Tackling China’s poverty problems

Hidden away in a sandstone gorge, just south of Taiyuan in centrally located Shanxi province is a remnant of old China. Cave houses, sculpted into the soft soil, lie dotted around the now barren river valley.

The poor have come out of the caves in Shanxi province
The poor have come out of the caves in Shanxi province

Once-used power lines and loudhailer poles pay silent testament to the fact that this area was only recently vacated. In fact, at the mouth of the valley, a new village has sprung up where former troglodytes can still be found.

Old Weng was one such person. Now living in what is considered to be a modern house he remembered with only a slight hint of fondness his early childhood, “the sand retained the heat in winter and remained cool in summer. However, the house was very backward and I prefer the facilities that my new home has, like running water.”

Weng is just one person that has benefited from the country’s ongoing economic miracle. Declaring 250 million people to be living under the poverty line 20 years ago, government statistics now say there are only 30 million.

Juggling figures

President Hu Jintao recently declared that this reduction was not sufficient.

To qualify for developed world status China needed to eliminate poverty, no small task given that outside figures point to 90 million living in technical poverty, but a challenge that Hu feels can be won.

The variation in figures lies with the method of calculation.

China defines poverty differently

China defines poverty differently

International norms use a universal figure of a dollar a day. China has adopted a system that aims to reflect local prices and associated cost of living, a figure that equals $0.77 a day.

Even so, a recent government report faced up to the fact that there were still a high proportion of people living on the edge of this line and that given “unfavourable natural conditions, a weak social insurance system and their own poor comprehensive ability, the people who now have enough to eat and wear may easily fall back into poverty.”

Rural blight

Predicting a policy shift next year on aspects of rural health, Professor Zhang Liuxiu of the Centre for Agricultural Policy believes there is no room for complacency, given China’s ascendancy to the WTO.

“When you look at the regions where poverty exists, predominantely countryside areas, there are certain advantages in low labour costs but until the product produced is of international quality these areas will remain uncompetitive,” he said, suggesting WTO entry could be a poisoned chalice as foreign foodstuffs enter the market.

In pointing to the countryside, Zhang has highlighted the area most at risk of the effects of poverty.

Busking in Beijing: The cities attract young rural Chinese

Busking in Beijing: The cities attract young rural Chinese

In areas where salaries can average $125-188 a year, a compulsory yet fee-based education system, potentially crippling private health costs and illegal local government fees combine to provide a challenging system of existence.

For labour and gender expert, Tong Xin, these characteristics are particularly noteworthy among certain sections of rural society.

“In society today, there is serious discrimination against impoverished women. A family preference for boys always ensures that limited tuition fees will be spent on daughters, leaving women with very few opportunities,” Xin said.


One result of such conditions has been a steady rural-urban migration with an estimated 100-150 million people on the move.

Although the movement is officially still frowned upon, as it could lead to shantytowns and urban unrest, the economic advantages to be gained have been noted. Remittances sent home have greatly boosted local economies.

Sichuan province, with a population of 86 million and an annual government budget of $363 million, last year recorded a postal transfer of funds heading to local families worth more than $450 million.

Often only taking menial jobs, migrant workers find that the difference in urban wages can be as much as a yearly rural salary in just one month.

Rather than just relying on economic migration to redistribute wealth, the government has been actively trying to combat the sources of poverty with varying degrees of success.

In some areas, China has asked locals for project proposals

In some areas, China has asked locals for project proposals

The early nineties witnessed a massive transfer of resources into local government coffers with the idea that they would then distribute the funds appropriately. This however, did not go according to plan.

“The aim was to generate rapid productive growth so local governments ploughed the money into factories, hotels and karaoke bars,” explained Nick Young, chief editor of China Development Brief. “They simply invested in ill-conceived plans.”

Zhang was less forgiving, “there were plenty of cases where there was a deliberate misuse of funds as opposed to a misguided use.”

Pointing out that many counties were (and still are) running fiscal deficits, the extra cash came in handy for paying off a backlog of debt, Zhang said.

Local iniative

Recently though, the government has tried to place control of resource allocation directly into the hands of the impoverished. Individual communities are supposed to submit proposals concerning project ideas.

As an idea, Beijing University sociologist, Professor Xia Xueluan has mixed views, “local people know what they want but when we are talking about the really backward areas where there is no infrastructure, these places are not mature enough to handle this responsibility.”

The government appears to be recognizing these concerns by suggesting in their report that not only should there be a more general readjustment of resources from the wealthy Eastern seaboard to the West, but that key targets should first be met in the most impoverished areas, with a particular focus on education.

China reportedly spends 3.4% of GDP on education as opposed to a UN-recommended six percent, and in the areas considered most in need the emphasis has been on building big schools in local towns.

A coal seller hawks his wares

A coal seller hawks his wares

For Zhang who recently returned from the mountainous southwest Yunnan-Tibetan border area, an archetypal poverty region, such comments are welcome.

“Already we have seen success in the ‘food for work’ programme, (village based projects that paid in food enabling farmers to sell more of their own produce).

“What we need to see now is an improvement in providing free education, but how could those in need be easily identified given the quality of public records?” he said.

This is not deterring the government, though, which having successfully launched a man into space seems set to now deal with the comparatively down to earth task of conquering poverty.

Source: Al Jazeera

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