England’s Universities Warned Over Financial Reliance on Chinese Students and Confucius Institutes

A general view of a graduation ceremony in England on Oct. 19, 2015. Chris Radburn/PA Media

Over-reliance on Chinese and other international students has put England’s universities at financial risk, a higher education regulator warned on Thursday.

The Office for Students (OfS) said it has written to high-risk universities, asking them to lay out contingency plans to protect their financial sustainability.

It comes as a China-focus think tank said it’s writing to regulators and universities that are hosting Chinese state-sponsored Confucius Institutes to ensure a new law will be enforced if the institutes failed to protect freedom of speech and academic freedom.

Over-Reliance on Foreign Students a ‘Key Risk’

In a report (pdf) on the financial sustainability of higher education providers in England, the OfS said one of the key risks the providers face is reliance on international student recruitment, “particularly from a single country such as China.”

The number of new Indian students has begun outpacing Chinese students in the past year, both in the UK and in other English-speaking countries, as universities have sought to diversify their income, but the OfS said its latest analysis shows the sector and some providers in particular, continue to rely on fees from Chinese students.

Compared to teaching- or specialist-intensive providers, large research-intensive providers recruit “significant numbers of overseas students, particularly from China, and often on one-year postgraduate taught masters courses,” the report said.

The number of First year non-UK domiciled students by domicile 2006/07 to 2021/22. Data Source: HESA. Contains information licensed under Creative Commons Attribution 4.0 International Licence

According to The Times of London’s analysis of data from the Higher Education Statistics Agency, 144 British universities had students from China in the year 2020/21, ranging from 0.03 percent of all students to almost half (45.64 percent) of all students, and members of the prestigious Russel Group represented 11 of the 15 universities which had the highest percentage of students from China.

The OfS also said a number of providers have been “forecasting significant growth in overseas student numbers.

It warned about the potential “significant impact” of “any event that reduces the flow of such students,” such as a changing geopolitical environment, and requested high-risk providers to put contingency plans in place.

Student fees are only part of the sources of university income that come from China. Information gathered through Freedom of Information requests by The Epoch Times previously found “a staggering number of UK universities” have been “receiving millions of pounds” from Chinese donors between 2018 and 2022, including companies blacklisted by other countries over national security fears, such as the telecommunication giant Huawei.

Confucius Institutes

The OfS report came a week after the passage of a new law, which think tank UK–China Transparency said is likely to have given regulators sufficient powers to shut down Confucius Institutes in England.

UK-China Transparency said on Thursday that the organisation will write to university governing bodies, the OfS, Universities UK, and the Equality and Human Rights Commission, to share their findings and “ensure the law is enforced.”

It will also provide data and information to “academics and students who want to see action,” a Twitter post from the think tank said.

Confucius Institutes are Chinese state-sponsored organisations that run Mandarin courses and facilitate cultural events around the world, but they have also been accused of censoring speech, discriminating against Chinese ethnic minorities, propagating communist ideology, and exerting undue influence on their host institutions.

There are 30 Confucius Institutes in the UK, the highest number in the world after most U.S. branches were shut down following the Trump administration’s decision to designate the Confucius Institute U.S. Center as a Foreign Mission.

Prime Minister Rishi Sunak departs 10 Downing Street to attend Prime Minister's Questions at the Houses of Parliament, in London, on March 15, 2023. PA

Downing Street on Tuesday confirmed Prime Minister Rishi Sunak has dropped a pledge he had made during his leadership campaign to close off Confucius Institutes in the UK, but Sam Dunning, director of UK-China Transparency, told the Epoch Times that the new Higher Education (Freedom of Speech) Act is likely enough to shut down institutes in England that fail to protect freedom of speech.

The think tank has previously found evidence that the institutes’ staff from China have been “recruited on the basis of their ability to ‘enforce CCP discipline’ abroad, obliging them to interfere in university life and posing a threat to anyone with citizenship or family in China,” which is “an egregious systematic threat to academic freedom and the safety of university members in the UK,” Dunning said.

In a new paper (pdf) published on Thursday, UK–China Transparency said measures in the new law on freedom of speech “have a strong bearing on the Confucius Institutes programme.”

Under the new law, universities have to take steps to protect the freedom of speech and academic freedom of all members, students, and staff, the report said.

The OfS is also required to monitor foreign funding of universities and “assess the threat presented by arrangements involving overseas funding to academic freedom and freedom of speech,” it added.

Universities that fail to protect freedom of speech and academic freedom would be in breach of the conditions of registration, therefore, “the Act gives the OfS and its yet-to-be-appointed Director for Freedom of Speech and Academic Freedom a clear legal responsibility to ensure English universities comply with the law and cease to operate Confucius Institutes illegally,” the report said.

Patricia Devlin contributed to this report.