Seminar on Poverty Alleviation for Uganda High Level Officials

The Poverty Reduction in China:

-Policy, Achievements and Experiences for
Partner Countries

Prof. Yonggong Liu

College of Humanities and Development,
China Agricultural University
30 July 2021
 Contents

1. Poverty and Development Disparity in China

2. China’s Poverty Alleviation Policy and Strategy
3. China’s Achievements in Poverty Alleviation
4. Experiences and lessons for other Developing
Countries
5. Issues to be considered and discussed
1. Poverty and Regional Development
Disparity in China

 Benefited from the reform and globalization, China

has experienced a fast and consistent economic
growth in the past 40 years with an average annual
GDP growth at 9.0-10%;
 However the development disparities between urban
and rural regions, east and west regions are remain
significant.
The division of West and
East Regions
14 Poverty Regions (2016-2020)
 Gini Co-efficient in China

0.495

0.485

0.475

0.465

0.455

0.445
Lorenz Curve and Gini Co-efficient

Gini Co-efficient=
A/(A+B)
is a statistical index to measure the
inequity of social wealth
distribution among different
groups of population
Gini Index by country 2014
1. Poverty and Regional Development
Disparity in China

 Enlarged Gini Co-efficient from 2000 to 2013:

consistently above 0.47, exceeding the warning line
0.45;
 Starting Gini narrowing since 2014 due to the effort of
poverty reduction;
 Social conflicts and strength increased due to the
inequity of the social income distribution
1. Poverty and Regional Development
Disparity in China

 Regional Disparity of Per Capita GDP 2019:

 East Region(Beijing and Shanghai): more than 160,000
RMB per capita
 West Region(Gansu, Guizhou, Yunnan):
40,000 RMB per capita
 Regional Disparity: East : West=4 :1
 The disparity is still enlarging as the development
 Disparity: 2016 per capita income
Shanghai, Gansu and National Average
120000
Per Capita GDP
Per Capita Expendable Income
100000

80000

60000

40000

20000

0
Shanghai Gansu China
Large urban-rural income disparity
Urban-rural Per capita income disparity of Lingqiu
County, Shanxi Province

25000

20000

15000

Urban
Rural
10000

5000

0
County-Province-China Per Capita GDP
Disparity

50000

45000

40000

35000

30000
Lingqiu County
25000
China
Shanxi
20000

15000

10000

5000

0
2010 2011 2012 2013 2014
2. China’s poverty alleviation policies and
strategy

 The Overall Strategic Priority

 Since 1985, both the CPC Party and the Government
have given priority to narrowing the regional
development gap in the national development strategy;
 18th, 19th CPC National Congress of CPC launched the
national program to eliminate absolute poverty by 2020
 An integrated and multi-sectoral inclusive development
policy instrument has been developed and implemented
since 2010.
Pro-Rural Development Strategy
The hand of government
2. China’s poverty alleviation policies and
strategy

 Increased fiscal transfer to western provinces

 Share of central government fiscal transfer to West
region increased from 29% in 1999 to 39% in 2010-2020
 Fast increase of state fixed asset investment in west
China since 2000
State fixed asset investment by regions
(billion Yuan)

1400
1200
1000
800 East
600 Central
West
400
200
0
2000 2003 2007 2010 2016
Financial increase for poverty reduction
(2013-2020)
2. China’s poverty alleviation policies and
strategy

 National and Regional Strategic Programs

 West Development Strategy (WDS) since 1999
 Set up LGOP in 1985; “8.7 Fighting Poverty Program”;
“China’s Poverty Alleviation Strategy 2001-2010”; China’s
Poverty Alleviation Strategy 2011-2020”
 Revitalization of Industrial Bases in North-East
Provinces
The policy evolution of the poverty
alleviation in China

2015:
Accurate 2020
2000: Targeting Eradicated
National Poverty
the
Poverty Alleviation
1993: 8.7 absolute
Alleviation Strategy
National poverty in
Program for Strategic The 2020
Planning the whole
eliminating Goal
(2001-2010) country
absolute
1985: set up poverty
LGOP,
luanched
national
poverty
alleviation
Program
2. China’s poverty alleviation policies and
strategy

 Rural finance support

 Subsidized Poverty Loans for supporting enterprises and
business development of poor borrowers in poverty areas
 Micro-Credit Schemes for small individual borrowers
 Governmental grant for cooperatives and standard
production bases and parks
2. China’s poverty alleviation policies and
strategy

 Investment Programs in west region

 NDRC: Food for Work to improve the transportation
infrastructure
 Integrated Agricultural Development Program by
Ministry of Finance
 Land Reclamation Program by Ministry of Land
Resources
 National Infrastructure Investment Program, highway,
railway, airports, hydropower station,
2. China’s poverty alleviation policies and
strategy

 Inter-Regional cooperation and partnership in poverty

reduction
 Inter-Inclusive Economic Development Program along
Yangtze River
 Inter-Inclusive Economic Cooperation Program along Pearl
River
 Inter-Provincial Aid Program for fostering the social and
economic development in western regions (paring the
poor and rich provinces together for overall aids delivery)
2. China’s poverty alleviation policies and
strategy

