Page:ISC-China.pdf/114

CHINA (Taiwanese independence, Tibetan independence, Xinjiang separatists, the Chinese democracy movement and the Falun Gong).

UK universities are reliant on income from students in order to operate. A decade ago, university funding comprised 72% public funding, with student fees providing 23%, but this has since been reversed, with student fees now making up 73% of funding. (There are other sources of income available to UK universities such as residences, catering, investments and endowments—but fees are the most significant revenue stream. ) In recent years, the number of 'home' students (who have their fees capped) has remained static whilst the number of overseas students has increased. Figures from February 2021 show that, in 2018/19, international (non-European Union) students accounted for 14% of UK university students, and their fees accounted for 14.4% of the total income of all UK universities.

The fees paid by international students account for a large—and increasing—share of university income. The profit universities are able to make from teaching international students helps to fund loss-making activities, such as research. Chinese students make up the largest overseas contingent of students in UK universities. Although estimates vary, it is believed that, in 2019, there were more than 120,000 Chinese students—more in the UK than in the rest of Europe combined. China sends five times as many students to the UK as any other country does. To put it in perspective, reporting in 2020 showed that there were only 27,000 students from India, the next largest source of international students in the UK.

In financial terms, it was estimated that, in 2017/18, Chinese students were responsible for generating almost £600m, which makes up a very significant proportion of universities' income. HMG evidence provided in September 2020 noted that the Department for Education (DfE) was working on "geographically diversifying" the recruitment of foreign students —presumably to counteract the current over-reliance on income from Chinese students.

While the numbers are clearly significant, the question is whether, and if so how, China is actively using this 'buying power' as leverage. An article in The Times in 2019 reported that the intelligence Agencies were "concerned that a reliance on Chinese money and students, particularly postgraduates paying up to £50,000 a year in fees, makes some universities particularly vulnerable [to influence and interference by the Chinese government]". During this Inquiry, we were told that "China likely seeks to exert influence