Abstract
Education is undoubtedly playing an important role in economic development. The overall illiteracy rate in China has been decreasing since 1980 but there are still some areas such as the western region and rural areas that continue to suffer from a high level of illiteracy due to the lack of capital inflow and government funding. This has indirectly affected economic growth and development in those particular areas. The government has launched various plans and policies to overcome or ameliorate the problems of educational and economic inequality, especially in the western region, and with all these efforts the government has been able to successfully reduce illiteracy and to a certain extent reduce inequality at the regional level. However, due to funding inequalities and shortcomings of government policies, education still faces daunting challenges in contemporary China.
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