China’s poverty alleviation miracle

The growth of China from a poor country to a developing one and now, a world leader in economic growth is a modern-age miracle. If future historians will glory one feat that this era achieved, it will be China’s gargantuan poverty alleviation programme which saw 800 million people lifted out of poverty. China’s poverty alleviation success has dramatically reduced global poverty figures by 70 percent. China is the world’s most populated country with a population well over 1.4 billion, with a majority of that population concentrated in the coastal cities and villages in eastern China with western China being sparsely inhabited. China got her independence in 1949 under the leadership of Mao Zedong, a communist leader who envisioned China to be a communist nation. The initial policies of Chairman Mao were focused on agrarian reforms to provide Chinese people with the land to harvest and live off. Inspired by Stalin’s industrialisation, Mao initiated simultaneous agricultural and industrial development, which unlike the Soviet Union, did not complement each other. Mao’s Great Leap Forward resulted in failure, pushing millions into poverty. The open market policies of Deng Xiaoping catapulted China toward development. He steered the country toward open market policies which assisted in setting up China as an industrial base. China showed miraculous growth, which made her the world’s factory after it joined the World Trade Organisation in 2001. Now, under the leadership of President Xi Jinping, China is close to becoming a developed country which now provides assistance to other countries to develop.
In 1990, more than two-thirds of China was living under the poverty line and by 2016, only 0.5 percent of its population was living in poverty. The struggle against poverty spread over decades, which not only shows the Chinese government’s commitment to her citizens, but also stability in their economic growth. According to Yokon Huang, Former Director for China, World Bank, sustained economic growth in China as well as infrastructure development to connect remote areas with economic hubs was pivotal in realising the Chinese poverty alleviation miracle. The international poverty line is set by the World Bank which stands at $1.90 dollars a day at 2011 international prices. China set her own poverty line to steer the national anti-poverty drive. The annual national poverty line stands at RMB 3305 ($526). The numbers are contested, but from 1990 to 2019, the number of poor people in China decreased from 750 million to 16.5 million. Poverty eradication was accelerated under President Xi Jinping when he introduced Targeted Poverty Alleviation (TAP) in 2014. TAP is an all-encompassing initiative which works in five different but overlapping areas: industrial development, social security, education, eco-compensation, and re-location. The CPC remained focused and worked on these areas simultaneously, which resulted in the betterment in people’s life, leading to the graduation of the poor out of the poverty threshold.
China’s industrial development has mirrored the western world. With plentiful cheap labour and high volumes of foreign direct investment flowing into China, China became the world’s factory. Industrial development happened because of technology transfer that happened when companies from other parts of the world relocated to China to reduce costs. As part of TAP, the CPC focused on building industries to engage remote communities in the market economy. Infrastructure development was crucial to connecting remote areas with industries to assist communities and localities change their occupation. The road and high-speed railways made it easier for inputs and labour to travel more efficiently across different provinces and districts. Along with physical connectivity, China heavily invested in digital connectivity of producers and buyers. The emergence of Taobao villages, (a village with at least 50 households operating their own shops on Taobao—an online platform) helped communities earn money through virtual sales. This became critical during the pandemic as most of China was shut down because of the increasing corona cases.
Communities were put on social security to meet their ends. The government supported families to access different services at low costs, and special focus was placed on education, as it is the key to end generational poverty. Families below the poverty line were given assistance to send their children to school and university. Eco-compensation is another vital component which assists the income of communities living in ecologically fragile areas. Different ecosystem payment services programmes were focused and communities were paid direct cash to grow forests on marginal agricultural lands and work as forest officers to take care of nature. The most debated strategy has been the complete relocation of villages to other places. For example, a whole village was moved in Huishui County in Guizhou province in southwest China. The programme intends to relocate 10 million people with an estimated cost of $87 billion. Relocation not only requires funds, but also changes of ideology and identity to adapt to a new place. Once people are moved, the government provides subsidised housing along with pre-job training to assist people find city/town jobs.