Rising Out of Poverty

By+Yin+Pumin

the global quest to eliminate poverty has reached a pivotal moment as the international community enters the final year of the UN Millennium Development Goals （MDGs）.

The MDGs， which were agreed on by world leaders at a UN summit in 2000， set specific goals on poverty alleviation， education， gender equality， child and maternal health， environmental stability， HIv/AIDS reduction and a global partnership for development. The goal on poverty alleviation aimed to reduce by 2015 the proportion of people living below the international poverty line in 1990 by half.

Fortunately， the goal was achieved in China five years ahead the UNs 2015 deadline. According to the World Bank， China has reduced the proportion of its population living under the international poverty line of$1.25 per day from 43 percent of the worlds total poor population in 1981 to 13 percent in 2010.

Figures from the State Council Leading Group Office of Poverty Alleviation and Development （LGOPAD）， Chinas task force for poverty alleviation， show that China lifted around 660 million people out of poverty from 1978 to 2010.

The drop in individuals living below the poverty level in China since 1990 accounts for more than 70 percent of the global total relieved poverty population， according to statistics from the UN Development Program.

China is the first developing country to achieve the anti-poverty targets of the MDGs， and it has vowed to eliminate poverty and build a moderately prosperous society in all aspects by 2020， LGOPAD Director Liu yongfu said at a conference on poverty alleviation in Beijing on December 24， 2014.

Great achievements

Since the initiation of reform and openingup policies in the late 1970s， the Chinese Government has implemented extensive poverty alleviation efforts with the aim of securing subsistence， especially food and clothing， for poor rural residents.

In 1986， the country started implementing its anti-poverty program in an organized and large-scale manner， designating 273 counties as national-level poverty-stricken counties.

In 1994， 592 counties in 27 provinces， municipalities and autonomous regions were listed as the key poverty-stricken counties to be aided at that time. The number of counties listed in the poverty reduction program has been capped at 592 since then.

Over the past two decades， the list has undergone three major adjustments， with more than half of the counties replaced. In 2001， the Central Government decided to exclude all counties in relatively wealthy coastal areas from the list， leading to 33 such counties being dropped.

To be considered for the list， counties are evaluated by factors such as the population living below the poverty line， per-capita net income and per-capita government revenue.

Zhuang Jian， a senior economist with the Asian Development Bank， said that the program has played a significant role in poverty alleviation in China by providing fiscal and technical support to poverty-stricken regions.

“In many listed counties， we have seen an improvement in the local infrastructure as well as peoples access to drinking water and electricity，” Zhuang said.

Meanwhile， many rural poor have received government help to start their own businesses.

Gao Xinqiang is a farmer who was in poverty in Qinglong County in southwest Chinas Guizhou Province. In 2008， with the help of the local government， he became a shepherd breeding more than 20 sheep.

“Before I started to raise sheep， I had to use every method to cultivate those barren and fragmented cornfields on the hillside， but all those efforts were fruitless，” Gao said.

As part of the local authorities poverty alleviation efforts， many such hillside lands have been turned into pastures for the villagers to breed their own sheep or cattle.

“I feel much more relaxed now than in the past，” Gao said. “We used to plant corn but could only fill our stomachs without saving a cent.”

Raising sheep not only frees his family from laborious work in the cornfields， but also brings in 30，000-40，000 yuan （$4，878-6，504） a year to the four-member family. Such a household income is high enough to lift Gaos family out of poverty.

By the end of 2010， China had managed to reduce the impoverished rural population， which lacked food and clothing， from 250 million to 26.88 million， which in turn lowered the percentage of rural residents in poverty from 30.7 percent to 2.8 percent， according to a paper released by the Chinese Academy of Social Sciences （CASS） in 2011.

The country has also made outstanding contributions to global poverty alleviation efforts， accounting for 76.88 percent of the total reduction in the number of people living in poverty globally between 1990 and 2005， according to statistics from the UN Development Program.

