As Australia’s university sector grapples with domestic electioneering, its biggest challenge to date is happening across the Pacific. While the Trump Administration cuts funding to education and research, including to its most elite research institutions, China’s economy looks set to increasingly be driven by knowledge and innovation.
Australia is deeply entrenched within a global knowledge ecosystem that is being turned on its head. Understanding how our universities are and potentially could be impacted is the first step to plotting our course over the coming months, for an issue that will invariably have national implications spilling well beyond the higher education sector.
The first point to note is that decisions during the first Trump administration ensured China’s rapid growth in its AI and high-tech sectors in recent years. Trump’s policies during his first term, continued and expanded under the Biden administration, included defence security controls and visa restrictions, accelerating a shift from low-value manufacturing to high-value sectors in China. The US protectionist policies pushed China to take on its own version of self-reliance, aiming to develop its own technological expertise to compete with the United States on its own terms. This led China’s economic base to take a tech-turn. Sought-after jobs now are found in software development, R&D and advanced manufacturing, rather than the factories of the past that built China’s export economy.
Now back in the White House, Trump’s policies look set to further contribute to China’s technological grit.
Trump is also holding the federal allocation of funding to universities in an effort to shift the ideological tilt of the US higher education system. Universities have seen federal money allocations suspended, threatening research projects, laboratories and jobs. So far, the Trump administration has pulled, or threatened to pull more than US$12 billion from universities. Global partnerships, including Australian researchers who receive funding from the US government, have not been spared.
At the same time, the administration’s steep trade tariffs on China aim to bring traditional manufacturing and agricultural jobs from China to the United States.
Meanwhile in Beijing, the focus is not on manufacturing or agriculture – sectors increasingly seen as drivers of past growth. Instead, China is aiming at high-skilled industries. China’s recent policy documents all point to an education and research-led economic agenda that places technology and innovation at its centre.
Washington’s restrictive policies have to date not stifled China’s progress.
China’s recent Government Work Report released at the National People’s Congress focuses on the development of what is now known as “New Quality Productive Forces”–the upgrading of traditional sectors and growing the digital economy. The term New Quality Productive Forces was first introduced in 2023 and has fast become a key concept within China’s industrial policy. It refers to an innovation-driven growth model, where emerging technologies create new industries and modernise traditional sectors.
New Quality Productive Forces (NQPF) has now become a priority for China’s economic development, and it is reliant on well-funded research supporting technological breakthroughs. This is a significant shift. The Ministry of Science and Technology last year set up three new think tanks to support this new model, including an NQPF Promotion Centre and an International Science and Technology Promotion Centre.
Washington’s restrictive policies have to date not stifled China’s progress. Instead, they have intensified the country’s push towards technological self-sufficiency.
At the basis of this new economic framework is a recently released Blueprint for China’s education sector. The blueprint devotes significant attention to opening up and to enhancing capacity to train and attract talent, particularly in the research and development field. It promises support for advanced research universities, and significantly for the rest of the world, encourages high-level foreign universities in science and engineering to offer programs in China. The document calls for mechanisms to be put in place to adjust disciplines and majors that align with advances in science and technology and with the country’s national strategies.
There is an urgency in the blueprint, calling for “extraordinary efforts” to set up critically needed disciplines and majors, and stresses the need to implement plans for foundational breakthrough research.
China increasingly sees universities as part of its economic relationships globally. China is offering scholarships and tuition for students across Southeast Asia and Africa, with research collaborations extending beyond the West as Chinese institutions form partnerships with universities in Africa, Latin America and the Middle East.
Australia’s strength in engaging via international education throughout our region is a significant competitive advantage and one which needs the support of government and stakeholders. While the United States devalues education and research, China is throwing its efforts into building an innovation and knowledge-driven economy. Australia’s position between these two rival superpowers is important. Australia’s own ambitions – to be a renewable energy player, to build an innovative economy, to be a responsible and stable part of our region – will depend on our ability to navigate this changing context with both openness and integrity.
