Fourteen Stanford researchers addressing global poverty through a range of academic disciplines are receiving a total of $4.6 million in awards from the university-wide Global Development and Poverty (GDP) initiative.

Their projects, which are the first to be funded by the GDP, deal with challenges of health, violence, economics, governance and education in the developing world.

“GDP seeks to transform scholarly activity and dialogue at Stanford around the topic of global poverty, so that the university may have a greater impact on poverty alleviation in developing economies,” said GDP faculty co-chair Jesper B. Sørensen. “By focusing on placing a small number of big bets, GDP encourages researchers to think big, and to move beyond the conventional way of doing things. We are thrilled by the inaugural set of awardees, as they demonstrate the creative, inter-disciplinary approaches that will make Stanford a leader in this area.”

The GDP initiative is part of the Stanford Institute for Innovation in Developing Economies (SEED) and is administered in partnership with Stanford's Freeman Spogli Institute for International Studies (FSI). The GDP is co-chaired by Sørensen, the faculty director for SEED and the Robert A. and Elizabeth R. Jeffe Professor of Organizational Behavior at the Graduate School of Business; and Mariano-Florentino Cuéllar, senior fellow and director of FSI and the Stanley Morrison Professor at Stanford Law School.

SEED, which seeks to alleviate poverty by stimulating the creation of economic opportunities through innovation, entrepreneurship and the growth of businesses, was established in 2011 through a generous gift from Robert King, MBA '60, and his wife, Dorothy.

Through complementary areas of focus, GDP funding and other SEED research initiatives will stimulate research, novel interdisciplinary collaborations and solutions to problems of global poverty and development. GDP research aims to pursue answers to crucial questions that are essential to an understanding of how to reduce global poverty and promote economic development. That includes governance and the rule of law, education, health, and food security – all of which are essential for entrepreneurship to thrive. By contrast, other SEED research focuses on innovation, entrepreneurship, and the growth of businesses in developing economies.

Since 2012, SEED’s Entrepreneurship and Innovation in Developing Economies Award program also has doled out 22 awards and seven PhD fellowships to help support and scale businesses in developing economies. Among the $1 million in funded projects were studies of how to improve the livelihoods of small-holder cacao farmers throughout the tropics; how to identify startups with high job- and wealth-creating potential in Chile; how political accountability affects the ability to attract investment in Sierra Leone; and how managerial practices affect trade entrepreneurship in China.

First GDP Awards

The first 14 GDP award recipients are professors of economics, political science, law, medicine, pediatrics, education and biology, and senior fellows from FSI, the Woods Institute, and the Stanford Institute for Economic Policy Research (SIEPR).

“Each of these projects cuts across disciplines, reflects innovative thinking, and has the potential to generate crucial knowledge about how to improve the lives of the poor around the world,” Cuéllar said. “These projects, along with a variety of workshops engaging the university and external stakeholders, will help us strengthen Stanford’s long-term capacity to address issues of global poverty through research, education and outreach.”

Among the award recipients is Pascaline Dupas, an associate professor of economics and senior fellow at SIEPR. Dupas, along with faculty from the Center for Health Policy and Center on Democracy, Development and the Rule of Law, will launch the Stanford Economic Development Research Initiative using GDP funds.  This initiative will focus on collecting high-quality institutional and individual-level data on economic activity in a number of developing countries over the long term, and making these data available to scholars around the world.

Beatriz Magaloni, an associate professor of political science and senior fellow at FSI, is receiving an award to lead a team focused on criminal violence and its effects on the poor in developing economies, and the practical solutions for increasing security in those regions.

Douglas K. Owens, a professor of medicine and FSI senior fellow, was awarded an award to help him lead a team that will develop models to estimate how alternative resource allocations for health interventions among the poor will influence health and economic outcomes.

Stephen Haber, a professor of political science and history and a senior fellow at the Hoover Institution, received an award to bring together Stanford researchers interested in examining the long-term institutional constraints on economic development. Their goal will be to provide policymakers with a framework for determining the conditions under which particular innovations are likely to have positive payoffs, and the conditions under which resources will likely be wasted.

Other projects will address the educational impacts of solar lighting systems in poor communities; identifying interventions to improve the profits and safety among poor, smallholder pig farmers in Bangladesh and China; the role of law and institutions in economic development and poverty reduction; and how to rethink worldwide refugee problems. Awards are also being provided to researchers focused on microfinance, online education and teacher training.

The project proposals were reviewed by an interdisciplinary faculty advisory council chaired by Cuéllar and Sørensen. 

“We were very encouraged by the impressive number of project proposals from a wide range of areas and are looking forward to introducing several new capacity and community-building activities in the fall,” Sørensen said.. “This wide range of research initiatives will form a vibrant nucleus for Stanford’s growing community of scholars of global development and poverty.”