“Chinas economic success is the key factor in reducing the countrys poverty population during the past 30 years，” said Li Xiaoyun， a professor with Beijing-based China Agricultural University.

He said increasing agricultural productivity resulted in a rise in farmers incomes， and the development of small and medium-sized enterprises prompted the migration of rural labor forces to cities， where salaries also increased income for families left behind in rural areas.

“Although the rich in China are reaping more benefits， the countrys economic success still has great potential to further reduce poverty in most areas in Chinas relatively poor central and western regions，” Li said.

Along with overall GDP growth targets， the government is now focusing on raising the income of the countrys population with a current goal to double per-capita income from those recorded in 2010 by 2020.

In an effort to expand the safety net for those in poverty， the Chinese Government raised the poverty threshold to 2，300-yuan（$374） annual net income of farmers in 2011， a 92-percent increase from the standard set in 2009 at 1，196 yuan （$194）.

As per the new standard， an estimated 128 million rural residents were living in poverty at the end of 2011， accounting for 13.4 percent of the total rural population.

“The previous poverty line underestimated the number of poor people in rural China，” said Wang Sangui， a professor at the School of Agricultural Economics and Rural Development of the Beijing-based Renmin University of China. “Only 2.8 percent of the rural population was officially considered poor， which was lower than many developed countries such as the United States， which has a poverty rate of about 15 percent.”

Wang believes the new poverty standard better reflects the situation in China and will bring more resources to poverty-stricken regions.

In the following two years， China further lowered its population living under the state poverty line of 2，300 yuan per capita a year to 82.49 million by the end of 2013， according to LGOPAD figures.

A lasting battle

In a teleconference on October 17 last year， the countrys first Poverty Relief Day， Chinese President Xi Jinping pledged to make continued efforts to fight poverty. He asked authorities to mobilize all social forces to join the war against poverty， as the most arduous task in building a well-off society is raising the poor out of poverty.

China should continue innovating and take differentiated and targeted steps to deliver more people from hunger， Xi said.

Although some 660 million people were lifted out of poverty between 1978 and 2010， some 82.49 million people remain in poverty in rural areas as of the end of 2013， according to official data.

Zheng Wenkai， Deputy Director of the LGOPAD， said at a press conference in Beijing that poverty is still a salient problem in China.

“As of the end of 2013， demographically， 82.49 million people are still trapped in poverty according to Chinas poverty line， and 200 million according to the international one，” he said.

Data from the office also show that 128，000 villages in 832 key counties including those located in extremely poor contiguous regions remain poverty-stricken.

Poor people are not only poorly paid， but also beset by unavailability of water， roads， electricity， schooling， healthcare and lack of access to higher incomes or loans.

Zheng admitted that there are difficulties in solving these problems as poor populations are concentrated in extremely poor contiguous regions with substandard living conditions and inadequate infrastructure in addition to vulnerability to natural disasters.

Li Shi， a professor of economics at Beijing Normal University， said that he is not surprised by the number of those classified as impoverished as China has a huge population compared to other countries， so it is understandable that it has a relatively high population living below the poverty line.

The poverty alleviation authority also vowed in October last year to reform a program assisting counties designated as national-level poverty-stricken counties after widespread public complaints over some of these countiesmisuse of poverty alleviation funds and their reluctance to exit the program.

In December 2013， the National Audit Office reported that some funds set aside for underdeveloped regions had been misused based on an audit carried out across 19 targeted counties in six provincial-level regions of Guangxi， yunnan， Guizhou， Shaanxi， Gansu and Ningxia in April and May of that year. It audited funds appropriated to these counties from 2010 to 2012.

During the three-year period， 3.92 billion yuan （$643 million） was injected into the 19 counties with the audit checking 32 percent of it， or 1.24 billion yuan （$203 million）.

The audit found that 326 million yuan（$53 million） had been misused through false declaration， embezzlement and officials wasting on expensive gifts， banquets and tours. The results led to a total of 137 individuals being investigated.

