All SCCEI News News November 17, 2020

China’s Rural Population Will Play an Instrumental Role in its Economic Future

On the World Class Podcast, Scott Rozelle explains why China’s wealth gap may make the transition from a middle- to high-income country more difficult than it seems.
Children in rural China
Luo Hongni, 11, and brother Luo Gan, 10, carry flowers to be used as feed while doing chores in the fields on December 18, 2016 in Anshun, China. Photo: Getty Images

840 million people — or about one-ninth of the world’s population  — live in China’s rural areas, Scott Rozelle told Michael McFaul on the World Class Podcast. Rozelle describes that one-ninth as “invisible China” — a group that includes farmers, elderly people, children, factory workers, and migrant communities within rural China.

These people tend to settle in the areas in which they are born, and they’re generally not depicted in mainstream media outlets, but they are going to play an instrumental role in the country’s economic future, Rozelle said. 

His new book, “Invisible China: How the Urban-Rural Divide Threatens China’s Rise,” outlines how the wealth gap between the richer urban parts of China and the poorer rural areas could contribute to a slowdown in China’s economic growth.

“It’s the biggest problem China faces that no one knows about,” he said.

While China is home to millions of engineers and other high-skilled workers, 500 million Chinese citizens haven’t attended high school, making it the country with the lowest level of education among middle-income countries, according to the Organisation for Economic Co-operation and Development. 

However, over the last 40 years, China has worked its way up from a low- to middle-income country. In order for a nation to do this, its workforce must have three major attributes, Rozelle explained: workers need to be able to read, they need to be able to write, and they need to be disciplined. These characteristics are often a recipe for success in blue collar jobs, such as construction or factory work, but as a country attempts to transition from middle- to high-income — as China is now looking to do — things can get trickier.

For example, foreign-run factories in China are beginning to close and move to countries with cheaper production costs, such as Vietnam, Bangladesh and Ethiopia, leaving few job opportunities for factory workers without a high school education.

“People need to be able to retrain themselves to become hotel managers, or accountants, or financial analyst assistants,” Rozelle said. “If you don’t have the math, science, language, or computer skills in today’s world, you’re going to be left out of that economy.”

“If you don’t have the math, science, language, or computer skills in today’s world, you’re going to be left out of that economy.”
Scott Rozelle
FSI Senior Fellow

The Chinese government has taken notice of the problem and is taking steps to alleviate it. 20 years ago, about 25 percent of 16-17 year olds in China were attending high school. By 2018, that number had risen to 87 percent, Rozelle noted, and added that China’s goal was to have all high-school aged students attending school by the end of this year, before the pandemic started.

“The real problem is that you can get kids in school, but do they learn and are they getting those skills? I think that’s what China doesn’t realize,” Rozelle said. “It’s about more than just building schools — it’s a much deeper rooted problem.”

Scott Rozelle

FSI Senior Fellow
Dr. Scott Rozelle

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Book cover for "Invisible China: How the Urban-Rural Divide Threatens China's Rise" showing a man watering a field in front of high rise buildings.

A Conversation with Scott Rozelle & Natalie Hell on their New Book, Invisible China

In their newly released book, Scott Rozelle and Natalie Hell explore how the great disparity in human capital across rural and urban China is inhibiting China’s rise from a middle-income to a high-income country. We sat down together to learn more about the invisible economic challenge China faces.