In early 2014, Stanford Graduate School of Business (GSB) launched a new organization structured to further increase the research support of our faculty and their teaching objectives. That group, called Centers and Initiatives for Research, Curriculum and Learning Experiences (CIRCLE), supports areas of academic focus including social innovation, entrepreneurship, value chain, data and analytics, and corporate governance, in addition to China-related work.

With staffing and a facility now grounded in Beijing, the GSB is transitioning management of our China initiatives to CIRCLE led by Wendy York-Fess, Assistant Dean and Executive Director. Within CIRCLE, Frank Hawke, located in Beijing, is the director of GSB China-related activities designed to continue the focus on building a bridge between China and Silicon Valley.

Going forward, updates on China programs will be communicated through other GSB online channels. Content hosted on this site will remain available, and we encourage you to engage with our rich library of videos, podcasts, and stories.

China 2.0 originated from within the Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), which was active from 1998 through fall 2013. Led by faculty co-directors William F. Miller and Henry S. Rowen, with Associate Director Marguerite Gong Hancock, SPRIE was dedicated to the understanding and practice of innovation and entrepreneurship in leading regions around the world. SPRIE fulfilled its mission through interdisciplinary and international collaborative research, seminars and conferences, publications, and briefings for industry and government leaders.

“We are grateful to have made our home at two remarkable parts of Stanford, the Shorenstein Asia Pacific Research Center until 2011 and then the Graduate School of Business,” said Henry Rowen. William Miller added, “The impact of SPRIE’s work among leaders around the world has been made possible through wonderful relationships with faculty colleagues across the university and beyond, active Advisory Board members, generous donors, engaging alumni and students, strong corporate and government partners, and extraordinary staff.”

SPRIE’s work resulted in publications in journals and monographs, as well as three books published by Stanford: The Silicon Valley Edge (2000), Making IT: The Rise of Asia in High Tech (2006), and Greater China’s Quest for Innovation (2008), including editions in Chinese, Korean, and Japanese. During the most recent phase of work, SPRIE included four major projects: the Silicon Valley Project, Smart Green Cities, the Stanford Project on Japanese Entrepreneurship, and China 2.0.

Through conferences at Stanford University and in Beijing, to date China 2.0 has engaged with more than 100 speakers, dozens of media, and more than 2,500 Stanford faculty, students, and alumni. China 2.0 seminars have enhanced student educational experiences and facilitated cross-campus faculty and student interaction. China 2.0 content has become part of our classrooms, online resources, and also reached hundreds of thousands of viewers in English and Chinese.

As part of the GSB reorganization, we are pleased to announce that Marguerite Gong Hancock is now the director for a new CIRCLE research effort called Stanford Project on Emerging Companies 2.0 (SPEC 2.0), where she will focus on supporting faculty research on entrepreneurship, as part of the Center for Entrepreneurial Studies.

While our organization has changed, Stanford Graduate School of Business remains committed to bringing together executives, entrepreneurs, investors, policy makers, academics and students through a number of existing and emerging programs related to innovation and entrepreneurship around the world.

In front of a packed audience at the Stanford Center at Peking University, Victor Koo, Chairman and CEO of Youku Tudou Inc., described the convergence of China and Silicon Valley in terms of innovation. "Success in China is a matter of localization," Koo commented in his keynote address at the 2014 China 2.0 Forum, because many industries remain fragmented at the local level. This fragmentation has necessitated the transformation of China's internet ecosystem into a hotbed of innovation, going a long way to catch up with Silicon Valley.

The convergence described by Koo also means that China's internet space and its players are increasingly globalized. WeChat, for instance, recently made headlines for its new partnership with LinkedIn in China. Hugo Barra, Vice President of Xiaomi, a Chinese smartphone maker, shared the company's international expansion strategy. With its international headquarters in Singapore, Xiaomi is expanding into Singapore and plans for many more countries by the end of the year, the compant aspires to become a truly global company. Vaughan Smith, Vice President of Special Projects at Facebook, shared with the Forum audience how Facebook represents an opportunity for thousands of developers in China to reach a worldwide audience, citing the success of the game Family Farm, which was developed by Beijing-headquartered FunPlus and "has the highest retention rate" of any game on Facebook worldwide.

Shift to mobile

Arguably one of the most disruptive forces in the internet industry today, Koo explained how the shift to mobile is even more drastic in China, where hundreds of millions of people in rural areas and small cities have little access to personal computers and rely on smartphones to access the internet. In addition, the widespread use of public transportation in China, in contrast with America's car-centric culture, means that Chinese commuters spend much more time on their mobile phones.

Koo noted that various internet companies have struggled to adapt to mobile, while others such as Tencent's WeChat, have prospered. Valued at $30 billion, China's popular social media and messaging app counts around 300 million users and an expected revenue of $1.1 billion in 2014.

Yongfu Yu, CEO of UCWeb Inc., discussed how disruptive the shift to mobile could be in the near future, predicting that the surge in apps that has followed the shift to mobile will lead to the emergence of an "app browser," enabling the integration of all apps on a unified platform. In such a scenario, this 'mega app' would challenge traditional web browsers such as Firefox or Google Chrome.

