Philipp Ivanov is an education consultant, formerly with the University of Sydney Research Institute for Asia and the Pacific. This post is part of the New Voices series.

In May this year, China's Suzhou University announced plans to open a campus in Laos — the first overseas presence by a Chinese higher education institution, and the first international campus in Laos. The development was described as yet another symbol of China's growing international ambitions and drive to export its development model. It's also a milestone in the 'quiet revolution' that is China's higher education reform, with big implications for Australia.

China's move into the cross-border provision of higher education should not only be seen as a looming threat to Australia's $15 billion international education industry. China's push is also an opportunity for Australia to capitalise on its existing education-supplier status, while re-calibrating its education relations with China towards a more comprehensive partnership. Australia provides higher education to over 126,000 Chinese students (26% of all overseas students in Australia). Indirectly, this makes Australia a stakeholder in Chinese higher education.

China went from under 1 million graduates in 1998 to over 6 million in 2010, but this will not necessarily mean a decline in the number of Chinese students pursuing overseas education. The OECD predicts that, by 2025, China's middle class population will reach 500 million. A large percentage of this group will seek to enter higher education. An insufficient number of university places in China, particularly in the elite and second-tier institutions, coupled with quality issues and good international career and immigration prospects, will ensure Chinese students continue to pursue overseas studies. 

Australia's ability to monitor and respond to these changes in demand and capacity is crucial for growing our third largest export industry.

The internationalisation component of China's higher education reform is focused primarily on the recruitment of international students and staff to China and international research collaborations.

The move to cross-border education in Laos is likely to be a political and commercial venture, aiming to strengthen Sino-Laotian relations. Similar to the development of Confucius Institutes, it can also be used to test the capacity of Chinese institutions (and government) to operate an offshore education enterprise. But given major internal problems facing the Chinese higher education sector, particularly in quality, it is improbable that the focus of the reforms will move to building offshore campuses.

What is more likely, and more central for Australia, is the continuous effort to internationalise Chinese universities. From 1999 to 2010, the number of international students enrolled in Chinese universities more than doubled, and reached a record of 260,000 in 2010, an 8% increase from 2009.

In 2008, China's then Education Minister announced a strategy to bring the number of international students to 2% of the total student body in leading Chinese universities by 2020. To do so will mean, among other adjustments, increasing the number of programs taught in English. Australian universities are delivering over 100 joint teaching programs in China. These institutions can be part of China's internationalisation agenda through existing and new joint education enterprises.

So although the Laotian venture of Suzhou University does not pose an immediate threat to Australia's competitive position, a failure to understand and engage with China on its education internationalisation strategies may leave Australia over-exposed to rapid policy shifts and their economic consequences.

Still more threatening to our international education industry is complacency and the unpreparedness of government and institutions towards shifts in policy and student demand from China. These, coupled with sudden and ill-communicated changes in skilled immigration policies, have caused the recent crises in Australia's international education.

The Joint Work Plan recently signed between the DEEWR and the Chinese Ministry of Education is a step in the right direction, but both institutions and the government need to do more. Apart from the core element of our education partnership, which is students, the Joint Work Plan should also focus on expansion of joint teaching and research programs (particularly delivered in China). It should also broaden and deepen leadership exchanges such as the existing China University Presidents Programs.

By strengthening the interconnectedness of our education systems we can benefit from the transformations of China's higher education, and lift our education engagement from a reactive supplier of professional courses in business to more sustainable and pro-active education relations.

Photo by Flickr user rkleine.