This dissertation examines the nature of education at the senior high school level in Kunming, China, through a participant observation study in four high schools. It discusses Ronald Dore's theory of a 'diploma disease' in the context of the four schools, and the variants which affect it at the level of participants. The dissertation illustrates that the 'backwash effects' which are generated by the National University Entrance Examination are entrenched in the education system and have significant adverse effects on students and teachers. The academic and vocational streams of education are compared and contrasted as providing different paths through the opportunity structure and different outcomes for social mobility. The dissertation analyzes the selective and social distributive functions of senior high school education in Kunming, and suggests that informal methods outside of entrance examinations, such as the use of guanxi and monetary payments, are gaining influence in these realms. As these methods become more widely utilized in the face of increasing competition to enter university, expressions of discontent from those educational participants who are adversely affected are also becoming more apparent.