The narrator explains that there wasn't much to differentiate himself and Luo from the other teenagers sent to the mountain Phoenix of the Sky, which was named for its insane height. The mountain could only be climbed on foot, and the only westerner to travel to the region was a French missionary in the 1940s. The missionary was advised against climbing the mountain itself, as it was inhabited by armed and dangerous opium growers.
Luo and the narrator’s new home for re-education is extremely far removed from anything they've ever known. The remoteness only adds to the sense of limbo they experience. The fact that the mountain can only be climbed on foot also begins to create the sense that life there is hard work.
The mountain was home to 20 villages, each of which took in five or six intellectuals from the city. The village where Luo and the narrator are sent, however, is so poor that it can only take in the two of them. They are assigned to the house on stilts, a mostly unfurnished public building. The house soon becomes famous in the village because of Luo's alarm clock, which features a rooster that crows when the alarm goes off. It is the first clock the village has ever seen, and it entrances the village. Every morning, the headman comes to the house on stilts to watch the clock, and at 9am he whistles and yells for the villagers to get to work.
The clock is representative of the more cosmopolitan way of life of the city, and it is therefore in direct opposition to the idea of the noble peasant. The headman's fascination with the clock, however, indicates that despite the goals of the Cultural Revolution, the city maintains an air of mystery and intrigue that can ensnare even the most rural peasants.
The narrator explains that the work that he and Luo do consists primarily of hauling human and animal feces to the fields in "back buckets." One morning, Luo sneakily turned the clock back an hour. He and the narrator delighted in this, as it helped temper their resentment towards the opium growers turned "poor peasants" by the Communist regime.
The narrator begins to suggest that the peasants aren't necessarily thrilled with the events of the Cultural Revolution either. His phrasing makes it seem as though becoming a poor peasant was a demotion, not a promotion, which complicates the peasants' role in the narrator's re-education.
The mountain is exceptionally rainy, and Luo and the narrator find this extremely depressing. Luo, in particular, begins to suffer from insomnia. One night, Luo asks the narrator to play something on the violin. As he plays, the narrator gloomily thinks of how poor his chances are of getting to go home: three in a thousand, on account of his parents being enemies of the state. As he plays a Tibetan song that has been rewritten to glorify Chairman Mao, the narrator thinks that Luo's chances of getting to go home are even worse.
This Tibetan song has been rewritten in a similar way that Luo renamed the Mozart sonata to make it about Mao. This develops the idea that censorship in Mao's China has a distinct goal: to flatter him, extol his virtues, and further develop him as the hero of the country. Once his name has been added to music, the music is acceptable. This suggests the vapidity of censorship.
The narrator says that because he plays the violin, he might someday be able to perform communist music in the nearby city Yong Jing. Luo is only skilled at storytelling, which the narrator says is charming but underappreciated by everyone but the village headman. The narrator explains that due to the remoteness of the mountain, nobody in the village had ever seen a film, but the headman delighted in hearing Luo recount stories from films he'd seen. The headman decides to send Luo and the narrator to see a film in Yong Jing, which they must then relate back to the villagers, taking as much time in their retelling as the film itself runs.
Notice that the narrator doesn't see any end to re-education, or indeed, to Mao's rule of China—this is evidence of the narrator's youth and inexperience. Despite Luo being a city boy, his one talent is interestingly one that is highly valued by this rural society. The way that the headman chooses to use Luo's talent shows that the headman is interested in more cosmopolitan things like movies.
The headman sits and times the "oral cinema show" with Luo's clock. Luo brilliantly recounts the film, asking the villagers questions to keep them interested. His performance is such a success that the headman promises to send them to see another film and compensate them for the four-day round trip journey as though they'd been working in the fields.
Luo manages to marry the urban with the rural with the success of the "oral cinema show," and he's handsomely rewarded for it. This shows how much the headman values storytelling, and it suggests once again that he might not be as opposed to urban ideas as Mao might like him to be.