Diplomatic spat could harm universities: Moody's Investors Services

With the continuing diplomatic spat between Canada and China, Moody's Investors Services is warning that three of the country's biggest universities would face a cash crunch if Beijing decided to call back its foreign students.

Moody's notes that tuition for international students is much higher than that charged to Canadians and has become a crucial source of income for schools.

The warning comes several months after a dustup between Ottawa and Saudi Arabia resulted in the kingdom yanking the scholarships of Saudi students studying in Canada.

Moody's says the impact of such a move by China would be far greater because there are 15 times as many Chinese students in Canada.

China has made no moves to cut off student travel to Canada but Moody's says there is a risk posed by the escalating diplomatic fight since Canada arrested a senior executive from Chinese telecommunications giant Huawei.