Rozelle, Scott, & Hell, Natalie. (2020). Invisible China: How the Urban-Rural Divide Threatens China’s Rise: University of Chicago Press.

I have been to China once or twice every year since 2004, teaching at the BI-Fudan MBA program. As everyone else, I have observed and been impressed with the incredible development that has happened since then. When I first visited Beijing in 1995, there was a dirt road from the airport to the city. Now, of course, it is a highway with at least four lanes in each direction. I have taken the high-speed train between Shanghai and Beijing several times, and have been impressed by the sheer energy of Shenzhen, China’s Silicon Valley.

But there is another China that you seldom see. With the exception of a trip to Lijiang and an unplanned taxi trip to a small village outside Shanghai, I have never really seen rural China – the roughly 2/3 of China subject to hukou, a policy that disallows migration from rural to urban areas.

As Rozelle and Hell writes in this book, China has grown into an economic superpower in record time, but its public health and education system has not kept up. Children in rural areas are subject to malnutrition (chiefly iron anemia), intestinal parasites, and uncorrected myopia. Couple that with lack of intellectual stimulation at a very early age, and you get a large portion of the population that will be largely unemployable as China’s manufacturing jobs are automated or move to other countries, and construction jobs disappear because, well, everything has been built. This puts China in danger or ending up in the middle-income trap, along with countries such as Mexico and Brasil.

I remember visiting Ireland – a country that has become rich from a rather poor starting point – with students at the end of the nineties, in the midst of the Irish economic miracle. The country attracted investments because it had very little bureaucracy, low taxes for foreign corporations, but most of all because it had a highly educated, English-speaking work force. As one IBM manager put it: The country was “so poor that the only thing we could afford was education.” In an economy built on knowledge and innovation, you need a large portion of the workforce with skills at least at a high school level. Given the health and cognitive challenges in rural China (not to mention as many as 40 million lone males as a result of selective abortion) China simply is not geared for that, outside the urban areas.

This can, and must, be fixed. Some of the remedies – multivitamins, glasses, and deworming tablets – are relatively cheap and easy to implement. Training a child, especially one from an environment with little intellectual stimulation (a consequence of many children being reared by grandparents with a background in subsistence farming) up to high school levels takes 12 years, and presupposes that the child is capable of learning how to learn.

Rozelle and Hell stress that the central government is moving in the right direction, making basic education free and repurposing the “one-child” control bureaucracy towards ensuring better child care. China is a rather well organized country, and central campaigns for change tend to work. But does China have the time needed? It worries me that Xi Jinping apparently has outlawed the term “middle-income trap” (along with images of Winnie the Pooh), afraid of the apparently necessary transition to more democracy that inevitably will come from a better educated population. Possible disasters (civil war, outward aggression to deflect attention from internal problems, mass criminality a la Mexico) are many. China’s leadership and communist party has to a large extent been based on meritocracy, but as Adrian Wooldridge writes in another highly readable book, the signs of cronyism are already there.

This could end ugly.