As the National People's Congress Standing Committee met in Beijing to discuss the Compulsory Education Law on June 28, 2007,  Yao Lifa, a former local deputy from Qianjiang in Hubei Province, talked to Radio Free Asia about the failure of education reform in rural China thus far to stem the flow of school drop outs, the main cause of child labour supply in China.

Yao was quoted by Radio Free Asia as saying; "School drop outs are mainly in the countryside, there is a huge disparity in public investment in education between urban and rural areas, and the state's policy of 'two waivers and one subsidy' simply has not been realized in the countryside.  State funding does not reach the students because schools and various levels of government only get a proportion of their allocated funding. When foreigners hear that compulsory education is free in China, they might think everything is fine here, but that is not the case.  Free means tuition fees, miscellaneous fees and a whole gamut of other fees.  In reality, the burden of the peasants is very great."

China Labour Bulletin's 2006 report on child labour is a detailed analysis of both the supply of and demand for child labour and makes all these specific points regarding the failure of the current education system to keep children in school.  The report pinpoints the second year of middle school as the key year during which students start to drop out en masse, and Yao confirmed this in his interview broadcast 30 June 2007.

He noted that many primary school students in rural areas had to travel more than ten kilometers to school and that, in many areas, conditions were even worse for middle school students.  Discrimination against rural students who failed to keep up was commonplace and many never made it beyond their second year.  "It is in their second year at middle school that they start to drift away and go to Beijing and Guangzhou looking for work," he said.

Rural primary and middle schools are faced with a debt crisis, he said.  Delays in the payment of teachers' salaries and school building costs are commonplace, and Yao was of the opinion that "the so-called education reform had failed."

Echoing CLB's analysis of the commercialization of education and the failure of the exam focused curriculum, Yao said, "Since 2000, education has become a money making business.  Right now tens of thousands of students are cramming madly for high school exams.  They work all through the day until 11 o'clock at night.  This is a very pressurized and unhealthy form of education."