In the late 1990s, Shuyang and other counties within Suqian municipality began selling off, merging and closing down schools.

ECONOMIST: Can capitalism provide a cure?

But according to residents, Shuyang halted sales in 2000 as parents began to complain about the high fees charged by the private schools.

ECONOMIST: Can capitalism provide a cure?

Here too the county had acted out of desperation: the pay for Shuyang's 11, 000 teachers was equivalent to 70% of the county's revenue.

ECONOMIST: Can capitalism provide a cure?