School of Regulation and Global Governance (RegNet)

Dr Dirk Van Der Kley and Dr Benjamin Herscovitch’s National Security College Policy Options Paper, Protecting Education Exports: Minimising the damage of China’s future economic coercion reached a total potential audience of more than 1.4 million* when it was first published in May 2021. The paper, which was featured extensively online and was highlighted in The Australian, AFR and Canberra Times, as well as international media, focuses on how Australia can protect its education exports from potential economic coercion from China, sharing specific policy recommendations.

In this interview, Dirk and Ben, Research Fellows in the School of Regulation and Global Governance (RegNet), reflect on the paper and share with us their involvement in the ANU Geoeconomics Working Group.

What prompted you to write this paper and do you think the paper came out at a crucial time for our education sector?

We wrote this paper because Australia needs to be prepared for the possibility that the Chinese government will further discourage Chinese students from studying here. In April 2020, China’s Ambassador to Australia explicitly mentioned four exports – wine, beef, tourism, and education – as ones that Chinese consumers might choose to avoid.

Since then, tariffs, duties, and regulatory restrictions have been placed on Australian wine and beef entering the Chinese market. However, the COVID-19 pandemic has reduced tourism flows and student enrolments without Beijing’s intervention.

But with COVID-19 restrictions slowly easing and the Australia-China relationship worse than ever, there are logical reasons why education would be the next target of China’s economic coercion. It is the last remaining Australian export to China valued over $10 billion annually that Beijing can target without noticeably harming itself economically.

The paper talks about the threat to Australia’s education sector. How is this different to what China has done to other Australian industries and how concerned should we be?

China has launched politically motivated trade restrictions against at least nine Australian exports since May 2020. In some cases, such as coal and barley, these trade restrictions have caused Australian exports to China to collapse to zero.

So far, China hasn’t directed large-scale trade restrictions against Australia’s education exports. But in February this year, reports emerged of education agents in some smaller Chinese cities being discouraged from promoting Australia as an education destination.

It is difficult to know if this will spread further. But, if there was a significant drop in students from China, the revenue and research loss would be impossible to fully replace through other international markets. This is because China is by far the largest source of globally mobile students. It would also be costly for the government to step in and fully fund the gap.

The paper has received extensive media coverage and is widely distributed across government department and agencies. How do you think your paper will influence current government policies and relationship with China?

The hope is that the paper will provide the Australian government with a menu of additional policy options to choose from as they devise new strategies to safeguard Australia’s education exports during these challenging economic and geopolitical times.

Education is a critical export for the Australian economy—our fourth largest overall and our largest services export by a wide margin. There is therefore a strong pragmatic economic rationale for the government to consider new policy initiatives to make this export industry more resilient in the face of the threat of economic coercion.

The proposals that we put forward in our paper are cost-effective and actionable policy options that the government can implement quickly. They will help diversify education exports should China coerce Australia in this sector. But if the bilateral relationship improves, these policy options do not prevent education exports to China.

Tell us about the interdisciplinary work that you are involved in at the ANU Geoeconomics Working Group.

The Geoeconomics Working Group collaborates with ANU researchers from many academic backgrounds. As well as working on projects across RegNet, members of the Geoeconomics Working Group regularly deliver National Security College courses and pursue joint projects with researchers from other CAP schools and around ANU, including international relations theorists and area studies specialists.

Dirk has been convening the Geoeconomics Working Group’s seminar series for the past nine months and I’ll soon be taking over the stewardship from him. This seminar series draws in participants from across ANU on inherently interdisciplinary geoeconomic topics, such as corporate sector-state relations, the resurgence of industrial policy, tech decoupling, and a broad range of related issues.

As an interdisciplinary and collaborative effort to analyse and debate emerging geoeconomic issues, the seminar series features a diverse range of local and international speakers. It also brings together researchers and practitioners from a wide array of professional and disciplinary backgrounds.

Given the recent worsening relationship with China, does the working group provide advice or consultation to government departments and business on this matter?

Members of the Geoeconomics Working Group frequently engage with both government departments and agencies and across the Australia business community.

Under a grant provided by the National Foundation for Australia China Relations, members of the Geoeconomics Working Group are convening an ongoing series of executive workshops for Australian business leaders. These workshops cover emerging geoeconomic trends globally and their implications for Australian businesses.

Meanwhile, under a grant provided by the Australian Department of Defence, members of the Geoeconomics Working Group are exploring frameworks for understanding and evaluating the cross-cutting risks and opportunities at the nexus of economics, security, and technology.

The Geoeconomics Working Group also reaches out to government departments and agencies with its regular seminar series, with Australian public servants often participating.

Read the full paper here.

*Data from ANU Media and includes total online audience and total print circulation.

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Dr Benjamin Herscovitch is a Research Fellow at the ANU’s School of Regulation and Global Governance, where he focuses on China’s economic statecraft and Australia-China relations. He is a member of the ANU Working Group on Geoeconomics. Prior to joining RegNet, Benjamin was an analyst and policy officer in the Department of Defence, specialising in China’s external policy and Australia’s defence diplomacy.

Dr Dirk van der Kley is a Research Fellow at the School of Regulation and Global Governance (RegNet) who specialises on the theory of geoeconomics, international economic sanctions, PRC international economic policy and the effect of industrial policy on geopolitics. Dirk is a member of the ANU Working Group on Geoeconomics. He is also a board member for the Oxus Society for Central Asian Affairs.