A Sign of Strength or Weakness?

In 1995, a year after my return to New Zealand to take up the Vice-Chancellorship of Waikato University, I was invited to lead a delegation from the university to visit universities in China – the first such invitation to be issued.

Seventeen years earlier, in 1978, I had been a member of a British parliamentary delegation which had been the first westerners to visit China since the fall of the Gang of Four. It was, I believe, that earlier contact that led to my invitation in 1995.

The contrast in what I saw on the two visits was startling. On the earlier visit, the only shops had been Friendship Stores, reserved for foreigners, the only transport for ordinary Chinese was by cart and bicycle, and the only colour –amongst a sea of Mao tunics – was the red of Party banners. But by 1995, China was clearly a country on the move.

My 1995 visit was the first of many such visits I paid to China over the coming years. My association with that wonderful country and civilisation led to the first institution-to-institution arrangements between New Zealand and Chinese universities, and ushered in a huge expansion in the numbers of Chinese students studying at New Zealand tertiary institutions.

Since those days, providing tertiary education to students from overseas – not just China, but India, the Americas, the Middle East and may others – has become big business for New Zealand. In terms of foreign exchange earnings – at over $3 billion each year – export education is more than twice as valuable to our economy as the wine industry. There is scarcely a single tertiary education institution in this country that does not rely to a large extent on the income from foreign students to allow them to balance their books.

Foreign students bring not only valuable funding, but also a range of benefits to this country, not least a greater understanding for our own students of other cultures and a wider range of contacts, both personal and institutional, with students who are potential leaders in their own countries.

The positive net inflow to this country of people from overseas is substantially accounted for by the numbers of foreign students who now come to us for their education. This success is rightly a cause for self-congratulation. Our ability to compete with other western providers for the custom of foreign students is testament to the quality of our education. So, what is there to cavil at?

The answer is that it is all a matter of balance. Each institution will have some idea of what is an optimal proportion of foreign students in any given class or course, although opinions as to what that might be will often vary considerably. And the calculation is not made any easier by the strong tendency of overseas students to focus on courses in particular disciplines, such as business management, so that what might seem to be an acceptable proportion for the institution as a whole might conceal a concentration of foreign students in just a few areas.

A class that has a high proportion of students from overseas, particularly those for whom English is a second language, may not serve the interests of domestic students as well as it should – and even the overseas students themselves may feel that it is not quite the New Zealand education they had bargained for.

And the institutions themselves may find that there is a downside. There are considerable and additional costs involved in attracting foreign students and in looking after them properly while they are here. The costs of marketing overseas, paying commissions to agents, providing appropriate facilities, accommodation, support and counselling in respect of both academic and personal matters, will all mean that the fee income earned will often be substantially offset by those outlays.

There is also a world of difference between treating overseas fee income as a useful supplement that can be applied to discretionary purposes that might not otherwise be afforded, and the situation that most tertiary institutions now find themselves in – that is, an increasing reliance on that income to keep their heads above water.

The truth is that our tertiary institutions have, by international standards, been underfunded for many years – and the sinking lid is still being applied year after year. In typically Kiwi fashion, we expect outcomes of international standard to be produced from funding that is only two-thirds or – in some cases – only half of that provided overseas. That disparity is bound to tell eventually – and once it becomes apparent, it will inevitably reduce the attraction of a New Zealand education in overseas markets.

Looked at in that light, our income from foreign students is better regarded as a sticking plaster or as a life belt – a cry for help, rather than a badge of success. It represents another casualty in the drive to cut public spending at any cost – requiring our tertiary institutions to see themselves as commercial and trading operations, with a year-to year time horizon, rather than as focusing primarily on providing the best possible education for the communities they serve.

Bryan Gould

24 November 2015