China claims to have ended 'extreme poverty', but experts question if it set the bar too low

The Chinese Communist Party is presently celebrating the official 'end of extreme poverty' in the country with a massive propaganda campaign

FP Staff March 02, 2021 15:39:34 IST
China claims to have ended 'extreme poverty', but experts question if it set the bar too low

File image of Chinese President Xi Jinping. AP

The Chinese Communist Party is presently celebrating the official 'end of extreme poverty' in the country with a massive propaganda campaign. However, several experts have expressed skepticism about its claims.

China's claims are being challenged primarily on the grounds that it is still using standards set for poorer countries, though it has long graduated to middle-income status.

Also, it has been argued that the reason rural poverty was so widespread in the first place was because of Communist Party policies in the past.

Following is an overview of China's poverty reduction efforts and the questions that are being asked about the Communist Party's claims.

Poverty alleviation over the years

In 2015, Chinese premier Xi Jinping vowed to eradicate extreme poverty by 2020, a pillar of the Communist Party's goal to build a "moderately prosperous society" by the 100th anniversary of its founding.

Subsequently, in some areas, low-income ethnic minority communities were moved out of remote valleys into newly built towns. In others, officials went door to door signing up poor families for job training, grants to start businesses and other aid.

Nearly 10 million people moved into new homes and those of 27 million more have been renovated, according to Xi. He said the government has spent a total of 1.6 trillion yuan ($250 billion).

The average income per person among the “rural underprivileged” rose from 2,982 yuan ($356) in 2015 to 10,740 yuan ($1,665) last year, according to the official Xinhua News Agency.

In November 2020, the Chinese Communist Party announced, with little fanfare, that the country no longer had anyone in extreme poverty. That was down from an official estimate of almost 99 million living on annual incomes of less than 2,300 yuan ($355) per person a decade ago.

A full-scale propaganda campaign launched in February 2021 has filled state-controlled newspapers and airwaves with reports on the anti-poverty milestone and Xi's personal role in it.

They credit Xi with launching an initiative shortly after taking power in 2012 that enabled China to beat by a decade the 2030 target set by the World Bank for eliminating extreme poverty. A report by the party newspaper People’s Daily this week on the “historic leap” refers to Xi by his full name and title as party leader 121 times.

Global experts also have praised China for its poverty alleviation efforts. A report by Agence France-Presse has quoted Martin Raiser, the World Bank's country director for China, as saying, "Over the past 40 years, China's economic growth has resulted in more than 800 million Chinese escaping extreme poverty... This is an extraordinary achievement."

World Bank figures lend weight to this assessment. In 1990, its figures showed that there were more than 750 million people in China living below the international poverty line — about two-thirds of the population. By 2016 — the most recent year for which World Bank figures are available — it had fallen to 7.2 million people (0.5% of the population), as noted by BBC.

But the reality on the ground is patchier, with experts warning that rising incomes have made China's poverty line outdated.

China's poverty line

China’s official definition of extreme poverty is an income per person of 11 yuan ($1.70) per day, as noted by The Associated Press. That is lower than the World Bank’s standard of $1.90, but the National Bureau of Statistics says that due to differences in rural living costs, the Chinese standard is slightly higher.

But China is now an upper-middle-income country, for which the World Bank suggests a benchmark that doubles the current threshold.

"The current low, unidimensional, rural poverty line no longer reflects what it means to be poor in China's rapidly evolving society," Terry Sicular of the University of Western Ontario has been quoted by AFP as saying.

In a report in January for the Brookings Institution, former World Bank expert Indermit Gill argued China is almost as well off as the United States was in 1960 when it became a high-income country. But Gill said that based on the U.S. income standard from that era, as many as 90% of China's people would be considered poor.

“If our numbers are correct, China is years — if not decades — behind schedule,” Gill wrote.

Gill's article notes, "The accolades for the Chinese government were surely deserved in 2000 when China transitioned from low-income to lower-middle-income. The Communist Party might even have deserved praise a decade later when China became an upper-middle-income economy; reducing poverty headcounts gets harder as poverty incidence falls. But in 2021, as China approaches high income, measuring progress using the official poverty lines of the world’s poorest countries as a benchmark may be the very definition of underachievement."

More work is also needed to ensure the mass move up the economic chain is sustained.

Poverty alleviation official Ou Qingping warned in December that some people still reliant on aid had "insufficient" means to grow wealthier.

"Once alleviation policies are suspended, they are likely to return to poverty," he said.

Setbacks like illness and unemployment — or pandemics — can also dunk households straight back into hardship.

Then there is also the question of the extent to which the government itself can claim the credit. An article in BBC quotes David Rennie of the Economist as saying, "Chinese people, by working extremely hard, lifted themselves out of poverty - in part because some of the stupidest economic policies ever created, by Chairman Mao, were abandoned in favour of versions of capitalism."

Mao Zedong's disastrous 'Great Leap Forward', which began in 1958, forced farmers into communes, leading to mass starvation in the countryside.

Nevertheless, Chinese propaganda outlets are seeking to respond to international criticism. An op-ed on 1 March in the Chinese Communist Party's mouthpiece Global Times responded to the BBC article by saying, "Such sophistry is absurd. It is just taking advantage of the World Bank's authenticity to help the West smear China. But according to the Chinese National Bureau of Statistics, if purchasing power parity and price difference between rural and urban areas in China are considered, the standard we use is much higher than that of the World Bank."

On the whole, while it is undeniable that China has taken large strides in poverty reduction, its propaganda around ending 'extreme poverty' leaves many questions unanswered.

With inputs from agencies

Updated Date:

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