US-China trade war could cost unis $1.15bn over 10 years

Researchers from the Center for Global Development at the University of California San Diego have found that one quarter of the growth in Chinese students in the US between 2004 and 2014 can be attributed to the lower tariffs that followed China joining the World Trade Organization in 2001.

“Money is no longer flowing to China, which means those students will no longer be able to come to the US”

Trade liberalisation increased the wealth of upper-income families, who were then able to invest in housing and use their wealth to send their children to study abroad.

“The report is really trying to understand the link between trade with China and the flow of students,” Gaurav Khanna, assistant professor of economics at the UC San Diego School of Global Policy and Strategy and one of the report’s authors, told The PIE News.

“We’ve been having this trade war for the last couple of years, so we’re looking at how that’s going to affect the flow of students moving forward.”

Their findings suggest that 8% of revenue from educational exports to China will be lost.

The US introduced 25% duties on goods coming from China in 2018 and both countries have spent the last two years flinging additional charges at the other.

“The trade war means that money is no longer flowing to China, which means those students will no longer be able to come to the US, which will have a chilling effect on US universities,” Khanna continued.

He further argued that universities in the US have little choice but retain and attract Chinese students, the numbers of whom arriving in the US have been slowing.

However, Covid-19 and government attempts to restrict entry for students have hurt the US’ reputation.

Institutions also face competition from places like the UK, Canada and Australia, while domestic universities in China have seen significant investment under the 211 and 985 university projects.

“Universities have been trying to diversify their portfolio by making forays into other big countries like India. But India just doesn’t have the kind of purchasing power that China has,” he continued.

“US universities, especially public universities, really need students from China, particularly as state governments are cutting funding. At a time of recession, the first thing in the state budget to go is higher education. They can’t cut Medicaid or roads or K-12,” he said.

“And now there’s a recession again. It’s only expected that states will cut money again and so universities will need more revenue from abroad.”