The multi-screen internet

The ubiquity of mobile phones does not put an expiration date on the use of computers and TVs, according to Koo. Instead, it has led to the emergence of the multi-screen internet. This phenomenon is particularly visible in China, where users continuously switch from their mobile phones to computers and TVs, and vice versa. Think about this: these users watch a show on their smartphones or tablets in the subway as they commute to work, then resume the same show once at home on their TVs or computers. According to Koo, the multi-screen internet unequivocally represents one of the major changes that content strategists and marketers have to deal with.

The integration of offline and online

O2O (Online-to-Offline) is another key trend that is dramatically reshaping many industries and the internet industry worldwide, Koo said. For example, Captain America 2's promotion in China took place offline and online with a premiere in Beijing and content broadcast simultaneously on Youku Tudou.

The convergence of online and offline spaces is probably faster in China than anywhere else, noted Koo, due to the large number of sectors highly regulated by the government. The central role of the state in entire industries has left a void for private companies to fill since they don't have to compete with an incumbent offline company also competing in the online space. For this reason, Koo argued that "offline industries in China are changing much faster and in a more fundamental way than in developed countries like the United States."

The Obama administration’s policy of “re-balance” toward Asia, that began as early as 2009, is now increasingly under stress, as those in the region question American staying power and China emerges as a challenger to U.S. dominance. As the territorial disputes in the East and South China Seas in recent months have demonstrated, China’s relations with the region and the United States have become visibly strained, bringing the U.S. re-balance policy into question and raising concerns about security tensions and the danger of conflict. 

U.S.-China relations are heading, for the foreseeable future, into “a very scratchy time,” predicted Kenneth Lieberthal, a respected senior China scholar at The Brookings Institution, in his keynote speech delivered at the annual Oksenberg Lecture on June 3 at the Shorenstein Asia-Pacific Research Center.

Lieberthal told a standing room audience in Encina Hall that while the U.S. attempt to temper its relations with China and others has “worked quite well over time,” now, “at a geostrategic level, we seem to be sliding with increasing speed toward an inflection point in U.S.-China relations.”

Lieberthal was joined by a panel of China experts, including Cui Liru of the China Institutes of Contemporary International Relations (CICIR), and Stanford’s Karl Eikenberry and Thomas Fingar, distinguished fellows at the Freeman Spogli Institute for International Studies, and Jean C. Oi, director of the Stanford China Program.

The discussion was part of the Oksenberg Lecture, an annual dialogue that functions as a policy workshop on U.S.-Asia relations, named in honor of late professor and senior fellow Michel Oksenberg (1938–2001). Oksenberg was a noted China specialist, who served as a senior member of the National Security Council and is credited as the architect of the normalization of relations with China under the Carter administration in the late 1970s.

Points of tension in the U.S.-China relationship have been increasingly visible. Senior American officials have assailed China for its aggressive actions toward its neighbors over the Diaoyu/Senkaku Islands and in South China Sea, including its latest altercations with Vietnam and the Philippines. The United States recently indicted five members of China’s People’s Liberation Army for carrying out cyber espionage against U.S. technology companies.

Incidents like these have prompted both countries to throw harsh words at each other, leading to a situation of brinkmanship. However, Lieberthal pointed out that tense relations between the United States and China are certainly not new. Most notably, relations took a nosedive in 1989 when China cracked down on democratization protests at Tiananmen Square, in 1999 after the accidental bombing of the Chinese Embassy in Serbia, and in 2008, in response to the global financial crisis.

The U.S.-China relationship has been riddled with periods of distrust in the past. But now, “the speed and scale of China’s economic growth, especially over the last two decades, has also increased concerns, on all sides, that the evolving distribution of power may create new frictions and suspicions,” Lieberthal said.

Yet, refusing to work with each other is not an option, the senior scholar, who also served in the Clinton administration, told the audience. Without the United States and China in conversation, progress in multilateral areas such as climate change and trade would falter, he argued. Given the two countries’ position as the world’s largest economies, the international system would effectively be constrained if the two were entrenched in long-term bitterness.

Lieberthal recognized the common admonition, “if we treat China as an enemy, it will surely become one,” saying this warning could be applied to both sides. China and the United States must make greater efforts to manage and mitigate tensions.

“The question is whether we can prevent bad things, not only specific conflicts, but the political tensions and politics that make cooperation on major issues very, very difficult at best.”

He then outlined a few steps that could help China and the United States sort out their disputes. His recommendations began with the need for strong determination on the part of top political leaders to move things forward and the importance of clear, consistent use of vocabulary when discussing issues.

As a final point, but one that was offered as a contingent factor to success, Lieberthal said U.S.-China relations and both countries’ roles in greater Asia will depend on “how effective each of us is in dealing with domestic reforms,” because, “that will determine how dynamic, how vibrant, how innovative, and how secure we feel.”

