"I just looked up Oxford University income for last year. It seems publishing is one of their biggest sources of income, way above international student fees."
Publishing houses are a separate financial unit - nothing to do with the university’s finances. So much misinformation. No, we are not a profit making entity. Any surplus goes back to subsidising education. Hence back to home students.
As I said before, admissions is a meritocratic process. We want the best of the best. This makes the UK one of the best places for education and science. The philosophy has placed us at the top, and we are able to compete with much larger and richer universities across the world.
There is a lot of competition (3 mil UCAS applications per year. About 30 thousand of these are from China.) In the UK top students who apply are top students from the UK - Chinese applicants are the top from a much much bigger population pool. Regardless of this, our home students do very well.
Students who graduate from our university, regardless of where they came from, if they stay in the UK (and very many do), become wonderful positive contributors to the UK - scientists, business owners, engineers, doctors, artists. We try to balance admissions numbers on background, demographics, and a whole host of other personal factors. Nowhere in this process there is any influence on student acceptance numbers from overseas. I worked in three universities, all were the same. I can imagine scepticism but there really is no-one telling anyone how many students should come from where. I can imagine, on the contrary, if there was a massive, atypical overshoot that could raise questions. I am not saying this is for the whole of the UK university landscape - my sample size is three.