Recruiting foreign students will be key if Japanese universities are to survive the competition expected as the population shrinks, according to British scholar Peter Mathias.

Japanese universities must establish an "international status" that will enable them to attract students from all over the world, said Mathias, an honorary fellow at Downing College, Cambridge, and former research supervisor to Crown Prince Naruhito at Oxford University.

Japanese universities "will be competing at an international level to provide the best (Japanese) students going overseas and acquire the best overseas students coming to Japan," the 78-year-old said.