Now that the two Michaels are back in Canada, it’s time for Canada to carefully reconsider our relationship with China. 

First, we need to understand better the realities involved in dealing with the Chinese government and with firms in China. It’s not like dealing with the Americans, difficult though that may be at times. The central fact is that, when “negotiating” resolution to disputes with either the Chinese government or their commercial entities, the dialog will be distinctly one-sided. China will determine how the issue at hand will be resolved and there will be no other choices available. 

The rule of law and the normal spirit of compromise that underpin how business and government works in the developed world are not available when dealing with China. Which is to say that the risks involved are radically different from what we consider to be “normal” business risks here in Canada. Our relations with China need to reflect these risks accurately.

A growing Chinese market of more than 1.3 billion people looks to many would-be sellers of goods and services to be an almost irresistible market opportunity. In reality it may be less attractive when compared with smaller but more flexible societies in greater Asia. Why is this? Put simply, Chinese values and longer-term interests are often in direct conflict with Canadian values and interests. Canada and Canadian firms and individuals dealing with China need to be aware of these fundamental differences in values and objectives and assess carefully the risks involved before putting too many eggs in the Chinese basket.

Let me cite one example. Several universities in Canada (and virtually all such institutions in both Australia and New Zealand) have admitted large numbers of Chinese students who, as foreign students, pay substantially more in tuition than domestic students. This foreign revenue has become increasingly important to these institutions as government financial support has been, in effect, frozen for several years. 

Chinese students coming to these universities are normally given a test to assess their ability to work effectively in English before they are accepted. It turns out that some candidates have been awarded high but inaccurate marks on the test. In some cases, the exams and the answers have been distributed to those taking the test days before the actual test date. Then when the students arrive and begin to take in-class tests, their language deficiency becomes obvious and some fail repeatedly. 

Normally, such failing students would be dismissed, since it helps no one if they cannot benefit from the course work. But, if they are expelled for unsatisfactory results, the institutions would lose income. Thus, a central goal of increased foreign participation becomes retention of such marginal students. There develops a double standard: a low one for the well-heeled or highly-subsidized but floundering foreign students and the traditional high standards which have been the hallmarks of most Canadian universities for domestic students and those foreign students with good English proficiency. (The lax manner in which language competence is evaluated is not addressed or corrected.)

Clearly, such a double standard is difficult to maintain and can lead to all kinds of conflict on campuses. The Chinese government, however, has made it clear that failing out their students is not acceptable and could lead to shutting off any further students being sent to the offending institution. So, some beleaguered administrators have opted for a general lowering of standards for all students rather than taking the budgetary hit that would follow from failing out those who can’t meet the higher standard. 

This is not a healthy result for academic excellence and, in the long run, could have severe consequences. One of these is dissatisfaction among employers recruiting graduates. 

Solving universities’ financial problems by relying upon increased foreign student enrolment changes the basic objective of a taxpayer-supported institution — and not in a good way.

It’s time the entire post-secondary education system in Canada finds an alternative business model that does not rely on the Chinese appetite for our degrees.

David Bond is a retired bank economist who lives in Kelowna.

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