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Poverty and Single Mothers in China

Single Mothers in ChinaDivorce serves as a primary catalyst in the formation of households with one parent. Due to the rise in divorce rates observed across several countries, the issue of single parenthood has gained significant attention on both a global and local scale.

The crude divorce rate, which measures the number of divorce decrees granted per 1,000 people, has seen a rise over the decade in mainland China. It increased from 1.85 in 2009 to 3.36 in 2019. The percentage of parents who are single and have children under 18 years old has risen from 3.9% in 2001 to 5.9% in 2016. Out of this group, 78% are single mothers in China raising their children alone.

Economic Challenges Faced by Single Mothers

From an economic standpoint, single mothers in China face challenges in accessing resources and public services available to them due to the absence of a husband. The responsibility of looking after children limits their chances of finding employment, making it challenging for them to secure jobs. As a result, families headed by women without husbands are at risk of experiencing poverty. Furthermore, due to the transmission of disadvantage and social status across generations, their children are likely to live in poverty as they grow older.

Even though single mothers in China may be part of the job market, they tend to experience less work and salary stability than single fathers. In 2016, single-mother families in Hong Kong had a household income of HKD 13,780 ($1778.20), whereas single-father families had a slightly higher figure of HKD 18,000 ($2307.70).

Single mothers, typically, allocate around 50% of their overall income towards childcare expenses monthly. This is not solely due to the difficulties faced by single moms but also because they have high hopes and dreams for their children’s future.

Sylvia Chant, a Professor of Development Geography at LSE, coined the phrase “feminization of poverty” to describe single mothers’ struggles as they strive to lift their families out of poverty.

Further Impacts of Single Parenthood

The Family Stress Model considers how maternal distress affects how adolescents internalize and externalize problems in families. This experience is incredibly challenging for mothers as they may feel negative emotions such as depression, frustration and feelings of abandonment because of the loss of their marital relationship.

Evidence suggests maternal depression was linked to lower mental health in their children because the negative emotions of single mothers could pass off to the kids.

Gender-Blind Poverty Alleviation and UN Initiative

China’s poverty alleviation policy has a general deficiency in gender sensitivity, inadequate consideration of the specific needs of poor women and a lack of emphasis on addressing single mothers’ challenges.

The United Nations Sustainable Development Goals have gained popularity in the efforts to eradicate income poverty and reduce all forms of poverty. This has led to the use of the term “preventing people from being left.” China, as a participant in this U.N. initiative, has implemented one of the poverty alleviation programs globally.

On the other hand, The Sichuan Haihui Poverty Alleviation Center, an NGO based in Chengdu, has launched a fundraising initiative that focuses on a group: mothers. The project, called “Moms Wishes” — Making Single Mothers Dreams Come True, aims to select 40 mothers between the ages of 25 and 45 from Daying County, Sichuan Province. These mothers should have a family income below 1,000 yuan ($138). The project’s objective is to provide assistance to help these women fulfill their dreams whether they are related to parenting, purchasing items or personal development. Additionally, the long-term goal of the project is to establish support networks (both in person and online) and systems that can benefit women who are raising their children alone.

Single mothers deserve recognition and appreciation. This includes those who may be considered unconventional, facing challenges in their journey and the determined individuals who willingly take on the responsibility of parenting alone. There is also a need to acknowledge the ones who have chosen to divorce for their children’s betterment and well-being. Currently, these incredible women are raising 19 million children.

–  Aysu Usubova
Photo: Flickr

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Using the Internet to Combat Rural Poverty in China

Combat Rural Poverty in ChinaChina is the world’s largest developing economy. In 1978, 97.5% of the rural population lived in absolute poverty. Since then, the Chinese government has considered the issue of mass poverty, particularly in the rural regions of southern and western China, to be one of its central focuses. To combat rural poverty in China, the government has adopted the Targeted Poverty Alleviation Strategy (TPA) (i.e. industrialization, social security, education, housing and government compensation for the neediest families). From 2012-2019, rural poverty’s average annual reduction rate reached 51.06%. Finally, in 2020, the government announced the elimination of absolute poverty. Despite these successes, relative poverty remains extremely prevalent in China’s rural south and west, especially in ethnic minority areas. As things stand, the democratization of the Internet appears to be the next challenge to overcome in the fight against rural poverty in China.

Digital Finance in China

In 2021, China had 1.011 billion Internet users, comprising 71.6% of its total population. As smartphones and the Chinese Internet spread, so do digital finance services such as mobile payment, online banking, online insurance and online investment tools. All of these increase the accessibility of formal financial services for impoverished people who previously lacked access to them, according to PLOS ONE.

