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Poverty Reduction Strategies in China
Over 68 million people have benefited since 2013 when President Xi Jinping vowed to eradicate poverty in China by 2020. This ambitious goal, if realized, will markedly reduce inequality, leading to greater job creation and sustainable development. The realization of this goal has already had a meaningful impact on social, economic and political levels.

Means to Poverty Eradication

The government has increased funding for poverty reduction, both on national and local levels. Financial institutions have enhanced contributions to increase loans and provide assistance to local projects. By creating strict benchmarks and targets for local institutions, the government has created a means of measuring goals and ensuring wise investments.

The clearly defined goals include investing in food security, education, health and housing, especially in rural areas. Providing easily accessible public services is also a useful way to achieve economic equality. By registering the poor on a national database, the government is able to effectively monitor and implement domestic strategies. This registration system also allows for a more targeted approach.

Through investments in rural infrastructure, agriculture and subsidies, the government is attempting to empower those living in the poorer parts of the nation. Welfare programs especially target the socioeconomically marginalized by using public expenditure to serve them. By making individuals and households the target of welfare schemes, rather than entire villages, the government is aiming to reach out to those who suffer the greatest deprivation and lack of opportunity.

Loans, subsidies and higher wages are economic means by which China plans to create opportunities for local businesses and self-employed individuals. Larger enterprises are also encouraged to invest in smaller businesses and development projects- this will work alongside poverty relief funds granted to farmers.

The Belt Road Initiative is a project that enhances infrastructure connectivity among different countries and continents.

Investing in such infrastructure will, in fact, impact global poverty worldwide. The establishment of the BRICS Development Bank, the Silk Road Fund and the Asian Infrastructure Investment Bank, will benefit the rest of the Global South.

The poverty reduction strategies in China also include the promotion of industrialization and urbanization, which provides poor areas with infrastructures such as roads, electricity and communication technology. Furthermore, China wants to develop tourism in rural areas in order to raise wages and create jobs.

Results of The Poverty Reduction Strategy

China has made great progress in working towards the U.N. 2030 Agenda for Sustainable Development by contributing to over 70 percent of poverty reduced around the world. According to the United Nations Development Program (UNDP), China has made great leaps in reducing poverty and reaching the benchmarks laid out in the Sustainable Development Goals (SDGs), lifting more than 500 million of its citizens out of extreme poverty over the last three decades.

Initiatives that allow rural residents to participate in e-commerce for next to no fees are set up to ensure the expansion of businesses and create a more favorable environment for investment. Companies such as Alibaba are also collaborating with the government and the U.N. to provide rural entrepreneurs with a platform to sell their goods online throughout the nation.

Anti-corruption Campaign

China has also launched an anti-corruption campaign that includes removing officials accused of bribery and political interference. By including a broadened definition of bribery and creating a regulatory body to investigate cases, the government has created more stringent systems for detecting and dealing with corruption. The government has rigorously enforced the laws, however, there are concerns about selective enforcement and political motivations guiding the actions.

China’s targeted poverty alleviation strategy has been largely successful thus far. However, it remains to be seen how China will be able to create a sustainable long-term approach to uplifting its citizens. It is necessary to, alongside strategies to enhance economic empowerment, implement measures to establish democratic institutions. The poverty reduction strategies in China are comprehensive and if implemented effectively will allow for the growth of the economy as well as the increase in living standard.

– Isha Kakar
Photo: Flickr

Rural Poverty in China

China is lifting thousands of farmers out of poverty with a new land reform policy. Farmers can now rent out their land to private companies, provided that it is still used for agriculture. This is the first time in more than 60 years that the Communist Party has enacted land reforms, effectively decreasing rural poverty in China.

In 2012, Sihong, a Chinese county of about one million people, implemented a pilot project to test the results of the new land reform policy. Then in November 2016, Beijing approved the enactment of the policy in the rest of the country.

Before the application of this policy, collective farming was one of the Communist Party’s main political devices. The land belonged to the state, and individual farmers would contract to use it without ever owning it. Now farmers can rent out their land-use rights, and sometimes they can even use the rights as collateral for loans. However, they still are prohibited from leasing the land rights to property developers and industrial enterprises, even though these would likely be more lucrative.

One national goal of this reform was to increase the country’s food production through control by large commercial agriculture companies. Another important goal was to limit Chinese reliance on imports, which more than tripled in the past ten years, reaching $110.6 billion last year.

This reform allows more farmers to participate in the economy as consumers. So far, almost 30 percent of China’s 230 million rural households have rented out their land through various pilot programs. Farmers represent 300 to 400 million people with more purchasing power who could significantly bolster the economy.

Furthermore, Chinese leaders are hopeful that this change may generate business investments in agriculture, a goal they have been pursuing for years. They hope to convince Chinese investors to redirect their funds away from real estate or investments abroad and back into Chinese agriculture.

These reforms also have an important social consequence. Namely, they are decreasing rural poverty in China.

China is the fourth largest country in the world and has over 1.3 billion people. In the past twenty years, China has experienced unparalleled economic growth, resulting in a significant decrease in poverty. However, not all groups benefited from this development.

A huge disparity exists between urban and rural incomes. The average urban household’s income per capita was ¥29,831, which is the equivalent of $4,500 per year. Meanwhile, rural households have a per capita income of only ¥9,892, or $4 a day.

Around 50 to 55 percent of the Chinese population lives in rural areas, and in these areas about two-thirds of people are farmers. Some of the factors keeping rural farmers in poverty include increasingly frequent natural calamities, poor community infrastructures and services, limited access to financial services and markets, outdated farming techniques and depleted natural resources.

The land policy reform has proven itself to be an effective solution to the problem of rural poverty in China. For example, one farmer in the Shiji township went from earning ¥10,000 a year growing rice to pocketing ¥8,000 just from renting his land and making an additional ¥60,000 annually in his store.

This policy aligns with President Xi Jinping’s pledge to reduce poverty. By decreasing poverty in rural China, the land policy reform demonstrates the positive social and economic impact that opening new markets in poor regions can have.

Lauren McBride

Photo: Flickr