Parents have hotly disputed that theory. “The government is covering up,” says one father who lost his 11-year-old son. The tragedy has destroyed any illusions citizens might have had about the state of schools in China’s countryside, where three quarters of the population lives. Although the national government promises every child free education for nine years, the burden of funding primary schools is left to local governments. “So if the local government is poor, then there’s no money for education,” says Sophia Woodman, Asia director for Human Rights in China. That has led to fly-by-night operations like the one in Fanglin village–where a private entrepreneur reportedly contracted with school authorities to have kids assemble firecrackers, with profits going toward school expenses and local officials.

Despite high-flown rhetoric about the value of education, Beijing devotes only 2.4 percent of China’s GDP to its public schools–less than India and one of the lowest levels in the world, according to the World Bank. By comparison, Taiwan spends nearly 7 percent of its GDP on education. “It’s very common for rural teachers to take money out of their own pockets to pay for individual students’ fees or classroom supplies,” says Woodman. They don’t have much to give: teachers in Fanglin are paid $12 a month, when they’re paid at all. In other parts of the country faculty have been known to organize students as day laborers, helping farmers harvest crops in return for a little grain or vegetables. In Shandong province, one local teacher said last week, some of his colleagues were encouraged to sell their semen in order to raise money, “but we felt that was undignified.” (Chinese sperm banks favor donors who are considered “intellectuals.”)

The enterprises are not entirely frowned upon by authorities. In the 1980s, when Beijing urged all work units to launch sideline businesses in accord with Deng Xiaoping’s maxim “To get rich is glorious,” schools took the cue as well. As a result, schoolhouses have been known to rent space to factories, restaurants, mom-and-pop shops and even karaoke parlors. In a case uncovered last June near Wuhan, an insurance company enlisted local schools and the education commission to act as insurance agents, forcing policies on hapless parents and students. One 12-year-old girl tried to kill herself by swallowing poison after exorbitant “insurance fees” bankrupted her family.

It’s rare for entire classes to be dragooned into moonlighting, as apparently happened in Fanglin. But child labor remains common in China, especially in the countryside. Underage workers are rife in the rural retail sector. They work in restaurants, beauty salons, metal workshops, karaoke bars and saunas (some become sex workers). Last year a factory near Shenzhen was caught using kids to manufacture toys for McDonald’s Happy Meals. “The students were working there because their school fees are too high,” says Parry Leung, a researcher with the Hong Kong-based Christian Industrial Committee. (Production of McDonald’s toys was halted due to “violations” of its code of conduct, though its auditors could not confirm the child-labor reports.) Around the same time, 35 people–half of them children–died when a fireworks workshop exploded in a village 30 miles from Fanglin.

The next blast may come from China’s peasants themselves, who are fed up with such conditions. With rural incomes lagging far behind those of city dwellers, farmers have been protesting against everything from skyrocketing taxes to inadequate medical care. About a thousand demonstrators gathered outside the Fanglin school last week, and citizens mobbed the car of the provincial governor when he visited the site early Wednesday. (The school’s principal and the local party secretary were both detained, partly for their own protection.) Trying to assuage the anger of parents, authorities offered $3,660 in compensation for each dead child. “Many families don’t think that’s enough,” says father Ding Mingxing. “Some of them didn’t even want to have the corpses removed from the school in a kind of protest.” The ghosts of the Jiangxi schoolchildren will likely haunt Chinese officials for quite a while.