The number of Chinese international students starting university degrees in Australia is set to return to pre-pandemic levels by the end of the year, according to the education minister.
In a speech at the Universities Australia gala dinner in Canberra on Wednesday, Jason Clare said more was needed to be done to retain international students in Australia.
Mr Clare said international students starting degrees during the past year was up 38 per cent on the 12 months before.
Recent changes by the Chinese government mandating students studying abroad needing to do so in person was set to boost that figure further.
"We now estimate that by the end of this year it's likely we will be back to the same number of international students starting a degree as there were before the pandemic," Mr Clare said in the address.
"The biggest export we don't dig out of the ground is coming back. But that's not enough. On the current trajectory the total number of international students enrolled in our universities won't get back to pre-pandemic levels until the end of 2025."
The comments follow changes to visa rules for international students, with those who graduate in sectors with critical shortages being allowed to work in Australia for an extra two years.
Mr Clare said the changes would make Australia more competitive for graduates.
"Other countries are eating our lunch at the moment. Some are back to pre-pandemic levels. Others are past it," he said.
"This will help attract more of the best and brightest to study here in Australia and help Australian businesses screaming out for skilled workers."
The overhauls coincide with the launch of a wide-ranging review into the higher education sector, touted as the biggest in more than a decade.
The head of the review, Mary O'Kane, said Australia had a long way to go if it wants to catch up to like-minded nations.
In a speech to the conference, Ms O'Kane said research still had to be improved.
"(On innovation), Australia is very weak in terms of its results against its OECD peers," she told the conference.
"There is something going wrong - we might be educating people well, but we may not be educating them for what is needed."
A discussion paper on the accord has been released, proposing a new long-term target for higher eduction and participation.
The current measure of bachelor degree attainment for people aged 25 to 34 is 44.6 per cent - above the average for OECD countries of 41.5 per cent.
But it lags behind the highest-achieving countries such as the Netherlands (54.3 per cent), Switzerland (52.3 per cent) and the UK (51.2 per cent).
"There are some scary estimates of what we need to produce in terms of the number of people getting a bachelor degree, we're certainly not where we need to be at the moment," Ms O'Kane said.
"We're trying to work out where we should be ... but we do know it's a big jump."
Seeking a higher attainment target will also drive universities to lift the proportion of students from under-represented groups, the paper argues.
In 2021, 17 per cent of higher education students were from a low socio-economic background, 2.4 per cent were Indigenous Australians, 21 per cent were from regional or remote areas, and nine per cent were students with a disability.
Ms O'Kane said the accord would also focus on what skills graduates would need for the future to meet demand in growing industries.
"Employers are telling us very loudly, and it's a strong refrain, that we need a lot more in the generic skills," she said.