 Farmers’ Training Program for promoting Income

increase and labor migration
 Agricultural and Livestock Technology Training
 Employable Skill Training for migrant workers
 Agricultural vocational training , i.e. Yulu Training
Program launched by Ministry of Agriculture(MOA)
 Women’s skill training launched by All China Women’s
Federation (ACWF)
 2. China’s Inclusive development
policies and strategy

 Subsidy and preferential policies

 Governmental subsidy for grain production
 Abolishing agricultural tax in 2006 for reducing the
financial burden of farmers
 Subsidy for procurement of farm machines
 Ecological compensation for subsidizing farmers in
central and western provinces
 2. China’s Inclusive Development
Policies and Initiatives

 Initiatives for promoting the income increase of poor

areas
 Bringing science and technologies to remote and poor areas
launched by Ministry of Science and Technology (MOST)
 Internet connection for rural people (Ministry of Industry and
Informatics (MOII)
 Rural E-Commerce for promoting the market of the agro-
products
 Promote the development of organic and green food
production
2. China’s poverty alleviation policies and
strategy

 Village Social Development implemented in the poverty

reduction program
 Improvement of infrastructures for the remote and geo-isolated
poor villages: village roads, irrigation and water supply facilities,
supply of electricity, etc.
 Improvement of social infrastructures: drink water supply, village
clinics, access of radio and TV transmission; improvement of housing
conditions, resettlement of very isolated villages, etc.
 Improvement of social services, village clinic and medical services,
village hygiene facilities,
 etc.
2. China’s poverty alleviation policies and
strategy

 Initiatives of Inclusion of Vulnerable Social Groups

 Rural Collaborative Medical Insurance covering all
farmers; Medical expenses reimbursement for
households affected by the acute diseases
 Rural pension system;
 National rural education promotion program to improve
the education service provision to the remote and
ethnic minority areas
2. China’s poverty alleviation policies and
strategy

 Subsidy students from poor households

 Full covering the living expenses for Five Guarantee
Households who lost the self-subsistence abilities
 Financial Subsidy to the lower income households
 Livelihood subsidy to the rural disabled peoples
 Ethnic minority development promotion
Major Approaches conducted from
2015 to 2020
Through industrial development/empolyment

Through Scientific and Technology extension

Through ecological compensation

Through education/skill training

Through medical services /insurance

Through culture development

Through resettlement

Special aid programs for children, women, ethnic

peoples
 Management Tools for ensuring the
quality of poverty reduction programs

The 5- C Management Mechanism:

 Accurate targeting, identification;
 Accurate planning, bottom-up planning and
integration;
 Accurate implementation and service delivery;
 Accurate monitoring and supervision during the
implementation;
 Accurate acceptance and final evaluation
3. China’s Achievements in Poverty
Alleviation

Three Major achievements and impacts:

 Increased income of farmers in western provinces
 Improved the overall livelihood and life quality of
poor people
 Social guarantee for the welfare of vulnerable social
groups
 3. China’s Achievements in
Poverty Alleviation
Achievements of China’s Rural Development 1980-
2020
Indicators 1980 2020 Improvement

Rural per capita 191 Yuan 17131Yuan Annual increase:

income 7.0%
Agricultural 320.55 million ton 650.0 million ton 320 million tons
Production/produc Increased 94%
tivity

Engel Coefficient 67.7% 30.2% 37.5%

 1980-2020 Net Income of Rural
Residents in China

18000 Per Capita Net Income (Yuan)

16000
14000
12000
10000
8000
6000
4000
2000
0
1980 1985 1990 1995 2000 2005 2010 2016 2017 2018 2019 2020
 3. China’s Achievements in Poverty
Alleviation
Major Achievements in poverty reduction
(1) Reduction of Poverty incidence: from 30% in 1978 to 0% in
2020
(2) Number reduction: ca. 250 million

Indicator 1978 2020 Improvement

Number of poor 250 million No absolute - 250 million
poverty
Poverty incident 31% 0% -31%

Human 0.407 0.758 0.351

Development 0.561(world 0.732 0.171
Index (HDI) average)
Decline of Poverty Population
2013-2020 ( x 10,000)
Poverty Population
12000

9899
10000

8249
8000
7017

6000 5575
4335
4000
3046

2000 1660
551
0
0
2012 2013 2014 2015 2016 2017 2018 2019 2020

Poverty Population
Per capita net income of poor
population (CNY)
14000
12588
12000 11567
10371
10000 9377
8452
8000 7653
6852
6079
6000

4000

2000

0
2013 2014 2015 2016 2017 2018 2019 2020
Adjustment of poverty lines for
covering more beneficiaries
 3. China’s Achievements in
Poverty Alleviation
Major achievements in poverty reduction:
 China greatly contributed to the achievements of UN
MDG (2015) and SDG (2030)
 China eliminated absolute poverty within 30 years.
 Resolved the subsistent problem of shortage of food
and cloths for poor people
 For more information on Chinese poverty reduction,
please read the Chinese poverty reduction white
paper: http://
language.chinadaily.com.cn/a/202104/06/WS606bffe7
a31024ad0bab3c43_1.html
 Achievements: Rural Public
Infrastructure Construction
projects unit Achievements Remarks

