Beijing may have a secret weapon to wield beyond soybeans and semiconductors as tariffs escalate and tensions rise between the United States and China: the large contingent of Chinese students studying in American schools.
The more than 360,000 Chinese students in the 2017-2018 academic year made up one-third of all international enrollments at U.S. universities, and they typically paid full tuition rates to revenue-hungry schools.
As President Trump and Chinese President Xi Jinping haggle over a new trade arrangement, colleges at the University of Illinois at Urbana-Champaign (IUC) have taken the extraordinary step of buying insurance.
“As negotiators on both sides seek leverage on each other, it’s likely that higher education will end up in the crosshairs,” Paul Musgrave, a political science professor at the University of Massachusetts Amherst, wrote recently in Foreign Policy.com.
Mr. Musgrave told The Washington Times that losing Chinese students may not be fatal to universities but could put a severe strain on operations.
“There’s been a big shift toward recruiting international students and using international-student tuition dollars to help sustain university and college education,” said Mr. Musgrave. “If that were to disappear or even taper off sharply, that would be a huge hit to the sector.”
IUC is the largest single destination for Chinese students, and an abrupt loss of those students could cost the school close to $500,000 in tuition annually. In 2017, the business and engineering colleges at the university bought an insurance policy to protect them from a mass decamping of Chinese students.
Jeffrey R. Brown, dean of the Gies College of Business, told the Times Higher Education that the insurance policy could be used for “visa restrictions, a pandemic, a trade war — something like that that was outside our control.”
The University of Southern California, the second-largest destination for Chinese students behind IUC, said that the loss of students would be felt acutely at the graduate level, where 17% of all international students last fall came from China.
Tim Brunold, USC dean of admissions, told The Washington Times that losing Chinese students would not be felt financially so much as it would be a loss for the campus environment.
“We would see the hit much more in the makeup and diversity of our student body,” he said. “If we saw any flow of students no longer coming, that would change the look and feel on campus.”
Mr. Brunold said he has not heard any talk of a USC insurance policy to protect the budget in the event that Chinese enrollment declines.
Colleges and universities are considered crown jewels of the American education system and potent draws for scholars and researchers around the world. But economists also see the system as something else: a major trade asset.
The Department of Commerce counts the foreign student population as a kind of economic export for the U.S., generating some $45 billion annually. The 1.1 million international students studying in the U.S. in 2017-2018 made up the largest such population in the world. Foreign students not only pay tuition but also spend on housing, food, futons and other living supplies for their time in the U.S.
But the United States could sanction Chinese students and perhaps already has. In the past year, visa policies have changed and visa renewals have been delayed. Those changes sparked complaints from Beijing.
Xu Yongji, deputy director for the Department of International Cooperation and Exchanges for China’s Ministry of Education, said in June, “The U.S. has canceled and reexamined visas for Chinese citizens working in natural sciences and social sciences on the excuse of counterspying.”
U.S. officials have concerns of their own about the impact of large numbers of Chinese students, many doing advanced technical and engineering research.
Joseph Morosco, assistant director for the National Counterintelligence and Security Center, called China one of the nation’s “most formidable economic competitors.”
“We are particularly concerned about foreign academics and researchers in advanced programs at U.S. academic institutions and National Laboratories who have access to, and are seeking to acquire, sensitive information and technology,” Mr. Morosco told the Senate Judiciary Committee at a hearing last year.
Some schools appear to share the administration’s concerns. The Massachusetts Institute of Technology, which attracts large numbers of foreign students for its graduate research program, issued a statement in April that highlighted risks to intellectual property, national security and data security for projects in collaboration with countries of “elevated risk.”
“Most recently we have determined that engagements with certain countries — currently China, Russia and Saudi Arabia — merit additional faculty and administrative review beyond the usual evaluations that all international projects receive,” said Maria T. Zuber, vice president of research at MIT.
MIT also announced that it was not renewing existing contracts or signing any new deals with Chinese high-tech giant Huawei, which faces heavy sanctions from the Trump administration for its suspected close ties to China’s military and intelligence agencies.
Welcomed at Yale
By contrast, Yale University President Peter Salovey affirmed in an open letter in May the school’s “steadfast commitment” to students and scholars from around the world.
“In recent weeks, tensions in United States-China relations and increased scrutiny of academic exchanges have added to a sense of unease among many international students,” said Mr. Salovey, noting that the Ivy League school has 2,800 foreign students and 2,700 “international scholars.”
“Openness — a key to the extraordinary success of America’s great research universities — must remain a hallmark of Yale,” he wrote.
Some say the threat of a mass withdrawal of Chinese nationals studying in the U.S. is a hollow threat that could hurt Beijing more than Washington. Many Chinese are attracted to the prestige, rigor and unparalleled variety of choices offered by the American higher education market.
“Capacity matters,” Allan Goodman, president of the Institute of International Education, told The Atlantic in 2015. “Other countries can’t accommodate all their students. India and China have trouble finding seats for all their qualified students.”
Even though the flow of Chinese students into U.S. universities has slowed in recent years, the use of Chinese students as a bargaining chip has not surfaced in public discussions about the state of the trade talks. Mr. Trump said at the Group of 20 summit in Japan last week that he was halting new tariffs on some $300 billion in Chinese exports as the two sides return to the bargaining table to try to hash out a deal.
But Mr. Musgrave told The Times that he suspects China’s leadership may be tempted to play the student card if the talks stall because “they have the most potential leverage to exploit and the greatest need for additional bargaining chips in trade talks.”