ANY WAR WITH CHINA WILL ARRIVE WITH COSTS
by Keith Salter
This article examines what might occur within the Australian tertiary education sector should Australia pursue a war with China.
In the scenario that Australia embarks upon a war with China, whether that be a shooting war or a series of sea piracy acts, we should expect a considered response from China. Any war with China will arrive with costs for Australians. One such cost may be long term damage to profitability due to a withdrawal of Chinese investment.
Once war breaks out the Chinese government will ban future students from travelling to Australia to take up places at educational institutions. China would also recall its citizens studying abroad in Australia just as it did during the pandemic that occurred between 2020 and 2022. These two actions would negatively affect Australian education institutions by significantly reducing their income.
Chinese student enrolments constitute nearly 20% of the international student market within Australia.
Would Australian universities, TAFE, and specialist colleges remain solvent if China no longer participated in this important area of the Australian economy? Australian education providers draw between 15% and 40% of their total annual income from tertiary study fees paid by the international student. Working with the larger figure of 40%, a loss of one fifth would cost an education provider around 8% of their annual income. Should any international crisis such as a war in the South China Sea erupt and then unfold over multiple years, these losses would compound, severely undermining business profitability.
“Education exports are currently Australia’s fourth largest category of export, at approximately $50 billion in 2023/24.”
Reserve Bank of Australia, July 2025
Assuming the experience of the pandemic and its aftermath may be repeated is erroneous. If Australia goes to war against our Chinese neighbour, then we can forget about a return to the good ol’ days. Any animosity, hurt, and rage will not dissipate quickly from the Chinese side postwar.
In any postwar scenario, the Chinese government may persist with a ban on travel to Australia. And potential tertiary students from China may simply wish to avoid travelling to, and then living in, a former belligerent nation. In the aftermath of war, we should not expect Chinese students to seek out Australia as a destination for education.
The possibility for international unity against any Australian belligerence within the Pacific Rim is an additional consideration. What if other nations opt to support China in any dispute with Australia? Imagine an Asia-wide ban, perhaps in the form of a “temporary halt” or “industry reassessment,” that curtails student arrivals for a prolonged period. We should bear in mind that India, like China, also accounts for nearly 20% of international students currently studying in Australia.
Therefore, if both China and India halted all student arrivals from landing in Australia, the local tertiary education industry would lose around 40% of international enrolments. If other nations observed value in such a move or simply sought to demonstrate an objection to the emergence of a new shooting war so close to home, this number could climb above 50%.
In such a scenario, the Australian education industry would suffer a partial collapse. Universities, including the top brand names, which for many years have relied, perhaps disproportionately, upon income from international students, would be compelled to readjust to the prevailing circumstances of much less income and much tighter budgets. Senior university management will axe teaching faculties, administration departments, and support services. Across the nation, the industry will experience widespread job losses whilst senior university management continue to rake in six figure salaries.
CUE TUMBLEWEEDS | EMPTY SEATS & GHOST TOWN CAMPUSES
War with China will cause large financial losses for Australian universities.
Specialist colleges, often identified as institutes within the Australian marketplace, will not fare any better. Operating with smaller budgets and with limited government funding, many did not survive the pandemic. Those that did and those that have emerged since will face the same tough challenges as our universities should the “international student money tap” be turned off.
TAFE may be the exception due to its funding arrangements with government and its established role in technical and further education provided at much lower cost than university.
In sum, a Chinese withdrawal from a single Australian industry sector could have serious and long-lasting effects upon Australia’s ability to maintain a fully functional tertiary education industry. Such a withdrawal will certainly create a fiscal “black hole” for universities and education providers reliant on income derived from international students.
Should other nations imitate or align in this practice of withdrawal, the tertiary education industry will experience a rapid decline in profitability. Which will mean the closure of many educational institutions, mass sackings of staff, and the disappearance of an industry that creates our scientists, economists, doctors, historians, and teachers.
Source material:
Punk Human 
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