Poverty Eradication in China: What has been achieved?

China pulled more than 800 million people out of extreme poverty after launching economic reforms in the 1970s. (AP photo)

Beijing: China claimed last year that it had achieved a long-announced goal of lifting all its people out of extreme poverty.

President Xi Jinping declared a “great victory” that the Chinese Communist Party had wanted to achieve before its centenary in 2021.

But what do the numbers say?

What is considered poverty?

The poverty line in China is around $ 2.30 per day – slightly higher than the World Bank minimum of $ 1.90 but below what is recommended for measuring high-income countries.

Local officials have gone door-to-door to determine who are poor, measure income, housing conditions, lack of medical insurance, and whether family members have dropped out of school.

Some families with large cars or agricultural equipment were automatically disqualified, regardless of their other circumstances.

What has been achieved?

The World Bank said China lifted more than 800 million people out of extreme poverty after launching economic reforms in the 1970s.

The extreme poverty rate decreased from 66.3% in 1990 to only 0.3% in 2018 – to offset more than 60% of the decrease in global poverty, according to the Center for Strategic and International Studies.

Everyone now completes compulsory education, in proportion to the average level across the world’s high-income countries, and the United Nations says that child mortality has also declined in the past two decades.

“For the vast majority of Chinese, life has improved dramatically in the space of a generation,” said World Bank Country Director Martin Reiser.

Are China’s claims credible?

Beijing’s official statistics are often treated with skepticism, and experts say the poverty numbers don’t tell the full story.

There have been hundreds of thousands of corruption cases linked to poverty work, said Terry Secular, professor of economics at the University of Western Ontario.

This includes local officials who falsified the data by categorizing friends and family as poor in order to receive funding.

Sikular added that the official poverty line in China is also low when compared to average household income.

The World Bank recommends a higher benchmark of US $ 5.50 a day to measure poverty in upper-middle-income economies.

Rizer estimates that about 13% of China’s population still lives on below this level.

Is it sustainable?

Secular says the funding for poverty alleviation is large in absolute terms but also represents “a small percentage of government revenue”.

After macroeconomic growth has helped raise living standards over recent decades, Beijing must now look for newer strategies for those on the cusp of the poverty line, she says.

In many locations, local governments – which have largely borne the brunt of improving living standards – face limited financial resources.

Many of them are indebted, have invested heavily in infrastructure to tackle poverty, or have taken advantage of short-term tax incentives or subsidies.

“Reducing economic vulnerability in the future may require a greater focus on investing in skills and helping people move towards more productive jobs in cities,” added Reiser.

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