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Which one is correct? If both are correct, are there any differences in meaning?

  1. For children, the age of 3 is very critical time, because they develop their language skills rapidly at this age.

  2. For children, the age of 3 is very critical time, because they are developing their language skills rapidly at this age.

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The Present Simple is used for facts or known facts about the future but The Present Continuous is used for things which are true at the moment but not always.
Plus that statements about rules of nature and the way the world is, are in the present simple tense.

So, in your case, "A" is the correct answer.

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