Poverty Alleviation in Rural China
The great reduction of the numbers of rural people in poverty is one of the greatest, most spectacular achievements made in China over the past 30-plus years of reform and opening up.
The great reduction of the numbers of rural people in poverty is one of the greatest, most spectacular achievements made in China over the past 30-plus years of reform and opening up. In this chapter, we will look back on and summarize the course taken in rural poverty alleviation over the past 30-plus years, focusing particularly on analysis of the successes and failures of rural poverty alleviation. Such analysis is of both great practical significance and is also significant for theoretical guidance for selecting future poverty alleviation institutions.
1 Poverty Alleviation in Rural China Prior to the Beginning of Reforms
The status of poverty alleviation in current rural development and amid institutional changes
Primary rural poverty alleviation measures prior to reforms
Increasing the Rights of Rural Population to Occupy and Use Their Land (Natural Resources)
Improving rural infrastructure
Improving basic rural education and basic rural healthcare conditions
Building a social security system based in communities
Achievements and issues
2 Evolution of Poverty Alleviation in Rural China Since 1978
During this period, the Chinese government improved transaction conditions for agricultural products and increased rural incomes by increasing the prices of agricultural products. The comprehensive purchase price index for agricultural products increased 66.8% from 1978 to 1985; these price increases accounted for 15.5% of growth in rural incomes. With the household contract responsibility system and agricultural product prices rising, rural per capita net incomes grew 132%. The per capita rural daily calorie intake grew from 2300 in 1978 to 2454 in 1985.5 The number of rural population living in poverty, per poverty standards set by the Chinese government, fell from 250 million in 1978 to 125 million in 1985, and the incidence of poverty fell from 30.7 to 14.8%.6
“Eight-Seven Poverty Alleviation Plan”: 1994–2000
During the period covered by the “Seven-Eight” plan, China adopted a series of new poverty alleviation policies and measures, including the following: (a) Making adjustments to officially designated “poor counties” per the distribution of population living in poverty. (b) Greatly increasing poverty alleviation investments from the central government. From 1994 to 2000, the central government made average annual poverty alleviation investments of 16.14 billion yuan, in the form of development capital, disaster relief through work program funds, and subsidized poverty alleviation loans, a 210% increase over the period from 1986 to 1993, with a 340% increase in fiscal poverty alleviation funds. (c) Further strengthening scientific and technological poverty alleviation. The government issued the “Scientific and Technological Poverty Alleviation Planning Compendium,” which called for dispatching scientific and technological cadres and personnel to poor areas, made arrangements for “spark plan” scientific and technological poverty alleviation loans, established model scientific and technological poverty alleviation programs, and supported agricultural industrialization in poor areas. (d) Encouraging social power and social capital to participate in and support poverty alleviation projects through east-west cooperation, non-governmental organizations, governmental departments, large and medium enterprises, and international organizations to become involved in targeted poverty alleviation programs in poor areas. (e) Gradually adjusting targets of poverty alleviation and giving more direct support to poor households.
In addition, relevant government departments also issued other policies and measures to benefit poor areas and poor rural households. For example, officials implemented the “Compulsory Education Program in Poor Areas,” transportation poverty alleviation, and cultural poverty alleviation, as well as policies encouraging development of rural transportation, electricity, radio, and television, the scope of benefit of which included poor areas. Officials launched the Great Development of the West strategy and policy for returning arable land to forests in 1998; these played an important role to a certain extent in alleviating rural poverty.
Strategic objectives for poverty alleviation during this period were as follows: (1) Resolving problems of insufficient clothing and food for the rest of the poor population; (2) solidifying the achievements made in the previous stage and ensuring that people already lifted out of poverty not experience more problems of insufficient clothing and food; and (3) improving infrastructure and the environment in poor areas. To this end, the government established the guiding policy for rural poverty alleviation development of “guidance by the government, social participation, self-reliance, development and poverty alleviation, and comprehensive development.” The major change highlighted by the guiding policy was the inclusion of the two important concepts of social participation and comprehensive development within the strategy, which established social participation as a key area in rural poverty alleviation development from a high strategic vantage point, and broke through the former thinking of poverty alleviation focused solely on increasing incomes. Officials thus included irrigation works, transportation, electricity, and other infrastructure construction in poor areas, as well as science and technology, education, health, culture, and other social development enterprises, within the strategy for development-oriented poverty alleviation.
