China's Poverty Eradication - How did China reduce poverty ?

Updated: Nov 9, 2021

A country of 1.5 billion people announced this February to have removed absolute poverty, implying that almost 770 million Chinese were pulled out of extreme poverty.


Today’s China has emerged from an era of relative impotence to amass extraordinary international power. The region was once a collection of many states — Zhongguo — originating from the Yellow river valley, known as the Central Kingdom. At present, considered to be the most populous country, it has always commanded attention even at those periods in its history when it has been fragmented and disoriented.

This February, a country of 1.5 billion people announced that it has removed absolute poverty from the entire region. The fact that 770 million Chinese were pulled out from absolute poverty not only defines the exponential rise of the East Asian country, but as the Chinese Academy of Sciences and Technology rightly mentioned the present world’s technological powerhouse.

Illustration by Pratyush Thaker

Considering that the role of the welfare state is pivotal in facilitating fulfillment of basic needs of its citizens. The absence of these necessities such as — substantiate food, adequate drinking water, shelter, sanitation, education and health — plunges the low-income households into a state of crisis in the form of absolute poverty and homelessness.

So far, China has raised the per capita income of its people to $10,410 and increased their life expectancy to eighty years, according to the World Bank. The recorded figure of 853 million people that saw their lives improving in these four decades not only is a telling transformation of the “civilisation” that grieved for at least two hundred years about the unjust and mistreatment the outside world offered to them. As historian Benjamin Schwartz observed, “one of the most striking characteristics of Chinese civilization is what might be called the centrality and weight of the political order”.

How extreme poverty fell in China (Image credit: World Bank / BBC)

President Xi Jinping in his speeches repeatedly reiterated this year how his government achieved this “miraculous and arduous task” within eight years. Ever since he assumed office in 2012, at least 100 million Chinese reportedly have been lifted from poverty in eight-years. Using the numbers set by the World Bank, the current extreme poverty line is described at around $1.9 per day. The line of poverty in China has declined significantly from 1990 (when it stood 36 percent) to about just eight percent in 2018.

The focus on macroeconomic growth with emphasis on government funding on poverty alleviation helped lift the living standards for recent years. The decades of rapid expansion of poverty eradication in China is often linked with the country’s sustainable economic growth and its emphasis on innovation-driven economy. The journey that this country took from the past several generations has been intimately linked with its positive relationship to its neighbours. Today, the country is seen as an economic powerhouse that the rest of Asian countries orient itself towards.

Millions of its rural population have been relocated directly or indirectly to government-built apartments. Such accommodations were either built by the present Chinese Communist Party in the nearby cities or towns. Sometimes the new villages were also built over the old ones that were more suitable for economic development. Besides relocating people in numbers, the other reasons cited by the government remain; incentivizing compensation, providing social assistance and free education.

President Xi-led government claims to have spent around $246 billion to end poverty in these eight years. After surveying and campaigning mostly in the rural areas where there is a concentration of poor households. Majority of government spending has been on the "construction of new roads, houses, built other infrastructure and many times the direct cash to those households living below poverty line.

American skepticism

In response to that, scores of American economists contest the Chinese claim of eradicating absolute poverty, alleging that their focus is less on addressing the rural human capital development program. The country is placed on the 101 number in the 2013 Human Development Indicators, despite China having the second highest Gross Development Product (GDP), according to International Monetary Funds (IMF).

The criticism over China’s successful programs is said to remain distinct from having elevated poverty “for a large number of its people are still considered to be poor by the standards of the middle-income countries”. Economists Scott Rozelle and Natalie Hell in their book Invisible China argue that the root cause of rural poverty is the underdeveloped rural human capital.

The main concern for the American economists is the poor education in rural areas and basic healthcare that has long plagued China. At least 63 percent of students drop out before graduating from high school. As per the critics, the problem runs beyond schools, which includes health problems, lack of early childhood development and malnutrition. Even though China claims to have achieved its goal "the main question remains about the sustainability of government measures."


Story written by Guest Writer Umar Beigh

Edited by Aparna Chandrashekhar

Cover image illustration by Pratyush Thaker


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