Stanford Center on China’s Economy and Institutions is a joint effort of the Freeman Spogli Institute for International Studies and Stanford Institute for Economic Policy Research.
On the Asia Matters podcast, Andrew Peaple speaks to economists Tao Wang and Jinny Yan, and academic Scott Rozelle about China's economy.
The Daily Reckoning Australia host speaks with Scott Rozelle about why China is facing an internal crisis no one in the world is watching except him.
As the glittering skyline in Shanghai seemingly attests, China has quickly transformed itself from a place of stark poverty into a modern, urban, technologically savvy economic powerhouse. But as FSI Senior Fellow Scott Rozelle shows in his new book Invisible China, the truth is much more complicated and might be a serious cause for concern.
Drawing on extensive surveys on the ground in China, Rozelle reveals that while China may be the second-largest economy in the world, its labor force has one of the lowest levels of education of any comparable country. The low levels of basic education of such a large share of workers may leave many unable to find work in the formal workplace as China’s economy changes and as manufacturing jobs both begin to automate and move elsewhere
In this Stanford alumni event, Rozelle, who is also the co-director of Stanford Center on China's Economy and Institutions and senior fellow at the Freeman Spogli Institute for International Studies, will be joined by Hongbin Li, co-director of Stanford Center on China's Economy and Institutions and senior fellow at the Stanford Institute for Economic Policy Research, who will moderate a discussion about the major themes of the book.
A question and answer session with the audience will follow the discussion.
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"Chinese students hoping for a reprieve from this year’s gruelling university-entrance exams are out of luck. Unlike America, where many top-tier universities have waived standardised testing requirements amid the covid-19 pandemic, China is keeping its students’ noses to the grindstone. On February 20th the Ministry of Education announced that the national exam, which determines which universities students can attend, will be held as planned on June 7th and 8th.
The annual assessment, known as the gaokao, is the biggest in the world. Every summer some 10m students in China trek to 7,000 testing centres around the country to sit the nerve-racking exam, which lasts for nine hours over two to four days. Pupils study for years, and for good reason. Those who score well on the test are eligible to apply to the country’s best universities, a prerequisite for many good jobs. The high-stakes exam is designed to be meritocratic: anyone can take it; for children from poor families, a good score can offer an escape from a life toiling on the farm or in a factory.
The gaokao influences students’ economic prospects for years to come, according to a recent working paper by Hongbin Li of Stanford University and Ruixue Jia of the London School of Economics. The authors looked at the cut-off score for qualification to enter China’s top 100 universities. Using hand-collected data from over 10,000 people, they found that, whereas students who score just below the cut-off have only a 6% chance of attending a top-tier university, those who score at or above it have a 20-40% chance. They also earn 5-9% more in their first job out of school (see chart)."
SCCEI Co-Director Hongbin Li's research on elite college admissions and wages in China provides the basis for this article from The Economist.
"At a time when every other major economy is shrinking, China announced in late January that its GDP grew 2.3 percent in 2020. Beneath that impressive achievement, however, lies a very unbalanced recovery: As in the past, Beijing relied heavily on state investment and a state-led push for higher industrial production, while private investment and consumer spending remained weak. Easy credit to fuel growth has likely formed even more so-called zombie companies with little prospect of future profitability and filled the books of Chinese banks with even more bad loans.
That much is familiar to many who have taken a closer look at China’s skewed model for economic growth. What’s much less well known is the disproportionate burden of the COVID-19-induced downturn that has fallen on rural Chinese, including the 290 million migrant workers with rural hukou (household registrations) who work in cities throughout China. Lockdowns forced by the pandemic paralyzed economic sectors where many migrants work, such as services and retail. According to one estimate, Chinese migrant workers lost about $100 billion in wages that they are unlikely ever to recover.
Among migrant workers and the underdeveloped rural communities that depend on the wages they send home, a quiet crisis is taking place—with potentially dramatic consequences for China’s future growth. Despite what the GDP number suggests about the country’s successful handling of the pandemic, China’s longer-term economic risks have only grown—and are a direct result of the crisis in rural China. As Stanford University researchers Scott Rozelle and Natalie Hell document in their meticulously researched book, Invisible China: How the Urban-Rural Divide Threatens China’s Rise, hundreds of millions of rural Chinese face a dangerous lack of human capital and suffer from pervasive health problems, including widespread iron-deficiency anemia, uncorrected myopia, and parasitic intestinal worms. Exacerbated by the pandemic, China’s rural crisis remains largely invisible to outside observers, and even to many Chinese."
Chorzempa & Huang write on China's rural human capital crisis stating that "no country with China's vast education and public health problems has ever broken out of the ranks of middle-income countries." The article references FSI Senior Fellow and SCCEI Director Scott Rozelle's book "Invisible China: How the Urban-Rural Divide Threatens China’s Rise" throughout.
Studies have shown that nearly half of rural toddlers in China have cognitive delays due to an absence of stimulating parenting practices, such as early childhood reading, during the critical first three years of life. However, few studies have examined the reasons behind these low levels of stimulating parenting, and no studies have sought to identify the factors that limit caregivers from providing effective early childhood reading practices (EECRP). This mixed-methods study investigates the perceptions, prevalence, and correlates of EECRP in rural China, as well as associations with child cognitive development. We use quantitative survey results from 1748 caregiver–child dyads across 100 rural villages/townships in northwestern China and field observation and interview data with 60 caregivers from these same sites. The quantitative results show significantly low rates of EECRP despite positive perceptions of early reading and positive associations between EECRP and cognitive development. The qualitative results suggest that low rates of EECRP in rural China are not due to the inability to access books, financial or time constraints, or the absence of aspirations. Rather, the low rate of book ownership and absence of reading to young children is driven by the insufficient and inaccurate knowledge of EECRP among caregivers, which leads to their delayed, misinformed reading decisions with their young children, ultimately contributing to developmental delays.
In China the urban-rural gap is codified through the hukou system of household registration. Some 60% of the population are urban, but only 44% hold an urban hukou. Those registered to live in villages are effectively barred from settling full-time in cities and sidelined at school. So rural and urban youth take distinct educational paths. In 2015 over 80% of all 15- to 17-year-olds were in school, up from half a decade earlier. But in rural areas many attend low-quality vocational schools, note Scott Rozelle and Natalie Hell of Stanford University in a book, “Invisible China”. Mr Dong is not looking for better-paid work because he feels unqualified, despite studying architecture at a vocational school.
Writes The Economist in the Special Report on China's Youth on January 23, 2021.
Trouble in the Country: The biggest Obstacle to China's Rise is Poorly Education Rural Children
The china that most foreigners see is modern and metropolitan. The skyscrapers glitter. The bullet trains are fast and comfortable. Anyone who visits only Beijing, Shanghai or Shenzhen would conclude that China was already a rich country.
Yet there is another China: poor, rural and scarcely visible to outsiders, especially when covid-19 has made travel so hard. Toilets can be holes in the dirt, tricky to find in the dark. Women sometimes break river ice to wash clothes by hand. In many villages, most working-age adults have moved to the cities, where they lay bricks, deliver packages and only occasionally return to see their children. “It’s a hard life being away from your family so much,” one migrant in Hebei province told this reviewer.
Writes The Economist in the Books & Arts section on January 23, 2021.
In a special report on Chinese youth, The Economist references Scott Rozelle and Natalie Hell's newest book, "Invisible China," highlighting the great disparity in educational quality across rural and urban China. In the same January 23, 2021 issue The Economist also reviews "Invisible China" in the Books & Arts section.
