Why China's school dropouts are a cause for concern for its economy

Early childhood development centres could play a vital role in solving the country's growing education problem

Development of young children in rural China is hampered by parents moving to urban areas full-time (Reuters)

Every day after lunch, Qu Yexiu used to potter around her house in north west China doing housework and looking after her two-year-old grandson.

Now, every day after lunch, Qu and her grandson visit the newly opened early-childhood development centre in their village of Huangchuan in the mountains of Shaanxi province, where he can play with other toddlers.

“Things are better now that we have this village centre,” said Qu, 56. She looks after her two grandchildren while their parents work and live in nearby Anhui province. The other grandchild attends a preschool.

“My grandson has other kids to play with and I can chat to the other grandparents.”

Early-childhood development centres like the one in Huangchuan may be the answer to one of China’s biggest challenges – reducing the number of children who drop out of school in rural areas.

Children in rural areas, where around half of the population lives, have far lower cognitive and social skills compared to their urban counterparts, setting them on a path of dropping out of school before they can even say their own name.

Poor education was not such a problem for previous generations of Chinese who spent their lives on the farm or in factories but it could now have far-reaching consequences.

The government wants to push the country up the value chain, so the world’s second-largest economy needs a higher-skilled labour force if it wants to transition to a higher-value economy.

“This is the biggest problem that China faces that no one knows about. This is an invisible problem,” said Scott Rozelle, co-director of the Rural Education Action Program (REAP), a research and policy organisation based at Stanford University, which partners with Chinese universities.

“China has the lowest levels of human capital [out of all the middle income countries in the world today]. China is lower than South Africa, lower than Turkey. We think that’s related to when they were babies, they didn’t develop well,” Mr Rozelle said.

China’s National Health and Family Planning Commission is working with economists like Mr Rozelle and his colleagues to provide early childhood development opportunities to babies and toddlers in rural China.

Seventy-six per cent of China’s labour force did not attend high school, based on figures from the country’s last census in 2010, according to an academic paper co-authored by the Asian Development Bank and published last year in the China Quarterly, an academic journal.

The gap between rural and urban China is also big. Only 8 per cent of rural Chinese in the labour force in 2010 had attended any high school, compared to 37 per cent of urban Chinese, according to the China Quarterly article.

The disposable income of a person living in rural China was 6,562 yuan in the first half of 2017, compared to 18,322 yuan for someone in an urban area, according to China’s statistics bureau.

Data from China’s Ministry of Education shows 94.1 per cent of students graduated from middle school and 92.5 per cent of students graduated from high school in 2015.

The Ministry of Education declined to comment immediately when asked about the differences between their statistics and those based on the 2010 census data.

One factor slowing down a toddler’s development is the absence of their parents, education experts say. Millions of rural Chinese parents migrate to cities to live full time because they can earn much more than they could by staying in their home villages.

That’s where early development centres in China could help. Under the programme, there are 50 pilot centres in villages and towns in rural China where children from six months to three years old can experience books, play and interact with other children.

REAP thinks 300,000 centres are needed across China and the most appropriate entity to head this up would be the government.

Cai Jianhua, a government official at China’s National Health and Family Planning Commission, wants the government to allocate 0.1 per cent of its GDP – 70bn yuan – to roll out these centres across the country.

Cai says the government has not made a funding commitment, but it has stepped up investment in its youngest citizens in recent years with, among other things, free health checks and immunisations for babies.

Unless China has a significant number of Chinese with “broad experiences and deep knowledge”, China’s economy will struggle to develop.

“The reality is we need smart people if we’re going to be competitive in the 21st century,” said Cai.

To be sure, there are many reasons for low numbers of students attending high school in China, according to the same academic paper published in the China Quarterly.

These include restrictions on population flows because of China’s residency permit system, children who leave school early to work and support their family, and poor investment in rural healthcare, according to the paper.

Closing the education gap between urban and rural China will help close the inequality gap, say economists who study education.

If the gap isn’t reduced, it will be more difficult for President Xi Jinping to achieve his goal of eradicating poverty and turning China into a “moderately prosperous society” by 2020.

Reuters