Toward a Future Without Want

By LI LI

Toward a Future Without Want

By LI LI

Poverty reduction drive upgraded to spread the fruits of development

China has dramatically lifted its official poverty line to an annual per-capita income of 2,300 yuan ($359.4) in rural areas as part of the government’s efforts to distribute the fruits of the country’s economic growth to a wider section of its population.

The decision by central authorities to raise the poverty threshold by over 90 percent from the 1,274 yuan ($199.1) standard set in 2010 was announced at a national poverty alleviation meeting on November 29.

The sharp increase brings China’s poverty line closer to the international standard of $1.25 a day, which was established by the World Bank in 2008. According to the offcial Xinhua News Agency, China’s poverty threshold is actually higher than the World Bank’s standard if measured at purchasing power parity.

A government white paper on poverty reduction released in early November shows that the country reduced the poverty-stricken population of its rural regions to 26.88 million at the end of 2010 from 94.22 million a decade ago. According to the white paper, China increased its spending on poverty reduction from 12.75 billion yuan ($1.99 billion) in 2001 to 34.93 billion yuan ($5.46 billion) in 2010, representing an 11.9-percent average annual increase. Total spending on poverty reduction during the 2001-10 period was 204.38 billion yuan ($31.9 billion).

Redefining poverty

The new poverty line will increase the population eligible for government povertyrelief subsidies to 128 million, or 13.4 percent of the rural population and nearly one 10th of the nation’s total population.

Speaking at the November 29 meeting, President Hu Jintao said, “By 2020, our general target is to ensure that the nation’s impoverished will no longer need to worry about food and clothing. Their access to compulsory education, basic medical care and housing will also be ensured.”

Hu also announced the government’s plan to lift the annual net income growth of farmers in poverty-stricken regions above the national average by 2020, bring the quality of public services enjoyed by the poor to near national levels and reverse the trend of a widening rich-poor gap.

“The drastic increase of the existing poverty gauge shows that the Chinese Government is pragmatic about the diffculties and challenges it faces in poverty reduction,” said Zhuang Jian, senior economist at the Asian Development Bank, which is committed to fghting poverty in Asia and the Pacifc. Zhuang said that instead of trying to reduce the number of people classifed as poor, this adjustment of the poverty line indicated the government is genuinely interested in raising the quality of life of China’s poorest citizens.

China’s poverty line was split into two categories before 2008: one for absolute poverty, and the other for low-income families. At the end of 2008, the two were combined as one.

In 1986, the absolute poverty standard was an annual per-capita income of 206 yuan ($32.2). After several adjustments, the poverty line was raised to 1,067 yuan ($166.7) in 2008, 1,196 yuan ($186.9) in 2009 and 1,274 yuan ($199.1) in 2010.

China began its concerted large-scale anti-poverty drive in the mid-1980s. In 1994, it unveiled a plan that was designed to secure food supplies for 80 million rural residents over seven years. This marks China’s first attempt to designate a specifc target for poverty reduction.

According to the UN, 70 percent of the people who have been lifted from poverty worldwide over the past 25 years were Chinese.

“China’s poverty reduction drive is unique in history. No other nation in history has ever been able to bring so many people out of poverty in such a short time,” Napoleon Navarro, acting Country Director of the UN Development Program China, told Xinhua.

Speaking at a news conference in Beijing last September, UN Resident Coordinator in China, Renata Dessallien, said China had already achieved three out of the eight key benchmarks outlined in the Millennium Development Goals, which are intended to help the world’s poorest by 2015. It has halved the number of people living on less than $1 a day, achieved universal primary education for children and reduced child mortality by two thirds.

“China’s success in lifting millions of people out of poverty is unprecedented,”Dessallien said.

A new beginning

CHEN YEHUA

At a meeting on November 29, Premier Wen Jiabao said local governments in more economically developed regions would be able to set even higher poverty lines. Wen said that the nation’s social security funding will prioritize rural regions, especially poverty-stricken areas.

On December 1, the Central Government unveiled its poverty-reduction plan for the next decade, in which it pledged to provide adequate food and clothing for povertystricken people while ensuring their access to compulsory education, basic medical services and housing by 2020.

As the third state-level poverty-reduction plan, the Outline for Poverty Reduction and Development of China’s Rural Areas (2011-20) says that ensuring sufficient food and clothing for the impoverished and helping them become prosperous will be a government priority over the next decade.

“The widening wealth gaps between urban and rural areas, between different regions and between the rich and the poor in China are worrisome,” said Fan Xiaojian, head of the Leading Group Office of Poverty Alleviation and Development under the State Council.

According to him, the average per-capita income of China’s urban dwellers was 3.23 times that of rural residents in 2010. The annual per-capita net income of rural residents was 5,919 yuan ($924.8) last year.

“Currently, poverty reduction not only means providing adequate food and clothing for those in need, it also means letting them live with dignity,” said Li Xiaoyun, a rural development expert at the Beijing-based Renmin University of China.

“In the past, China faced the challenge of widespread absolute poverty. Right now, its main task is to deal with the yawning wealth gap between the rich and the poor,” Li said.

Meanwhile, rural residents who have been lifted out of poverty sometimes fall back into economic hardship once struck by natural disasters or changes to the local economy.

“The difficulty in eliminating poverty, therefore, lies not only in reducing the poverty-stricken population, but also in boosting the ability of impoverished regions to initiate their own development,” said Wang Sangui, a professor at the School of Agricultural Economics and Rural Development of the Renmin University of China.

Since 2004, the Central Government has appropriated a total of 3 billion yuan ($468.8 million) in poverty reduction funds for the“Dew Program,” which focuses on training members of poor rural families in technical skills and practical agricultural techniques so that they can fnd better-paying jobs. By the end of 2010, more than 4 million people had received such training, and 80 percent of them found jobs outside agriculture.

The government has been increasing subsidies and scholarships for students from impoverished families at the primary, secondary and tertiary levels of education. From 2001 to 2010, some 42.89 million students graduated from secondary vocational schools, and most of them were from rural families or impoverished urban families.

As part of its poverty reduction strategy the government has also pledged to improve its social security network and make social security “a basic means” to ensure suffcient food and clothing for its rural population.

Established in 2007, China’s rural minimum living allowance system had covered 52.14 million poverty-stricken farmers by the end of 2010.

The rural cooperative medical care system, which was launched in 2003, had covered 832 million farmers as of June 2011, or more than 90 percent of China’s rural population. The system now allows rural residents to recover as much as 70 percent of their hospitalization fees.

China launched a pilot pension insurance program for its rural population in August 2009 and a total of 199 million Chinese rural residents had joined the program by the end of June. In 2010, the Central Government provided a total subsidy of 11.1 billion yuan ($1.73 billion) for rural residents’ pension funds, while local governments supplied 11.6 billion yuan ($1.81 billion). The Central Government pledged to provide sufficient finances to allow the scheme to cover China’s entire rural population by 2015.