China leads the world in the ubiquitous use of digital financial services. According to PLOS ONE, for each point increase in China’s digital finance aggregation index (DFAI), the probability of rural absolute poverty decreases by 10.27% while the probability of rural relative poverty decreases by 18.31%. Specifically, digital finance alleviates rural poverty in China by spurring four developments: the decrease of credit constraints, the increase of access to information, the expansion of social networks and the promotion of entrepreneurship.

The rural poor often struggle with the high cost of agricultural loans from traditional banks. Digital finance solves this issue by compiling massive amounts of online user information to grant loans much more liberally than traditional banks ever could. Easier access to loans and capital has the effect of promoting rural entrepreneurship. Next, digital financial services offer the rural poor timely information about agricultural production, employment opportunities, etc. which help them remain economically stable. Finally, these services also provide social capital, allowing the rural poor to network with friends and family. One example is WeChat Pay, which applies the Chinese tradition of gifting red envelopes to the digital market. This increases the circulation of online money and raises income for the rural poor.

The Benefit of Internet Policies in Rural Areas

The ethnic minority areas of Aba, Ganzi and Liangshan in Sichuan Province are the most economically underdeveloped in Southwest China. It would be appropriate to use those areas as a case study of how government investments in the Internet have produced positive economic effects. Central and municipal governments have put money toward a Communication Infrastructure Investment (CII) with the intention of developing the Internet in underdeveloped regions, thus facilitating e-commerce and other economic activity.

Indeed, in recent years, villagers in ethnic minority areas have begun selling agricultural products on popular e-business sites like Taobao, Alibaba, Amazon and Jingdong, which have helped lift sellers out of poverty. The Internet also provides platforms and venues for industries like health and tourism. Data analysis from the years 2000-2018 indicates that pro-Internet investments and policies in Aba, Ganzi and Liangshan are positively correlated with local GDP for years one to four years and per capita income for the entire time.

Playing a Crucial Role

The Internet proved especially useful during the COVID-19 crisis. According to the China Internet Network Information Center, 98% of people in rural areas living in poverty had access to fiber-optic Internet in 2020, compared to only 70% in 2017. Users sold their agricultural products online to maintain a stable income amidst COVID-19 layoffs and the slowing of business. The Internet also allowed them to donate money, fostering a community-based financial support system in rural regions.

Overall, it appears that the Internet plays a vital role in combating rural poverty in China. It provides new platforms that allow people to receive financial capital while enabling entrepreneurs to market and sell their products.

– Eric Huang
Photo: Unsplash

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Digital Retail in China 

Digital RetailWhen considering the needs of those in poverty, a demographic often lacking consistent access to basic necessities such as food, shelter and clean water, advancements in digital retail may seem an unnecessary luxury. However, in recent years, many have noted the positive impact of the digitization of commercial services on economic growth in China; despite being “the world’s third largest and fastest-growing major economy,” 13% of China’s population (almost 200 million people) still live below the poverty line of $5.50 a day as of 2021.

Advantages of Digital Retail

One of the main advantages of digital retail is its ability to overcome geographical obstacles: rural workers are now able to promote their products and services to a much larger consumer base than previously. They are also now able to contribute to the development of entire industrial chains in e-commerce. Think tank China Watch attributed the creation of over 28 million jobs in rural regions of China to the expansion of online retailing and, in 2019, digital sales reached almost $16 billion in more than 760 impoverished counties. Marginalized groups in particular, such as the elderly and women with children, have benefitted from gaining access to customers and resources that might otherwise lie beyond their reach.

The expansion and implementation of digital retail in urban areas can also come with additional financial resources: digital access to loans and insurance can provide support and protection for burgeoning businesses. Key players in China include MYbank, which granted more than 4 million contactless loans within impoverished counties in its first five years (2015-2020), and JD.com, whose digital agricultural loan collaborations in the first two years (2017-2019), worth approximately 1 billion yuan ($143.5 million), reported no overdue repayments or defaults.

The Barriers

Despite the progress so far, there are still challenges and nuances that need consideration. Many of the above-mentioned developments require a certain level of technological infrastructure to operate, which many rural and impoverished regions have not yet reached. Almost 30% of the Chinese population is still without internet access, rendering these services unattainable to them, according to a 2021 study. The same study noted a “digital divide” in the nation, whereby the expansion of digital inclusive finance significantly alleviated poverty rates in the more developed eastern region of China yet showed “no significant effect” on the “relatively backward in development” western region.

