"It's good for all countries to have people who are multicultural, who are comfortable crossing borders and who know how to work in partnership with people who grew up with different world views," he said.

"I'm also a believer in free trade. I don't think trade wars are a good idea."

Academic freedom

Mr Lehman said NYU was aware of concerns around academic freedom for foreign education institutions operating in China, where the Communist Party has strict control over its universities and censors news and information flows. However, he said the NYU had made it very clear to its Chinese partners academic freedom was "essential".

"On our campus, people can say what they want about whatever they want to each other. It does not mean that people are given some special cloak that allows them off campus to act differently from anyone else. We're quite clear with everyone about that. When we're off campus, we're following local norms."

Asked whether he believed there would be more Sino-foreign universities set up in China – Australia doesn't have one yet – Mr Lehman said the government had become wary about such collaborations.

"These are big ventures. I told NYU at the beginning [of their discussions about whether to create the school] assume there is only a ten per cent likelihood this [negotiation] is going to work out [in the form of an agreement that is satisfactory to all parties]," he said. "If it's not possible to find an agreement where everyone is fully on board, don't do it."

He said the collaboration had "wildly exceeded expectations."


However, Mr Lehman's advice to any university looking at expanding its activities into China is not to set up anything it can't afford to lose.

"I discourage international universities from trying to view activities like this as a source of financial profits that they will bring home to subsidise there activities at the mothership. I think that's a very bad approach.

"For any university it's very important not to have these kinds of activities become somehow essential to the university's identity, activities and financial structure. These are always going to be at some level higher risk."

Mr Lehman's note of caution comes amid heated debate over the reliance of Australian universities on full-fee paying Chinese international students. The spotlight has also been placed on international research partnerships amid concern about a lack of scrutiny for collaborations looking at technology that could potentially be used for military purposes.

Last week, the Department of Defence proposed sweeping law changes that would give it greater control over these partnerships. This is being met with resistance by universities which claim the proposals are "extraordinary and excessive."

Exert control

James Leibold, associate professor at La Trobe University, said Australia needed to find a way to exert control over dual-use technology partnerships "without shutting everything down."

More broadly, he said collaborations between Australian and Chinese universities were facing challenges.


"Under [Chinese President] Xi Jinping, China has far less space for freedom of thought and freedom of expression and that has spilled over to collaborations. They have been politicised," he said.

"Australia has also changed. It is far more attuned to some of the challenges of engaging with, and increasingly competing with, China."

Mr Leibold, who is speaking on a panel at the AFR Higher Education Summit, said it was important for universities to diversify away from a reliance on the China market.

"If universities have 15 per cent of their operating budgets reliant on full-fee paying Chinese international students they are vulnerable to what happens if the market dries up," he said.

"We need to be thinking about what are universities. Are they money-making institutions or are they about knowledge creation? I think we are in danger of losing that sense of the core mission in the pursuit of making money."