Primary methodsAfter 2001, officials in China rolled out three important poverty alleviation measures: whole-village advancement, transfer and training of labor in poor areas, and industrialization. These three measures, in addition to the three previous strategies of voluntary population movements, scientific and technological poverty alleviation, and social poverty alleviation became the fundamental framework for rural poverty alleviation development in this stage.
Whole-village advancement. This program called for moving poverty alleviation objectives down from the county level to the administrative village level, and also concentrating poverty alleviation investments over a certain time period in a small number of villages with concentrated impoverished populations, completely eliminating restrictions keeping these villages poor, and lifting entire village populations out of poverty. A total of 148,000 such villages were designated around the country, 20% of all administrative villages in the country, and accounting for 80% of the rural poor population in China.9
Transfers and training of labor in poor areas. The central government established a concrete plan for transfers and training of labor in poor rural areas and also set aside dedicated funding for training programs.
Agricultural industrialization. Poverty alleviation through agricultural industrialization includes the following: planning and constructing regional-oriented industries with special characteristics over contiguous regions per local resource advantages, market demands, and the direction of industrialization; building production bases for agricultural products in poor regions and providing pre-production, in-production, and post-production services to rural poor households, to give rise to industrialized operations that incorporate trade, industry, and agriculture as well as production and marketing; providing preferential policies to support development of mainstay enterprises; and exploring interest-sharing mechanisms between mainstay enterprises and poor rural households, to bring about win-win situations for households and industries.
Voluntary movements of population. Beginning in 2001, poverty alleviation through population movements (also called poverty alleviation in different locations or ecological population movement poverty alleviation) grew continuously stronger. The central government proposed the guiding policy of “guidance by the government, voluntary participation by the masses, policy coordination, and seeking real results.” Officials also established six principles for this program: coordination between poverty alleviation and ecological construction; integration of voluntary participation by the masses; comprehensive planning, and policy protections; first develop then move; suiting measures to local conditions and seeking real results; act according to one’s abilities and progress gradually and in good order.
Science and technology. Building model townships and villages for science and technology on the basis of local characteristics in poor regions; driving the advancement of characteristic industries with science and technology and supporting the development of a slew of special pillar industries in poor regions; building information service stations and launching science and technology information poverty alleviation initiatives; exploring solidification of achievements of poverty alleviation through science and technology and driving mechanisms for growing rich; and launching the work of science and technology training and popularization, and propagating scientific and technological information and achievements to poor regions.
Social poverty alleviation. This includes aid in sites specified by government public institutions or large enterprises, coordinated poverty alleviation in eastern developed regions and western poor regions, and poverty alleviation with participation from social organizations and individuals.
Second, whole-village advancement programs and focus poverty alleviation work counties saw a rapid increase in rural incomes. From 2002 to 2006, rural per capita net incomes grew 47.7% in focus counties and 51.7% in focus villages (not excluding price factors), higher than the national averages at the time by 2.9 and 6.9%, respectively.
Third, there was a degree of growth in the number of rural laborers from focus counties and villages working elsewhere. From 2002 to 2006, the proportions of such workers in focus counties grew 50 and 49.77% in focus villages, higher than nationwide averages for laborers having been trained and working in state or other bodies by 1.5 and 2.1%, respectively.
Rural poverty alleviation since 2007
Key Policies and Measures
Building the nationwide rural minimum living standards guarantee program, including all rural poor below the poverty line within the system.
By the end of September 2015, 49.72 million rural population in the country were covered under the system, accounting for seven percent of the national rural population. The per subsidy amount under the program by that time was 139 yuan.10
Two big adjustments to rural poverty alleviation standards and an expansion of those eligible for rural poverty alleviation programs.
Before 2008, China’s poverty line had been set at a purchasing power of less than one US dollar per day. In 2008, that standard was increased by one third. In 2011, the standard was again increased from 2010s average of 1274 yuan up to 2300 yuan, an increase of 80.5%. The new poverty alleviation standard was now set at a purchasing power of USD $2.2 per person per day, slightly higher than the World Bank’s standard of USD $1.9 per person per day.
Clearly implementing policies that integrate dedicated poverty alleviation projects, industry poverty alleviation, and social poverty alleviation, to form a comprehensive system of poverty alleviation.
