March 07, 2021

China's Victory over Absolute Poverty

R Arun Kumar

ON February 25, 2021, Chinese President Xi Jinping announced that China has achieved a ‘complete victory’ in its fight against poverty, with the final 98.99 million impoverished rural residents living under the current poverty line lifted out of poverty. With this, all 832 impoverished counties and 128,000 villages have been removed from the poverty list. President Jinping made the announcement while addressing a gathering to mark the nation's poverty alleviation accomplishments and honour model poverty fighters.

The significance of China’s achievement can be understood from the fact that the UNDP estimated that an additional 207 million people around the world may fall into extreme poverty by 2030, given the long-term impact of the pandemic. This would take the total number of people living in extreme poverty above one billion. Contrary to these projections for other countries, in China, nearly 100 million people (calculated in accordance with its current poverty line) have been lifted out of poverty over the past eight years. And since 1978, when the Communist Party of China (CPC) decided to overhaul its economic policies under its policy of ‘reform and opening’, nearly 770 million rural residents were lifted out of poverty. According to the World Bank's international poverty line, the county is responsible for over 70 per cent of the global reduction in poverty since late 1970s.

Statistics show that in the 1990s, for every percentage point increase in China's GDP, the rural poor population dropped by 0.8 per cent. In recent years, about one million people in the country shook off absolute poverty every month, i.e., one person brought out of poverty for every three seconds. The per capita net income of the registered impoverished population increased from 2,982 yuan in 2015 to 10,740 yuan in 2020. Despite the impact of the Covid-19 pandemic, China achieved its historic goal of ending absolute poverty on schedule.

China's current poverty line is multi-dimensional and was formulated according to the standards set by international organisations and taking into consideration China's peculiar national conditions. Apart from income, education, health and living standards were also taken into consideration. It set its poverty line at a per capita annual income of 2,300 yuan at 2010 constant values, or 2.3 US dollars in terms of purchasing power parity per person a day. By 2020, a person making less than 4,000 yuan a year was listed as impoverished.

The results in poverty alleviation were achieved on the foundations laid after the victory of Chinese revolution in 1949. As Xi Jinping had acknowledged, it is because of the work of earlier generations of the leaders of the People's Republic of China that laid the basis for today’s victory. In the early days, China implemented land reforms and carried out large-scale agricultural changes, alleviating poverty in rural areas. Its poverty alleviation practices passed through different stages, involving rural-economic reforms, regional development-oriented efforts and a combination of ‘broader regional and more precise approaches’.

In order to achieve its aim of building a ‘moderately prosperous society in all aspects’ by 2020, China made poverty eradication a basic requirement. In 2011, China completed its first 10-year programme for poverty alleviation and development. It was the first country in the world to achieve the 2015 UN Millennium Development Goals of halving the extreme poverty rates. What were left were regions in deep poverty. Since 2012, the government focused on these deeply impoverished areas and specific impoverished groups. It set the target of ensuring that the ‘rural poor are free from worries over food and clothing and have access to compulsory education, basic medical services, and safe housing’.

China carried out its poverty alleviation efforts under the slogan, ‘six precise measures’ and ‘five batches’. The ‘six precise measures’ are: ‘(i) precisely identifying the poor, (ii) accurate project arrangements, (iii) proper use of funds, (iv) household-targeted measures, (v) precise stationing of poverty-relief officials in villages and (vi) measurable effects of poverty relief’. The ‘five batches’ refer to lifting people out of poverty by (i) expanding production to increase employment, (ii) through relocation, (iii) providing jobs involved in protecting the surrounding natural environment, (iv) via education and (v) by providing subsistence allowances.

In 2014, China organised more than 800,000 cadres to identify poor people. In 2015, that number increased to more than two million who were responsible for verifying the accuracy of the data classifying individuals as poor. The verification process involved ‘four checks’, viz., examining housing, food stock, labour capacity, and whether there are children in school. Through such an extensive verification process, they had identified 14 contiguous areas of extreme poverty, 832 impoverished counties and 128,000 impoverished villages that need to be alleviated from poverty.

The fundamental principle guiding China’s poverty-eradication policies was, adhering to a people-centric approach and upholding the leadership of the Party and socialist system. Xi Jinping stated: “It is an essential requirement of socialism, as well as a key mission of the CPC to eradicate poverty, improve people's living standards, and gradually achieve common prosperity”. CPC always vouched that its basic aim, as dictated by the tenets of socialism and Marxist political economy are, ‘human development, eradication of poverty, raising living standards and achieving common prosperity’. “The key reasons for the victory in poverty fight lie in the political advantages of the socialist system, which can bring together resources of the whole society and generate solidarity and joint actions”. China has been able to reduce poverty in a sustained way because its social system balanced ‘fairness and efficiency’ and ‘economic development and poverty alleviation’.

CPC in its 18th Party Congress declared that “the principal contradiction in Chinese society is that between the people's ever-growing needs for a better life and unbalanced and inadequate development. The most unbalanced development is between urban and rural areas, with the latter witnessing insufficient levels of development. The intersection of unbalanced urban and rural development and insufficient rural development lies in poverty-stricken areas, especially deeply impoverished areas”. To resolve this contradiction in favour of the people and the producing classes, CPC urged local Party committees and governments to make poverty alleviation a top priority during the 13th Five-Year Plan period (2016-2020) and focus on economic and social development.

Party secretaries at the provincial, municipal, county, township, and village levels were asked to carry out the country's anti-poverty campaign. The roles of the Party and government departments at different levels were defined as ‘central planning, provincial responsibility and city and county implementation’. The main leaders of Party and government departments at all levels played a key role, ensuring ‘resource planning, policy implementation and social mobilisation’. Main officials from the country's 832 poverty-stricken counties were not permitted to transfer to posts in other areas before the counties where they worked shook off poverty.

Over 500,000 selected cadres were sent as CPC first secretaries of the villages to battle poverty from the frontline. A total of 255,000 teams were dispatched to offer on-the-ground support and over three million people were sent to the countryside as special commissioners for poverty relief, working together at the front line with nearly two million township-level cadres and millions of village-level cadres. 1,800 CPC cadre lost their lives during the course of their work battling for poverty alleviation. Nearly 1.6 trillion yuan were invested in poverty alleviation over the past eight years. From 2016 through September 2020, annual poverty alleviation funds for 832 poverty-stricken counties increased from tens of millions of yuan to 360 million yuan. All these efforts bore fruit now.

China detailed strict rules for the delisting of poverty-stricken villagers and labeling them as ‘out of the poverty trap’. Before being delisted, poor households must have a ‘stable annual per capita net income above the poverty alleviation threshold, sufficient food and clothing, access to compulsory education, basic medical services and safe housing’. This assessment was made by assessors involving universities and social organisations through sampling investigations, field verifications to carry out independent analysis and evaluate each indicator. These teams also evaluated the performance of officials involved in poverty alleviation efforts. It is only after such a stringent verification process that eradication of absolute poverty was announced.

CPC led poverty alleviation efforts are summarised as consisting of 5Ds: ‘Determined Leadership, Detailed Blueprint, Development Oriented, Data-based Governance and Decentralised Delivery’.

Xi Jinping stated: “shaking off poverty is not the finish line, but the starting point of a new life and a new endeavour, and further efforts will be made to integrate the work of consolidating poverty alleviation achievements with rural vitalisation”. With absolute poverty eliminated, China has met the poverty eradication target set out in the United Nations' 2030 Agenda for Sustainable Development, 10 years ahead of schedule. After achieving this target, China declared that it will set up a five-year transitional period to continue with assistance and supervision.