American universities could be affected by trade dispute with China

China 24

One area potentially threatened by the ongoing trade dispute between the U.S. and China is higher education – specifically U.S. colleges.

An estimated 360,000 Chinese students attend US universities, a market worth some $15 billion. But U.S. authorities have sought to restrict the numbers over security and economic reasons.

CGTN’s Dan Williams explains.

American universities draw interest from around the world. According to the U.S. Department of Commerce, nearly 1.1 million international students studied in the US in the 2017-18 school year – generating $45 billion. Around a third of those students are from China. But that relationship is under threat.

Chinese students have found themselves in the middle of increased tensions between the U.S. and China – fueled in large part by the ongoing trade war.

A tightening of American visa restrictions has seen denials and delays increase, making it difficult for Chinese students to complete their studies.

There will no doubt be a number of universities examining their potential exposure if the number of Chinese students was to suddenly fall. And some may choose to follow the example of the University of Illinois at Urbana Champaign and take out an insurance policy.

The University of Illinois at Urbana Champaign is home to some 5,800 Chinese students.

Eight hundred of those students attend the University’s Gies College of Business, accounting for a fifth of the school’s income. Realizing the risk, Jeff Brown, the dean of the school, took out an insurance policy.

“In the event of visa restrictions, student visas were canceled or in the event of a global health outbreak and they don’t let students travel, we would be reimbursed for our losses up to a one-time payment of sixty million dollars,” Brown said. “Not that this would permanently solve the problem but it would buy us time so that we wouldn’t find ourselves having to react in the moment.”

That insurance policy, costing a premium of $424,000 annually, expires next year.

Although the college wants to renew, there are concerns the premiums could become even more expensive, given the escalating trade dispute.

There are a number of factors that could see China student numbers in the U.S. fall, not least rising tuition costs.

But the current trade tensions between the two countries could have the impact of quickening the decline.