High way Km 149,600 Until 2019

Rural roads Km 4,200,000 Until 2020

Village roads Km 2,052,200 Until 2020

Small Reservoirs/checkdams Set 98,002 Until 2014

Land Irrigation Ha 63,467,000 Until 2013

Drinkable Water Supply Village 504,802 Until 2013

Rural Education Facilities School 260,000 Until 2019

Electricity supply Village 687,510 Until 2019

Rural Market Set 260,000 Until 2009

Rural Hospital/clinics Set 37,097/177,798 Until 2019

3. China’s Achievements in
Poverty Alleviation
3. China’s Achievements in
Poverty Alleviation
3. China’s Achievements in
Poverty Alleviation
3. China’s Achievements in
Poverty Alleviation
 Videos on the achievements

 https://
news.cgtn.com/news/2021-02-24/Live-Special-coverage-on-C
hina-s-poverty-eradication-Y7vSqI7fnG/index.html

 https://news.cgtn.com/news/2021-03-01/Poverty-eradication-
the-starting-point-of-a-new-life--
YgZ2NzEq4g/index.html
 https://
news.cgtn.com/news/3d3d514f35456a4e79457a6333566d54
/index.html
4. China’s Experiences and lessons

(1) The social and political stability as precondition

China’s experiences proven that: the social and
political stability is the precondition for the
development of the national and local economy, but
also the pre-condition for the inclusive development
and poverty reduction
4. China’s Experiences and lessons
(2) Government’s Key Roles in Inclusive Development and Poverty
Reduction
(+) Constant and Strong Financial Transfer
(+) Quick decision and effective implementation
(+) Combined with governmental policies, integrated different
governmental programs
(+) Effective administrative and political mobilizations for delivering
supports
(-) insufficient NGO and Civil Society Participation
(-) Insufficient Participation of Enterprises and Banking
(-) Line-Agency based implementation, lack of coordination and
cooperation among stakeholders, lower efficiency of resources
4. China’s Experiences and lessons

 Strategic Priority: Central government continuously

places rural development and poverty reduction as
investment priority in the national development
strategies
 Mainstreaming: Rural income generation and
Inclusive development as well as rural infrastructure
construction must be systematically mainstreamed in
the sector-and local development plans and
programmes
4. China’s Experiences and lessons

 Ensure the Budgetary and Investment Priority to

Poor Regions: Governmental investment power and
mainstreaming into the central and local
governmental fiscal investment budget. GDP growth
is the financial precondition;
4. China’s Experiences and lessons
4. China’s Experiences and lessons

 Effective governmental decision making mechanism

and institutional implementation mobilization power
ensured the quick implementation
 “Clean” and “good” governance
during the vertical fund allocation and channeling
from central to local levels
 Disciplinary inspection on the allocation and
channeling of poverty funds
Inspection of the fund channeling

Discipline inspection officials talks with a villager about the amount of subsidies he received at Dongyue Village
in Chongqing Municipality, southwest China, March 27, 2020. /CFP
4. China’s Experiences and lessons

 Implementation capacity
Technical, engineering and management capacity in
project designing, implementation, quality
supervision and acceptance evaluation
4. China’s Experiences and lessons

(3) Income increase vs Resource and Ecological

Sustainability
 Priority given too much to income increase; sector
development;
 Overuse of natural resources, caused land and
vegetation degradation, soil and water erosion,
grassland degradation, desertification, water
pollution, etc;
4. China’s Experiences and lessons

(4) Importance of participation and ownership of

beneficiaries
 Farmer’s engagement in the planning
 Participation in the implementation
 Participation in the maintenance of the
infrastructures
 Building ownership and capacity for long term
development and collective actions
5. Issues to be reconsidered by the
partner countries

 How the urban development enlarged the disparity between

urban and rural?
 How to include rural and rural poor in the urban and
economic development?
 Who should do what to ensure the engagement and benefit
of the rural poor and other vulnerable groups?
 Roles of government, business, NGOs, development workers,
donors? Multi-stakeholders’ involvement and consultation?
 Challenges and constraints remained and to be removed?
How to achieve inclusive development?

 Pro-poor Governance, institutions for inclusive development

 Identification of poor, planning program and implementing the
initiatives
 Governmental and professional teams for facilitating the
inclusive development
 Financial transfer, financing the inclusive development
 Mobilization of participation and contribution of public and non-
governmental organizations
 Monitoring the outcomes and impacts of inclusive development
5. Issues to be reconsidered by partner
countries

 Inclusive development doesn’t happen automatically, we

need to agree on the approaches, strategies, roles and
responsibilities and take joint actions!
 Suggestions for Cooperation between China and your
countries?
 Opportunities and Platform: Belt and Road Initiatives;
China-Africa Cooperation Platform; Silk Road
Development Funds, etc.?
 How to establish the partnership with Chines Ministries?
Thank you for your attention
and active participation!

Contact: Liuyg@cau.edu.cn