China has been accused of closely monitoring students and harassing tutors at universities in Australia.
Human Rights Watch has also taken aim at universities, saying they are failing to protect academic freedom.
"You have to choose your words very carefully. I look at my university and see the place is absolutely hooked on Chinese foreign student money," one academic told the group in a report released on Wednesday.
The study canvassed 22 academics and 26 mostly pro-democracy students in Australia between September and April this year.
Students were subject to censorship and harassment on social media and feared the consequences for their families back home.
Human Rights Watch verified three cases where students' families in China were visited by or requested to meet with police about their activities in Australia.
One student joined a pro-Hong Kong democracy demonstration only to receive a late night warning from a classmate back home.
"He was like, 'I'm watching you.' He ended the conversation with, 'I support the Hong Kong police'," she said.
"I felt really scared. I went to go see the uni psychologist because I was so stressed. I blocked him (the classmate) on Facebook. I was in a course with 98 per cent mainland students. Students were bad-mouthing me."
She did not report the incident to her university because she saw it as being sympathetic to pro-Beijing students.
"In their (the university's) mind, Chinese-speaking students are pro-CCP and they don't want to hurt their relationship with the Chinese student association," she said.
Human Rights Watch said COVID-19 had also created new security risks because many students were back in China and had to navigate teaching materials remotely though online censorship.
Academics in Australia were also being censored, with one unnamed tutor attacked online after telling students she was appalled one of them had told a classmate not to refer to Taiwan as a country.
The tutor's details were shared and she received angry emails from Chinese students, including one also sent to the vice-chancellor.
One academic who wrote about the Chinese Communist Party kept getting malware on his computer and believed he was being targeted by authorities in Beijing.
Human Rights Watch wants the federal education department to set up a system where universities can report - including anonymously - harassment, intimidation, censorship and acts of retaliation.
It also wants the government to publish an annual report of these incidents, including universities' responses.
The group urged university heads to speak out publicly against harassment, intimidation and censorship, and put policies in place to better protect staff and students.
Responding to the report, Universities Australia said it condemned all forms of coercion towards staff and students on campus, in classrooms and in the community.
Universities Australia chief executive Catriona Jackson said the sector had zero tolerance towards behaviour which sought to undermine academic freedom.
Australian Associated Press