structural funding gap” for domestic students.

NSW universities’ costs in educating domestic students are about 50 per cent higher than their earnings from fees and teaching grants, according to the auditor-general’s report. It said the average “operating cost” per domestic student was A$37,868, against average revenue of A$25,213.

john.ross@timeshighereducation.com