China’s short-changing its future

It would be hard to exaggerate the short-term challenges China faces as it tries to keep up growth, trim debt, slash overcapacity and prevent unemployment — all without crashing the economy. If anything, though, the long-term challenges are even tougher. And the government’s own policies aren’t making them any easier.

One of the most critical tasks is developing a workforce for the 21st century. China, whose rise has been fueled by a massive pool of cheap factory labor, much of it drawn from the countryside, faces a future in which automation will eliminate many jobs, even as population growth slows. The workers that remain are going to need more advanced skills and the ability to shift into new, more technologically sophisticated industries.

Where are these workers going to come from? The sons and daughters of China’s growing middle class — raised and educated in cities — will be well-positioned to succeed in this new economy. But many of the millions of migrant workers who have powered the Chinese miracle have had to leave their own kids behind in the countryside, either because they can’t afford to house them in China’s expensive coastal cities or because they can’t get the hukou — or residence permit — that would allow their kids to attend city schools.
Most estimates put the number of these “left behind” children at around 60 million — out of a total of 180 million kids in China. And recent research shows that their experience is far from a happy one.

Being raised in poor farming villages, by elderly and often uneducated grandparents, has a dramatic impact on these kids’ developmental prospects. Scott Rozelle at Stanford’s Rural Education Action Program has led teams of researchers studying the impact of family separation on Chinese children. They’ve found that these kids suffer more physical and mental health problems than those raised in households with both parents present, and show significant developmental issues.

One study found that nearly half of Chinese rural households had at least one parent who had migrated for work. Children were more anxious after that parent left and, more surprisingly, didn’t improve upon their return. These kids also suffered from lowered self-esteem and other emotional issues.

In cases where children are raised by grandparents, few reportedreading or singing to their charges, or even playing with them. Indeed, nearly 90 percent of elderly caregivers — who have little education themselves, given that they grew up when China was developmentally comparable to Africa — reported not reading to their grandchildren. As a result, more than 40 percent of children between the ages of 18-30 months appear to be developmentally delayed.

The one positive finding Rozelle’s researchers discovered was that the children of absent migrant workers tended to score better on standardized tests relative to other rural students in primary and secondary school. The Stanford researchers figure that has something to do with relative affluence: “Migrant households that experience rising incomes may be able to provide better nutrition, improved access to educational supplies, and burden their children with less housework.” Even so, their scores and job prospects still lag far behind those of their urban counterparts.

China can hardly afford to write off a third of its future workforce, especially as the demand for creativity and skills continues to grow. Even if these kids wanted to follow their parents and move to cities — as nearly 20 million Chinese did last year — there’s no guarantee they’ll be able to find jobs that don’t require advanced education and skill levels.

Chinese officials have long recognized that the hukou system needs fundamental reform. Recent changes urge small cities in particular to open up residency rights to migrants. But they only aim to legalize roughly a third of the nearly 300 million migrants by 2020. Meanwhile, the biggest cities — where most jobs are — continue to limit access of migrants to public services and local schools.

Schooling is only part of the problem, too. Authorities need to do much more to make urban housing affordable for couples and families.

Currently, the average rural resident earns about 14,000 renminbi annually (around $2,100) while urban real estate sells for $167 per square foot. (By comparison, Zillow estimates the price per square foot in the U.S. at $119, nearly a third less.) If parents can’t afford apartments bigger than shoeboxes, they’re not going to bring their kids to live with them.

And finally, especially given that many workers are choosing to return to the countryside or not to leave in the first place, China needs to bridge the yawning disparities between urban and rural areas. Financing and investment is currently steered overwhelmingly to already wealthy provinces and urban centers such as Beijing, Shanghai, and Shenzhen. Urban incomes are already three times that of rural. City-raised youth are seven times more likely to attend college.

Until China addresses this gulf, the prospects for millions of rural children will continue to shrink. That’s going to be a problem for the country, not just the countryside.

*The author is an associate professor of business and economics at the HSBC Business School in Shenzhen.

Christopher Balding