China's 5 million poor people are getting a one-off cash handout to survive

China has 5 million people living in abject poverty. Amid economic slowdown in the country, their situation is dire enough that Xi’s government, which has long avoided “welfarism” has to dole out rare cash hand-outs.

China is set to issue a one-time cash handout to its poorest citizens, state media reported Wednesday (September 25). The cash distribution is expected to be completed by October 1, the anniversary of the founding of the People’s Republic of China.

The Ministry of Finance and Ministry of Civil Affairs will oversee the disbursement of the handouts, which will target individuals living in extreme poverty, orphans, and the homeless, Bloomberg reported citing state broadcaster CCTV.

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The exact amount of the handout has not been disclosed, but the goal is to provide urgent financial relief ahead of the National Day holiday.

The country has already allocated 154.7 billion yuan ($22 billion) this year for financial assistance to its most vulnerable groups, according to government figures. As of June, 4.74 million people were living in extreme poverty, according to the Ministry of Civil Affairs.

A rare policy decision

This direct cash intervention marks a shift for the government, which has typically avoided broad welfare measures in favor of targeted development programs. President Xi Jinping has long spoken against “welfarism” and has focused instead on policies aimed at poverty alleviation through economic growth and infrastructure development.

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The handout comes shortly after China’s top monetary and financial officials announced a series of measures, including rate cuts and easing policies, to counter a slowing economy.

Along with the cash aid, the government has also instructed local authorities to ensure that college graduates who remain unemployed two years after graduation receive certain social security benefits, in a bid to address the country’s growing unemployment issue, particularly among young people.

Boosting consumer activity

The National Day holiday is traditionally a period of high consumer activity and travel in China. However, with economic pressures mounting, economists have been calling for more robust measures to stimulate demand and boost consumer confidence.

Some experts, including Huang Yiping, a member of the People’s Bank of China’s monetary policy committee, have urged the government to adopt more aggressive fiscal policies, including cash handouts, to support consumer spending.