______________________________________________________ 

During the lecture, Ret. Lt. Gen. Karl Eikenberry shared his observations from the Shangri-La Dialogue, an inter-governmental security forum held from May 30 – June 1 in Singapore. The Dialogue has in recent years become a gathering of premiere defense ministers to discuss security issues in Track I and “quasi-track” meetings.

Afterward, Eikenberry talked with Shorenstein APARC about key highlights and implications that emerged from the Dialogue:

Shangri-La Dialogue

Photo credit: Flickr/The International Institute for Strategic Studies 

Media reported a tense environment overlaid the Dialogue. What was the general atmosphere there?

The remarks at the Shangri-La Dialogue by Japanese Prime Minister Abe and U.S. Defense Secretary Hagel on the one hand, and Chinese General Wang Guanzhong, made clear very different views on the causes for tension surrounding various maritime sovereignty claims in the East and South China Seas. Still, if you read the full text of all three speeches and the Q&As that followed, there is still great emphasis placed on dialogue and common interests. And in the many meetings that took place between national delegations on the margins of the conference events, the emphasis was on cooperation. 

What revelations at the Dialogue were surprising?

I think the degree to which dissatisfaction with China’s assertive behavior in pursuing its maritime claims was expressed by many of the participants – not just the United States and Japan. Vietnam, the Philippines and India were explicit. Analysts have said the only China (through threatening behavior) could contain China by catalyzing a counterbalancing response. From the results of the Dialogue, I think this is correct.   

Japanese Prime Minister Shinzo Abe emphasized values and international law throughout his keynote speech. What is your take on this?

The Prime Minister did emphasize both democracy and rule of law during his prepared remarks and answers to questions from conference participants. He was drawing an obvious distinction between Japan’s and China’s political systems and commitment to approaches to resolving territorial disputes. I think the Prime Minister is trying to establish Japan as a leader in East and Southeast Asia, and wanted to make clear what he views as important differences between the Japanese and Chinese “models.” 

U.S. Defense Secretary Chuck Hagel referenced China’s suspension of the U.S.-China Cyber Working Group. What direction do you think the cybersecurity dialogue will go now?

It was unfortunate that China suspended its participation in the U.S.-China Cyber Working Group after the U.S. Government’s indictment of five People’s Liberation Army officers for alleged cyber theft. The U.S. Government has been providing the PRC Government with evidence of cyber theft being conducted by entities in China and has failed to receive any meaningful response so the indictments seem warranted. It would seem that the Cyber Working Group is precisely the forum to discuss this matter and the many related to managing the cyber domain with agreed rules and procedures. Working Groups provide a forum to address disagreement and disputes. I think China’s response was counterproductive and hope the government will indicate a willingness to resume the dialogues in the near future.

Where do you see the regional security conversation heading next?

The risk is that security dialogues will be divided into two camps – one led by the United States and its close allies and partners, and the other by China – somewhat isolated at this time but seeking to entice Asian nations to bandwagon to its side. Perhaps further regional economic integration can facilitate a more common approach to security, but this year’s Shangri-La Dialogue is perhaps a warning that trends, for now, are not heading in a positive direction.

At every conference we attend, we hear statements from our colleagues like: “I study Left Behind Children, the most vulnerable children in China.”

Each year in the media, journalists write literally thousands of investigative reports about Left Behind Children. In nearly all of these articles, the reporter interviews young children that live with their grandparents because their parents are working far away in the city. The conclusion of these reports is almost always the same: Left Behind Children are one of China’s largest social problems. Society and the government need to pay special attention to them.

When you look at the websites of China’s ministries and their provincial/sub-provincial counterparts, one can find that more than 10 ministerial systems – among them the Ministry of Education; Ministry of Health; Center for Disease Control; Ministry of Civil Affairs; All China Women’s Federation and more – have special programs to meet the needs of China’s Left Behind Children: China’s so-called “most vulnerable children”.

With this background, let us be clear about the three main messages of this month’s column:

1. Left Behind Children are NOT the most vulnerable children in China.
2. Left Behind Children do NOT need any special treatment.
3. Policies that target Left Behind Children are misguided.

Wow!

(Is that what you are thinking?)

We actually have made these same statements at seminars in front of fellow academics, at meetings with NGOs, and in conversations with policy makers and government officials. Their responses are almost always the same: “Wow!”

Do we really believe these statements?

The answer is a “qualified yes.”

Yes: Because these are absolutely true statements. In almost every dimension that we can think of, Left Behind Children are not the most vulnerable children in China. Other children in poor rural areas (such as those who live with their parents) are in even greater need of more education; of better nutrition; of higher quality health care,

But, qualified: Because, while all of this is true, Left Behind Children are still vulnerable and in need of the nation’s support.