Meanwhile， many counties took a shortsighted approach， using the fund by simply giving money to the poor instead of taking more diverse and efficient supportive measures， said Liu Zhongcheng， head of the poverty relief office of the Inner Mongolia Autonomous Region.

Eliminating poverty is not simply about giving money to the poor. The more sustainable approach is to work with them to help lift themselves out of poverty and thrive through technological， policy support and other measures， said Wang Binbin， a project manager of the climate change and poverty project with Oxfam， a worldwide development organization focusing on poverty alleviation.

In fact， the special funds for poverty relief should have been split into three parts， with 60 percent earmarked for developing industries and special agricultural items， 30 percent for infrastructure construction and 10 percent for the training of impoverished locals.

Su Guoxia， another official with LGOPAD， said that the authorities will take three steps to tackle the problem. This will include cancellation or reduction of the proportion of GDP in the assessment of poverty-stricken counties， establishing a restraint mechanism to prohibit counties from unnecessary infrastructure projects and establishing an exit mechanism for poor counties with incentives.

Meanwhile， a nationwide campaign to gather detailed information on the poor has been launched， including information on the causes and level of poverty， so the government can offer specific support， she added.

Du Xiaoshan， Deputy Director of the CASSs Rural Development Institute， said that the strategies suggested should be an effective way to tackle poverty as different development zones have different problems and needs.

“In counties that have severe ecological or environmental problems， the GDP should not be assessed. The assessment should focus on the recovery of its ecology and environment， such as air and water quality. These places should be assessed more on the stability of peoples livelihoods， such as employment levels. These strategies will allow officials to concentrate more on improving peoples living standards rather than blindly constructing roads and shopping malls，” he said.

New channels

On December 10 last year， Chinas first industry fund in poverty-stricken areas was jointly found- ed by the Ministry of Finance， China National Tobacco Corp. and State Development and Investment Corp.

This is the first such fund with government backing and independent operations， an important move to innovate poverty relief and fiscal investment， the founders said in a joint statement.

The registered capital of the fund amounted to 2.8 billion yuan （$455.28 million）， all contributed by the founders. It aims to attract more social funding into featured and potential industries in poverty-stricken areas.

According to a cooperation memorandum， the fund will target farming， animal husbandry， product processing， tourism， forestry， clean energy， logistics， high technology， culture， medical care and natural resources.

“Public finance shall improve the livelihood of people suffering poverty. The fund has made an innovative step in the countrys poverty relief work，” said Hu Jinglin， vice Minister of Finance.

Meanwhile， private enterprises are encouraged to participate in poverty alleviation. Social organizations and individuals will also be mobilized to support the poor， according to a circular issued by the State Council in early December last year.

Enterprises investing and creating jobs in poor regions will enjoy more favorable policies in taxation and other fields. Where conditions allow， they will be supported in setting up poverty alleviation funds， the circular read.

China aims to establish an environment where the government， market and society join hands， with all willing participants allowed and able to provide help to the poor， according to the circular.

LGOPAD Director Liu yongfu said at the conference on December 24 last year that the Central Government is planning to push forward the use of e-commerce platforms to more than 60，000 impoverished villages in the next five years to aid its relief effort.

Residents in poor rural areas will be encouraged to open stores on major ecommerce platforms to distribute their agricultural produce， Liu said. The authority will select 1，500 poverty-stricken villages in 2015 for an e-commerce pilot project.

The e-commerce program is part of the authoritys effort to help those with the most pressing needs and to make the most efficient use of poverty reduction funds.

“We should further increase the intensity of our relief efforts， but we should also make sure that efforts will go to those who need it most，” he said at the conference.

Several leading e-commerce companies in China have already announced plans to boost their infrastructure and facilities in rural areas to further explore the untapped market.

E-commerce giant Alibaba， for one， announced plans in October last year to invest 10 billion yuan （$1.63 billion） within three to five years to build thousands of facilities in rural China. The move will include 1，000 “county operational centers” and 100，000 “village e-commerce service stations，” extending the companys network to one third of Chinas counties and one sixth of its rural areas.