A couple of years ago I wrote a post about the phenomenon of Chinese speakers forgetting how to write characters because of their reliance on Pinyin (i.e., romanization) inputting schemes. Even those who were once literate in characters notice a distinct regression in their ability to write characters by hand. For school children who are in the process of learning to write characters, the addiction to electronic devices (computers, cell phones, etc.) that write the characters for them when Pinyin is entered in many cases means that they never do become proficient in writing the characters without the help of their gizmos.
Parents have been agonizing over declining character-writing skills for more than a decade, but now the situation has reached such an alarming stage that educational authorities are beginning to speak of a cultural crisis and are being forced to take decisive action. Movements springing up in various cities to combat character amnesia / illiteracy are described in articles such as "Literacy drive for gadget-crazy Chinese kids" and "Writing wrongs of 'character amnesia'".
Decrying the loss of cultural heritage that comes from forgetting (or never learning) how to write characters and a consequent alleged estrangement from "the Mother Tongue", these proposals and schemes emphasize two things: reading texts in Literary Sinitic (Classical Chinese) and calligraphy. Some of the earlier attempts in this direction went by the name dújīng yùndòng 读经运动 ("Movement for Reading Classics").
So, working together, parents and educational authorities do have a plan, but in my estimation it is the wrong plan, one that will only further drive a wedge between children and the Chinese writing system. Instead of living, vital, contemporary literature, children are being forced to memorize ancient primers in a dead language and pore over texts like the Zhuang Zi and the Analects that are very difficult to understand, even for classical scholars.
To add insult to injury, the students are often being asked to give up time from their noon recess to focus on these extremely painful and boring tasks, which will certainly not endear them to these "traditional" pursuits, especially considering that their days are already jam-packed with more classes and study / memory sessions than most students in the West would ever tolerate.
So what is the solution? There are several possibilities. One is simply to succumb to the machines as an inevitable part of modernity. I still remember when scientists and engineers were adept at using slide rules; it was integral to the profession to be able to use a slide rule. When hand-held electronic calculators first appeared, at first purists spurned them as being almost immoral, though they soon became ubiquitous. Does anyone employ a slide rule now?
Another means for coping with character amnesia is to let students insert Pinyin in character texts when they can't remember how to write various characters. There are two precedents for that already: Japanese kana and the pedagogical practices of the Zhùyīn shìzì, tíqián dúxiě 注音识字提前读写 (Phonetically Annotated Character Recognition Speeds Up Reading and Writing) program. See "How to learn to read Chinese".
Of course, there must be many other ways to ameliorate declining character literacy skills in China, but I will leave it for readers to discuss them in the comments. One thing is certain: any initiatives that confuse the Mother Tongue(s) with the writing system are doomed to failure. I would like to point out that the emphasis on calligraphy and classical elements such as chéngyǔ 成语 ("set phrase", but usually mistranslated as "idiom") of the Confucian Institutes is a good example of inappropriate pedagogy being exported to what are meant to be Mandarin language classrooms for non-natives.
[Thanks to Mark Swofford and John Rohsenow]