In other words, Left Behind Children are NOT the most vulnerable children in China. All children in poor rural areas are in need of more education, better nutrition, and higher quality health care. Left Behind Children certainly have tremendous needs. However, other children in poor rural areas—including children living with their parents—have either equal or even greater needs. And with all of the attention lavished on Left Behind Children, these other vulnerable children are being systematically overlooked.

We hope that the media, government policy makers, academics who work on under-resourced areas, and all concerned readers of CaiXin Magazine will take the time to read about the facts.

The facts will tell our story.

But, before we get into the facts, let’s take a minute to describe where the facts came from.

If you have been following our column since last fall, you know that our organization, the Rural Education Action Project (REAP), has been working in poor rural areas across Western China for the past ten years. Our mission is to help narrow the gap in education, nutrition and health between children in poor rural areas and children in the rest of China. To do so, we conduct “action research.” In carrying out action research, we not only identify the problems facing rural children and their families, we also experiment with solutions. Partnering with foundations, NGOs and government agencies (as well as implementing our own action research projects), we seek to find out what types of programs, projects and investments lead to improvements in rural education, nutrition and health … and which ones do not. We then work with government agencies to upscale the successful ones.

In the past we have worked on many issues: school nutrition, life counseling; computer assisted learning; infant nutrition; intestinal worms; poverty; school drop outs; and more. In total, over the past 10 years, we have conducted more than 20 action research projects in poor rural schools and villages. In conducting these in-the-field experiments and partnering with many creative and influential groups, we have discovered many new ways to help increase human capital in poor areas and have been associated with several successful efforts to upscale our small projects across whole counties, prefectures, provinces and indeed the whole country.

In the course of doing our work, we always evaluate our projects and seek to identify impact. And in carrying out these evaluations, we conduct a detailed baseline survey before each and every project. Not only were all of the samples randomly selected, we also know for each child what type of family he was living with: (1) Both mother and father live at home; (2) Mother living at home, father not living at home; (3) Father living at home, mother not living at home; (4) Left Behind Children (mother and father both live away from home). We have objective measures of 14 different outcomes, including health, nutrition, mental health, and many others. In total, our surveys include data from more than 130,000 children and their families

Armed with this data, our approach is simple: We will compare the nutrition, health and educational outcomes of children from Type 1 families (children living with both parents) to the outcomes of Type 4 families (where both parents live away from home and children are cared for by their grandparents or other relative—Left Behind Children).

As empirical economists, we like to let the data speak. What do the numbers say?

Nutrition

Both Left Behind Children and children living with both parents have the same incidence of anemia. A full 27 percent of both types of children are malnourished. Their levels of hemoglobin, a measure of iron deficiency, are also identical.

Health

The rates of stunting and wasting among Left Behind Children is not low. However, the weight for age indices (WAZ) and height for age indices (HAZ) are more favorable than those of Children Living with their Parents. The body mass indices of Left Behind Children also are more favorable than the body mass indices of Children Living with Their Parents.

In the case of intestinal worm infections there is even a larger gap. The prevalence of intestinal worm infections is high among Left Behind Children, at 25 percent. To be clear, this means that more than one out of four school-aged children live and go to school with worms in their intestines. However, the prevalence is even higher among children living with both parents: fully 39 percent are infected with worms.

Education

To compare the educational performance of Left Behind Children and children living with both parents, we gave standardized exams in math, Chinese language and English. These are the three main academic subjects that students must learn in the Chinese school system. In other work, REAP researchers have shown the huge gap between children from poor rural areas and children from China’s cities. We showed that, on average, children in poor rural areas perform much, much worse than children in urban areas. Poor rural children are nearly two years behind by the time they reach fourth grade.

So while all of the different subgroups of poor children perform poorly, on average, Left Behind Children actually outperform children living with both parents in all subjects. To be clear, the children who score the lowest on their math tests, their Chinese language tests, and their English tests are not Left Behind Children; they are children living with both parents.

These trends continue even as children get older. The drop out rate from junior high school (which is technically supposed to be zero) is equally high for children living with both parents as it is for Left Behind Children.

Mental Health

There is one set of outcomes for which Left Behind Children do show the most vulnerability: mental health. Around 37 percent of Left Behind Children had high levels of anxiety, and 33 percent were “lonely.” These levels were, indeed, higher (although only slightly higher) than those of children living with both parents.

The numbers have spoken, and they have spoken clearly. Left Behind Children are NOT the most vulnerable children in China. All children in poor rural areas are in need of more education, better nutrition, and higher quality health care. Left Behind Children have tremendous needs, no question. However, other children in poor rural areas—including children living with both parents—have equal or even greater needs.

What can we say about this message except: “Wow!”

A postscript: Resources versus Care

We really do not know why it is that, with the exception of mental health outcomes, Left Behind Children perform either equally as well or even better than children living with both parents in terms of nutrition, health and education. Our guess is that it is almost certainly because there is some sort of “care versus resources” tradeoff at play. Without question, children living with both parents receive more care than Left Behind Children. However, with the high and rising wage rates in China, if both parents of a Left Behind Child are working full time, they will have access to more resources than the families of children living with both parents. If both parents are working in the city, their monthly income will be much higher than a family in which both parents are working on the farm. Hence, it appears as if access to more resources helps, at least in part, to offset the negative effects of the absence of care.

