In Invisible China, Rozelle and Hell answer three questions: why is rural China so behind? How does the urban–rural divide hinder China's future development? And what can be done to minimize the dangers China faces today? They argue that rural China's underdevelopment lies in its human capital crisis, caused by a lack of high-quality secondary school education. Human capital is critical in keeping countries growing and thriving, and a country cannot sustain itself without robust high school education. In rural China, education is usually ignored. Poor access to high school education in rural areas leads to severe polarization in Chinese human capital. This urban–rural educational polarization can bring economic shock to China, which could cause social unrest that challenges the CCP's legitimacy. An economic shock for China would also harm the global economy. This human capital crisis in China can drag the country into the middle-income trap, which is the biggest threat to China's development.
Why do some countries make it through middle income without slowdowns, while others get stuck in the trap? Rozelle and Hell compare two different countries, focusing on a successful case, Taiwan, and a failed case, Mexico. By analyzing Taiwan as a successful “graduate” from the middle-income trap in recent decades, they conclude that the key for Taiwan to get through the middle-income trap is its high-quality education, which helped Taiwanese laborers be flexible in high-skilled sectors. This labor flexibility enabled Taiwan to upgrade its industrial structure and grow steadily and sustainably from poverty. By contrast, the low secondary educational level is the reason Mexico still gets stuck in the middle-income trap. Can China repeat the Taiwan miracle? The answer seems to be no. This is because China's high school attainment was only 30 percent in 2015, even lower than Mexico's 35 percent. By analyzing the “vicious downward spiral” in Mexico caused by educational polarization, Rozelle and Hell warn China of the dangers of this urban–rural polarization.
How did China arrive at this great educational inequality? China's human capital crisis is mainly because the government did not prioritize the comprehensive accumulation of education as early as Taiwan did. Rural poor children and their families have an incentive to forgo education in favor of making money, because the opportunity cost for secondary school is too high. Furthermore, rural poor children face invisible health and nutrition barriers caused by poverty that hinder their cognitive ability to learn. The invisible child health issue also prevents China from accumulating enough human capital it needs.
What can be done to minimize the threats of China's human capital crisis? Rozelle and Hell point out three unique structural barriers: the Hukou system, decentralization, and a focus on short-run growth. These structural barriers can lead China to the middle-income trap, and China should lift them soon. To prevent a potential economic and political crisis, China and other middle-income countries should pay attention to their human capital problems by eliminating barriers to education for all children and take this action as early as possible.
The first strength of this book is the authors’ fieldwork research in 28 provinces and municipalities. Rozelle and Hell use case studies in many chapters, telling a story of an individual they witnessed or interviewed, who had suffered for not receiving a good education. For example, when introducing China's vocational high school problems, the two authors use “I” and tell Wang Tao's story. Wang was a hardworking rural student who went to a vocational school because his family could not afford the academic high school tuition fee. By quoting him saying “what a waste of time,” Rozelle and Hell demonstrate how rural children's educational opportunities are limited even though those children are eager to go to school. This in-depth fieldwork survey supports their argument with strong credibility.
The second highlight is the use of the middle-income trap theory to explain how it is relevant to education by comparing two clusters of countries. By showing the empirical data comparing countries’ income level and high school attainment, Rozelle and Hell find clear causality among education, quality of human capital, and economic development. This theoretical framework offers a foundation to analyze where China has gone wrong.
The argument made by the two authors leads to one key question: could there be a more systemic difficulty for China in dealing with the education problem? Rozelle and Hell argue that the roots of the educational divide lie in the low priority the government gives the problem. Yet could it be the result of a vicious circle in which structural poverty in rural China continues to drag human capital formation down? If so, instead of lifting structural barriers first, should the government prioritize measures to combat rural poverty?
Moreover, one may argue that the two authors’ criticism of the Hukou System and the short-term focus on physical infrastructure oversimplifies their reasoning. Rozelle and Hell argue that China should abolish its Hukou System and bring more rural students to urban public schools. In my opinion, this suggestion may not solve the urban–rural divide. It might further increase urban–rural inequality since more laborer's and capital will flow to the city. One could ask whether this “brain drain” problem could end up making rural areas poorer and thus setting back progress in rural education.
Rozelle and Hell also suggest that the short-term focus on physical infrastructure at the expense of schooling may have been counterproductive. One may argue that infrastructure can help to reduce rural poverty, a prerequisite to better education. Many rural areas’ backward education is largely due to a lack of basic infrastructure such as convenient transportation. The Chinese government might be right to invest billions in roads, because it is an effective way of eliminating rural poverty. To deal with its human capital crisis, China may still need to prioritize some short-term measures, such as physical infrastructure construction, to eradicate rural poverty.
Despite its rapid economic growth, China faces one of its biggest challenges—the urban–rural human capital divide that threatens its economic health. The Chinese government must reduce this educational inequality as soon as possible. To close this divide, the Chinese should prioritize eliminating rural poverty. I believe that the Chinese government can shift some of its unsustainable practices to a healthy economic model. The world and the West should be optimistic about China's rapid economic growth and stability. Not only is a healthy Chinese economy beneficial for the global economy, but a stronger China would not threaten the current global liberal order. We should expect China to follow this order, contribute to global growth, and support a better global system.
