Australia Looks to Tighten Government Oversight of University Agreements With China

Universities and other tiers of government that have entered into commercial arrangements or agreed to partnerships with China now face the prospect of review by the Australian federal government. New laws to that end, unveiled by the Australian prime minister, are under discussion.

The Australian Parliament’s Foreign Affairs, Defense and Trade Legislation Committee is presently considering two bills that are designed to counter foreign interference and influence. The crux of the debate has been focused on the mechanism of federal review into foreign agreements involving public entities, such as universities, and state and territory governments. The new mechanism allows for the federal government to proactively review engagements by these entities that may adversely impact national security.

The review comes at a time when research from the Australia-China Relations Institute shows that China is set to surpass the United States as the leading research partner of Australian higher education. The resulting Australian government proposal has led to a flurry of lobbying from Australia’s university sector. Some of the more interesting submissions even suggested that the government should compensate universities for potential losses during or after the process. The discussion around these powers has been put forward by different stakeholders such as the Group of 8, Universities Australia, and the Australian Capital Territory (ACT) Government.

One of the few uncontested elements of the dispute is that the commonwealth has the power to oversee these agreements. Which means, in turn, that the government already has the power to cancel these agreements; it simply has not acted on the power in the past.

The powers being described within the bill are to be implemented by the Department of Foreign Affairs and Trade (DFAT). Equipping DFAT with an arm designed to help universities and other arms of local government to understand China will in hindsight seem a solid decision.

Much of the debate has focused on university agreements with China’s defense oriented universities and the Victorian agreement with China on the Belt and Road Initiative (BRI). However, the problem with framing the debate through the lens of specific cases is that it leads to an overly ad hoc approach, focused on a set of agreements that have attracted a range of scandals.

Creating a standard for such agreements, building a capability to review them, and supporting institutions to build productive relationships that don’t harm the national interest must remain the primary aim. It is certainly the case that these institutions do not seem to be adequately able to manage these engagements themselves.

This is clear at the state level with a lack of due diligence around China Railway Rolling Stock Corporation’s links to Uyghur forced labor programs (CRRC is contracted to supply Sydney with train cars) and the University of Queensland’s handling of the discussions around its Confucius Institute.

State governments and universities lack the capabilities to do the level of due diligence necessary to defend national security interests. The funding agreement in the latest budget shows that the commonwealth itself also presently lacks that capability. The lack of a voice for DFAT at the national security table has been repeatedly called out by some of Australia’s most China friendly voices.

The budget builds a review capability within DFAT, which seems to be a good way to strengthen that department’s national security muscles and voice. DFAT is also one of the most collaborative institutions within Australia. The department’s specialist capabilities around the building of foreign partnerships make a strong case for transferring this knowhow to the government’s latest priorities.

One of the more articulate voices critiquing the proposed bill is that of Universities Australia. Many of the issues raised by their submissions relate to the potential burden on institutions. However, the recent budget announcement of the allocation of funds to DFAT should speak to some of their issues.

Universities Australia also argued that the proposed law would create a disincentive to international partners and funders. This line of reasoning is on slightly less solid ground. It’s hard to imagine a funding agreement with Yale or Cambridge is likely to be deterred by the fact that it sits within scope of a government power that has been active since Federation. However, if it is a deterrent to an agreement with a Chinese institution linked to their defense and intelligence sector, then that’s probably a good thing. Deterrence under this new system would be a feature, not a bug.