And perhaps the care of Left Behind Children is not as bad as everyone thinks. In interview after interview with parents of Left Behind Children, parents told us that they would never leave their child at home if Grandma and/or Grandpa were not capable of giving quality care. So, it may be that the additional resources that are brought in by migrant parents coupled with care from capable grandparents are jointly enough to allow Left Behind Children to outperform (or match) children living with both parents in most measures of nutrition, health and education.

No matter the reason, it is clear that children living with both parents are being overlooked by the popular media, by policymakers, and by academics. While it is premature to suggest that Left Behind Children are no longer in need of help, it is equally unconscionable to imagine that rural children living with their parents are not in need of the same social assistance that is granted to Left Behind Children. We need to come up with a policy solution that will allow all poor children better access to the resources they need to thrive.

About this series:

REAP co-directors Scott Rozelle and Linxiu Zhang wrote a ten-part series for Caixin Magazine titled, "Inequality 2030: Glimmering Hope in China in a Future Facing Extreme Despair." See below for more columns in this series:

> Column 1: Why We Need to Worry About Inequality

> Column 2: China's Inequality Starts During the First 1,000 Days

> Column 3: Behind Before They Start - The Preschool Years (Part 1)

> Column 4: Behind Before They Start - The Preschool Years (Part 2) 

> Column 5: How to Cure China's Largest Epidemic

> Column 6: A Tale of Two Travesties

>Columns 7 & 8: China's Widest Divide

> Column 9: China's Most Vulnerable Children

> Column 10: Why Drop Out?

> Column 11: The Problem with Vocational Education

> Column 12: Reforming China's Vocational Schools (in Chinese)

An increasing number of Chinese internet companies are whetting U.S. investors’ appetite in China’s burgeoning technology industry. Eight Chinese companies have already successfully listed on a U.S. exchange so far in 2014—including the largest ever offering by a Chinese internet firm from JD.com Inc., which raised $1.78 billion when it IPOed on May 22.

As CEOs who have gone through the process of taking a Chinese company public in the U.S., Chenchao (CC) Zhuang of Qunar and David Xueling Li of YY Inc. shared what they view as the biggest advantages and challenges post IPO for their respective companies. YY and Qunar went public on NASDAQ in 2012 and 2013 respectively.

Although there are many advantages enjoyed by public companies, including an enhanced reputation and expanded opportunities when it comes to financing and growing the business, both Zhuang and Li commented that continuing to be innovative and a disruptive force was the greatest challenge faced by their businesses post IPO.

Fritz Demopoulos, Founder of Queen's Road Capital, moderated the panel "Post-IPO: The Next Vanguard" featuring Li and Zhuang at the 2014 China 2.0 Forum in Beijing hosted by Stanford Graduate School of Business on April 11. 

“I like school. I can’t wait to go to class.”

Zeng Lei is sitting on the steps of the old classroom building. He is 15 minutes early. But, Zeng Lei is not alone. Nine of his fourth-grade classmates are crowded around the front door, unable to keep still. Eagerly they scan the schoolyard for the teacher-supervisor to come over and open the door. They can’t wait. 

Are these the school’s top, fast-track students? Are they meeting with their teacher to prepare for the Math Olympics? Are Zeng Lei and his classmates the young, motivated geniuses that are ready to lead China into the 21^st century?

Actually, these are not the best students. Only three of ten will graduate from high school. If these fourth grade students took a math test that was also given to a group of second grade students from an urban public school, the second grade city kids would outscore Zeng Lei and his friends. Easily. In fact, there are many first graders in China’s cities that would outscore these rural fourth graders in math, Chinese and English.

So what is Zeng Lei waiting for? Why are these children—who have never been especially interested in school before—so anxious to get into the classroom?

Computers, games, learning and more

Zeng Lei and his friends are in our Computer Assisted Learning program. All of the fourth graders in his school are part of the program. We call Computer Assisted Learning “CAL” for short. It is one of the most prominent initiatives of our research group, the Rural Education Action Project (or REAP).

CAL is a game-based remedial tutoring program. Each week, twice a week, all fourth graders in a CAL school attend a 45-minute session in a computer room. Some of the computer rooms are new. We set them up. Some of the computer rooms were already there. We got them into shape for the CAL program.

But CAL is more than just hardware. On each of the computers, there are two pieces of software that REAP has created to help students in poor rural schools catch up and stay caught up. The software is calibrated to the curriculum that is being taught in the classroom. The software reviews the material taught during the week and then provides—in a game format—targeted review questions. Lots of review questions. Lots of games. Music and rhymes and riddles and challenges.

