For what I know, in Chinese countryside there are a lot of unregistred children. For the state they don't exist, even if they regularly attend school.
Many countryside family, have more than one child, this is pretty common in China, and since they could not afford to pay the saction money, they just don't declare it to the state. Local goverments usually close one eye on the issue and allow these children to attend school like everyone else.
But recently, chinese goverment allowed citizen to have up to 2 children, so in the future, the trend maybe change.