Establishing contiguous, particularly impoverished regions as the main battlegrounds for poverty alleviation development and returning the focus of development-oriented poverty alleviation to regional development. The “Chinese Rural Poverty Alleviation Development Compendium (2011–2020)” established the Liupanshan mountainous region and 13 other contiguous particularly impoverished regions as the primary battlegrounds for rural poverty alleviation development for 10 years.
Implementing a precise strategy
The Chinese government began implementing a precise poverty alleviation strategy in 2014. The use of precision targeting of poor population, precise diagnosis of the causes of poverty, and precise aid were all more highly targeted measures to help the rest of the poor population leave poverty.
Accelerated reduction of rural poor population and gradual effectiveness of minimum living standards program on poverty reduction.
Per 2008 rural poverty standards, there was a reduction of 7.625 million from the rural poor population from 2006 to 2010, accounting for a 23% increase in the average annual rate of decrease of the poor population from 2000 to 2006, before the minimum living standards program was established. Most particularly in the first year of the program’s existence, 2007, there was a reduction of 13.78 million from the rural poor population, gradually displaying the important effect of the program on rural poverty alleviation.
Increases to rural incomes in focus poverty alleviation counties were rapid, and the gap between the national average level and these counties closed. Since 2007, rural incomes in focus counties have grown faster than national average rural income growth rates, closing the relative disparity between these counties and the rest of the nation. The proportion of rural per capita net income growth in focus counties to the nationwide averages (assuming the nationwide average value is 100) was stagnant for many years after 2000, but then grew from 53.7% in 2006 to 62.9% in 2014.
Infrastructure and Social Services Conditions were Further Improved in Poor Regions, Closing the Gap Between These Regions and the Rest of Rural China
3 Innovations in Poverty Alleviation System in Rural China: Lessons and Experience
Innovations in China’s rural poverty alleviation system
Innovation in Poverty Alleviation Strategy
Transition from the strategy of guiding poverty reductions through economic growth with no poverty alleviation objectives into a strategy of development with targeted objectives.
Transition from aid-oriented poverty alleviation to development-oriented poverty alleviation, and a strategic change toward an integration of social security and development-oriented poverty alleviation beginning in 2007. Before 1986, the Chinese government provided primarily emergency policy-oriented aid to vulnerable rural groups. After 1986, the Chinese government’s primary means of poverty alleviation was development-oriented, supplemented by temporary policy-oriented aid. This strategy was replaced in 2007 by a strategy combining development-oriented poverty alleviation and institutionalized social security, the focus of which was replacing previous policy-oriented temporary aid with the institutionalized rural minimum living standards guarantee system.
Strategic transition from giving aid to poor regions toward more targeted aid to poor counties, with a focus on poor villages, as well as beginning to implement a strategy combining development of large poor regions and bringing poverty alleviation into villages and households.
Strategic shift from single projects to comprehensive poverty alleviation.
Innovations in Governance Structure
Innovations in capital management
Primary experience of innovations to China’s rural poverty alleviation system
Establishing Development as the Central Institutional Design for Poverty Reduction
Choosing the model of innovations to the poverty alleviation system of “problem—study—testing—adjustment—dissemination”
High levels of emphasis on the role played in innovations to the poverty alleviation system by international organizations, NGOs, and academic institutions
The government’s attitude toward adopting tests and innovations in the poverty alleviation system has been open and enlightened
4 China’s Experience in Rural Poverty Reduction
Comprehensive poverty reduction methods
On the strength of the trickle-down growth strategy based in development of the market economy, the development of market organizations, industrialization, and urbanization have become the primary fountainhead of rural poverty reduction.
Using the poverty alleviation strategy of targeted development as a support, officials have improved the availability of property for poor people and increased the ability of poor people to benefit from growth.
Using social development and the establishment of the social security system as guarantees, officials have helped prevent vulnerable groups from further marginalization.
Using poverty alleviation strategies of moving people away from ecologically vulnerable regions and regions not suitable to human habitation as a supplement, officials have improved the ability of these special groups to leave poverty on their own strength.
The roles of the government, the market, and social organizations in poverty reduction
The government’s decisive role in rural poverty reduction
The foundational role played by the private sector in rural poverty reduction
The positive role played by social organizations in driving up social support and innovations in poverty alleviation
Innovation in poverty alleviation and constantly improving methods
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