Ongoing Efforts

In 2019, Xubei Luo, senior economist at World Bank, discussed attempts to facilitate e-commerce for marginalized groups: a village agent to assist locals in navigating digital retail platforms, make payments for villagers so that the latter only pay once they are satisfied with their product and bypass the need for villagers to make their own website results in a “lower threshold for the less advantaged to participate.” She equally noted the possibility of government assistance through “strategic subsidies.”

Looking Ahead

In the face of poverty, the expansion of digital retail in China has brought tangible benefits, enabling rural workers to reach a wider consumer base and contribute to local economic growth. The accessibility of digital loans and insurance has provided crucial support to emerging businesses, fostering financial stability. Although challenges remain, efforts are underway to bridge the digital divide and ensure that marginalized groups can participate in and benefit from the opportunities offered by e-commerce.

– Helene Schlichter
Photo: Flickr

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China’s Poverty Reduction Plan

China's poverty reductionSince 1980, the number of people living in absolute poverty in China has been reduced by 800 million. This has coincided with China’s sustained GDP growth for the past two decades and 8% growth in 2021. However, for China’s poverty reduction to continue, the country needs to address issues of income inequality and lack of human capital development.

How Poverty is Measured

In 2020 President Xi Xing Ping announced the “complete victory” of his campaign to eliminate poverty. He claimed this because everyone had met the Chinese government’s extreme poverty line of $2.25 income per day. But, according to the World Bank, an “upper-middle income” country such as China should use a poverty line of $5.50 a day. At this level, China’s poverty reduction still appears to have performed well, reducing the percentage of people below the poverty line of $5.50 from 98% in 1990 to 17% in 2018.

However, China now has a similar income per capita that the United States had in the 1960s when the US set its poverty line at $21.70 (adjusting for inflation). At this poverty line, the US had less than one-quarter of its population in poverty. In comparison, applying a poverty line of $21.20 to China today over 80% of the population would be in poverty. This suggests that China is far from achieving “complete victory” in eliminating poverty.

Problems with Mass Mobilization

During the last decade, China relocated hundreds of millions of rural people to new city apartment complexes. Unfortunately, many cannot afford the city rents. In fact, the current Chinese Premier Li Keqiang recently noted that 600 million people cannot afford city rents. As the New York Times reported in 2013, “Top-down efforts to quickly transform entire societies have often come to grief, and urbanization has already proven one of the most wrenching changes in China’s 35 years of economic transition.”

Lack of Investment in Human Capital Development

Also, according to a 2021 article in The Diplomat, China has not invested in rural education and human capital development. That means 70% of the workforce, which engages in labor-intensive, low-skill jobs, hasn’t completed high school and therefore does not qualify for the retraining programs for better-paying jobs. In 2019, the manufacturing and construction sectors employed 46% of the migrant workforce. In addition to low wages, migrant workers encounter more safety hazards.  They also lack access to social welfare protections available to others.

RCEF: Pushing Quality Rural Education

To continue to reduce poverty, China will need to address these issues. This will become increasingly important as China loses its comparative advantage in the labor-intensive markets, and increasingly relies on innovation to drive growth. Luckily, non-government organizations such as the Rural China Education Foundation (RCEF) are taking the lead to promote quality education in rural areas of China. The RCEF is focusing on helping the left-behind young and elderly.  It innovates with its community-based and student-centered curriculum rather than focusing strictly on test prep.

Access to Education for All through AI Investment: Squirrel AI

On top of this, China’s mass implementation and investment in artificial intelligence (AI) is helping to provide access to education for all. Derek Li’s Squirrel AI is a good example of this. Li found that conventional online training failed because it didn’t engage students for more than a 14-minute stretch. Squirrel AI uses adaptative AI technology to teach, evaluate, test and train students. The AI technology simulates the methods and responses of the highest-rated teachers.

As Li says, “AI technology is at a point where it can disrupt the education industry that has not changed for hundreds of years, by providing every single child with access to the best teacher for that individual child’s needs.”  Squirrel AI also teaches students methods and thought processes anchored in imagination and creativity. It is one of the top two adoptive AI companies globally. The company has also opened 1800 offline learning centers that provide educational access to students in rural areas. This was especially important in times of COVID-19.

Thinking Ahead

If China’s poverty reduction is to continue at a more sustainable rate, further development of quality education and other means of human capital development will be important. Hopefully, this development will also help increase the wages of the lowest wage workers who still live at a level of income that is not viable.

– Reuben Cochrane
Photo: Flickr