So, are we talking about a complicated new technology that is technically difficult to deliver and maintain? In fact, nothing can be further from the truth. The CAL program is made up of two simple pieces of software. One of the programs cost REAP less than US$5000 to develop. A group of Tsinghua University undergraduate computer majors created the software in six weeks during the summer of 2009. It is not copyrighted. Any one can have it. It can fit on any USB drive. The other piece of software can be purchased online for around 50 yuan. It takes about 5 minutes to install. Even I can install it—and I am a 58-year-old technology caveman. Simple. Attractive. Using off-the-shelf, low-powered computers as tutors to drill students in a way that they think is fun. 

Each class has a teacher-supervisor but with only one simple job. In Zeng Lei’s school, she speaks to the math teacher before the CAL session to find out what lesson the class covered during the week and then tells the students which icon to click. And that is about it.

So how much impact does this simple program have? We conducted a little test to find out. We picked 148 schools in 3 provinces and randomly selected half of those schools to receive the CAL program (our “CAL schools”) and half to receive no intervention at all (our “control schools”). And with such a simple intervention, the results were really nothing short of amazing.

We found that after just one year of using CAL, test scores of the students in the CAL schools were significantly higher than the students in control schools (who had no CAL program). And we conducted four more studies—a total of five separate, large-scale field experiments. In all of these studies our results were the same. Test scores rose for CAL students in migrant schools in the suburbs of Beijing. Test scores rose for CAL students in rural mountainous schools in the Qingling Mountains of southern Shaanxi. Test scores rose for CAL students from minority community schools in Qinghai. In all of these environments, test scores went up in math. Test scores also went up in Chinese. Scores on scales measuring mental health (especially anxiety) improved. Students became more confident in problem solving. All of this from two 45 minute sessions per week.

Remember, the ONLY difference between the CAL treatment schools and the control schools was the CAL program. When we ran the program for a second year—we were afraid that the initial effect of CAL might be the result of short-term student excitement rather than true change in learning behavior—we found that CAL continued to improve student learning. CAL did not eliminate the gap between urban and rural students. But the CAL program did reduce the gap significantly. 

And according to the REAP studies, students in CAL schools gained something even more important. They started to like school. During the baseline, only about 25% of students said that they liked school (in both the CAL schools and the non-CAL control schools). At the end of the school year, after several months of CAL, more than 60% of the CAL students said that they “liked” school. There was no significant change in the control schools. With the addition of just two CAL classes per week!

So, this is why Zeng Lei lined up early outside the CAL classroom on CAL day. He could not wait to get on the computer. He could not wait to play the CAL games and answer the questions. He could not wait to learn. And for maybe the first time in his life, he really liked going to school.

China’s digital divide: The widest in the world

In this article, we are not pushing CAL. Hey: we believe every child in rural China could benefit from CAL. But, the real reason for our column is to discuss some of the fundamental structural problems of China’s rural education system. Let’s use CAL as a lens to examine some of the problems that are plaguing rural schools today.

Why is it that such simple computer games can make such a difference? There are many reasons. First and foremost, we believe it is due in large part to the simple fact that computers are new and novel for these students. The engaging and effective way in which a computer can convey information is something most of these kids have simply never experienced. Unfortunately, most rural children still do not have access to computers or other electronic technologies.

In a paper that REAP wrote and published last year, we documented that the digital divide is wider in China than in any other country in the world. In the city, just about every student has access to computers and software and other electronic learning devices. In poor rural areas, almost no student has this access.

Here are the facts: According to data on more than 10,000 students in Beijing, Shaanxi and Qinghai, we can convincingly show that the gap in computer access between urban students and rural students in Western China ranges between 13:1 and 36:1. In China’s largest cities, 80% of children have computers at home and 73% of children have Internet. In poor areas of Western China only 6% of children have computers and only 2% have Internet at home. We can find no country in the world with such a wide digital divide.

And in schools, access to computers and Internet and educational software is even more skewed: Every child in China’s cities has access to modern ICT technology in their schools; almost no students in remote rural areas do. The digital divide in China is wide indeed.

And, this digital divide has consequences for learning. As REAP has shown with its CAL programs, if you give children access to the technologies of the 21^st century—equipped with simple, fun and relevant learning software—they learn. And they have fun doing so. If they do not have access to computers, the Internet and relevant software, they miss out on that opportunity.

Lots of hardware; an absence of learning

This is a story of opportunity lost.  It is disheartening. If incompetence and institutional failure irk you, do not read any further.

The good news: In the same REAP paper that documents the digital divide, we also demonstrate that there are easy, effective ways for rural public schools to moderate the digital divide. When schools install computers; keep them maintained; have teachers that know how to use them; and teach structured, learning-based material during computer class, the students in those schools overcome part of the disadvantage of not being able to afford a computer or Internet access at home.  

The bad news: There are almost no schools in rural areas that have invested in all of the components that are needed for a successful computing program. And, there are even fewer that use modern technologies to deliver quality, learning-based curriculum that helps students learn.

