Credit risk concerns raised over the large number of Chinese citizens studying at Canadian universities are exaggerated, say UBC experts on China.
In light of recent tensions between Canada and China, a February report from Moody’s Investors Service said Canadian universities would face significant financial repercussions if the Chinese government decided to ban or discourage its citizens from studying in Canada.
Relations between the two countries soured after Huawei chief financial officer Meng Wanzhou was arrested in Vancouver for extradition to the United States in early December. The US has accused Meng of violating international sanctions against Iran.
On Friday, the Canadian government issued an approval for Meng’s extradition hearing to proceed. China responded with a swift condemnation of the decision, calling it “a political persecution.”
UBC was named by Moody’s as one of the “most exposed” schools “given [its] high concentration of Chinese students and [its] revenue dependence on international tuition revenue.”
The report also referenced Saudi Arabia’s attempt last summer to withdraw all Saudi citizens studying in Canada on government scholarships, after the Canadian government criticized the kingdom for its treatment of human rights activists.
But Dr. Yves Tiberghien, a UBC political science professor who specializes in Chinese politics, argues that the Saudi case was different.
Not only is it unlikely China would institute such a policy, Tiberghien says, but it would be very challenging for the country to prevent its citizens from coming to Canada to study.
“Most undergrad students from China come with personal or family funding and are not relying on government funding,” he said.
Tiberghien added that such a restrictive policy would also be a hard political sell to the Chinese public.
“The freedom to send children abroad to study has become a broadly accepted norm in China among the middle class, and it would be hard to roll back,” said Tiberghien.
The Saudi government has struggled to implement its withdrawal policy. Out of the more than 15,000 Saudi citizens studying in Canada last summer, it appears far fewer students left than was initially anticipated when Saudi Arabia announced the withdrawal. Last month, the Globe and Mail reported that the Saudi student population at UBC has dropped by 34 per cent, from 131 to 86.
The Moody’s report did not discuss how the Chinese government might effectively prevent its citizens from studying at Canadian universities.
Dr. Paul Evans, a professor at the School of Global Affairs and Public Policy, believes the Chinese government could discourage its citizens from attending Canadian schools by including negative portrayals of Canada in state media, posting travel advisories and restricting university recruiters.
Following her arrest, Chinese state media has portrayed Canada’s treatment of Meng in a harsh light, but UBC says it hasn’t yet noticed a drop in Chinese applicants compared to previous years at this point in time.
Diversifying international enrolment
Evans acknowledged that a sudden loss of Chinese students would cause serious financial harm to Canadian universities, especially smaller schools — but he agrees with Tiberghien.
“It is very unlikely in the short term that there will be anything like the Saudi Arabian blanket immediate withdrawal of students,” he said.
“Unless something goes dramatically wrong, we don’t need to worry deeply about the tap being turned off.”
However, Evans expects the number of Chinese citizens studying in Canada to soon decline after years of continuous growth.
“What we do need to look at is the long-term likelihood of a reduced number of Chinese students here because of the increasing quality of programs inside China itself,” he said. “I think we’re at the peak market for Chinese students studying overseas.”
During the 2017/18 school year, Chinese students represented approximately 35 per cent of UBC’s international student population, by far the largest share from any one country.
Similar to Evans, Tiberghien expects the number of Chinese students at UBC to remain strong for now, before tapering off in “maybe about 10 years” due to the strength of universities at home as well as an ageing Chinese population.
Both professors emphasized the value of fostering a diverse student body, for financial and educational purposes.
“Diversification may be prudent in light of lessening demand from China, and it may be valuable in terms of optimal mix of international students on our campus,” said Evans.
UBC declined to speculate on the prospect of China restricting study in Canada.
“The university is aware of the situation between Canada and China,” said Vice Provost and Associate Vice-President Enrolment and Academic Facilities Pam Ratner in a statement to The Ubyssey.
“We have many strategies in place to support robust international enrolment, which include monitoring economic and demographic trends worldwide. However, we will not speculate about any potential impact on our international student enrolment at this time.”
This article has been updated to correct the time of the report’s release.