Why is this the case? Why aren’t rural schools able to deliver quality educational learning to students? The answer is complicated. Certainly it is not an absence of hardware. In the current five-year plan, billions of dollars are being spent on equipping rural schools with computer rooms. In China’s poorest areas, much of the funding is allocated by the central government. Beautiful new facilities are being equipped with new, perfectly adequate computers. Over the past five years since we have been working on CAL, we have seen rows and rows and rows—literally miles of rows—of new computers. And new desks, lots of screens and plenty of other hardware. Could this mark the end—or at least the beginning of the end—of China’s formidable digital divide?

Unfortunately not. While this hardware is important, the support from above appears to stop there. There is almost nothing else provided. The new machines may have Microsoft Office Suite installed. Students are able to learn Powerpoint, Word and Excel. There are typing programs on some machines. The third most common piece of software is one that teaches students how to program in Basic. Never mind that Basic is a computer programming language that was out of date in the 1990s. But there is almost no educational software. There are almost no learning applications. One of the most common ways that computers are used in junior high schools in Northwest China is to give students a way to watch DVDs, usually the latest movies or old reruns of popular TV series. And that’s about it.

Even if there were educational software or other learning tools loaded onto these shiny new computers, it would not necessarily help. In almost no school in rural China is there a professional, trained staff member that is charged with maintaining and managing the computers. We have collected budgets from thousands of schools in Western China. There is almost never a budget for using, maintaining or replacing computers once they break down. As we all know, computers—especially those in a busy school computer room—inevitably break down or stop working. It is natural. It happens all of the time to me. It happens all of the time to all of us. When it happens, of course, we fix it. In many rural schools, however, when computers break down, they stay broke. There is no one to fix them. There is no budget to fix them with. There is no intention to fix them. The national government pays for the initial hardware. After that, the schools are left on their own. And the local bureau of education does not have the resources (or are not willing to spend the resources) for staff or maintenance.

How bad is it? In a recent project, we ran a contest: let REAP implement CAL in one set of 30 schools (the REAP schools); let educators from local bureaus of education implement CAL in another set of 30 schools (the government schools). The schools were randomly assigned—half became REAP schools; half became government schools. And there was no other difference between these schools at the outset. We were interested to find out: Which set of students would learn more? By this point we knew that CAL worked… now the question was, would CAL still work if implementation were turned over to local government?

So who won? Well, it is safe to say that REAP won before the competition started. The reason is that when many of the computers in the government schools did not work, they made no effort to fix them (at least initially). They simply did not have any budget to do so. It is difficult to run Computer Assisted Learning programs if the computers do not work. On top of that, the teams from the government did not even bother launching the program in a number of their assigned schools.

Meanwhile, before REAP launched its CAL program in the REAP schools, we had two teams of two students spend less than a week repairing and fine-tuning the computers. That’s all it took. Some computers were beyond repair; most were not. And we fixed all we could. In the end, REAP implemented the CAL program in 28 of the 30 schools that were assigned to us. We spent only around 2000 yuan or so on repairs and about 15 days of technician time. The result? 28 working computer rooms ready to educate excited rural kids.

A call for remaking computer management in rural schools

Lots of hardware. No learning software. No maintenance funds. No trained computer staff. That is the state of China’s rural computer programs today.

This is a failure of program design from the national government. The Ministry of Education should not spend any more money on hardware without first making sure the entire package is complete—computers; software; maintenance; staff. There needs to be national curriculum set up for installing effective, fun and accessible learning software in computer classes. We have shown over and over that these programs work: simple, game-based software packages are effective in raising test scores, in improving mental health, in building confidence and in making learning fun. Otherwise, buying more hardware is little more than showmanship. And a tragically wasted opportunity.

“Ask me. I will tell you I like school”

Just ask Zeng Lei. He will tell you. Since CAL came around, he loves school.

Where can you find Zeng Lei? Where is Zeng Lei? Oh, that is easy. You do not have to look very hard. He is standing in line outside the CAL computer room squirming in anticipation. He has 15 minutes to tell you all about it. He is always 15 minutes early.

About this series:

REAP co-directors Scott Rozelle and Linxiu Zhang are writing a ten-part series for Caixin Magazine titled, "Inequality 2030: Glimmering Hope in China in a Future Facing Extreme Despair." See below for more columns in this series:

> Column 1: Why We Need to Worry About Inequality

> Column 2: China's Inequality Starts During the First 1,000 Days

> Column 3: Behind Before They Start - The Preschool Years (Part 1)

> Column 4: Behind Before They Start - The Preschool Years (Part 2) 

> Column 5: How to Cure China's Largest Epidemic

> Column 6: A Tale of Two Travesties

>Columns 7 & 8: China's Widest Divide

> Column 9: China's Most Vulnerable Children

> Column 10: Why Drop Out?

> Column 11: The Problem with Vocational Education

> Column 12: Reforming China's Vocational Schools (in Chinese)