This article originally appeared in 澎湃新闻 (thepaper.cn). It recounts the main points that were made during a recent event in Beijing on the topic of poverty alleviation in which three prominent figures in this field, professors Li Shi and Li Xiaoyun and CASS researcher Xun Lili, exchanged their views. Below is CDB’s translation.
According to the poverty relief goals set by the central government, by 2020 all of China’s presently impoverished people will have escaped poverty, and we shall enter a poverty-free era.
On the afternoon of July 8th, ‘Cultural Review’ (文化纵横) and Narada Insights (南都观察) co-hosted a salon in Beijing with the theme “Poverty is heading towards its conclusion – how should we respond to the era of ‘new poverty’?”, at which Professor Li Shi (李实), the executive director of the China Institute for Income Distribution at Beijing Normal University, Professor Li Xiaoyun (李小云) of the College of Humanities and Development Studies of China Agricultural University, and Xun Lili (荀丽丽), associate research fellow in the Sociology Research Institute of the Chinese Academy of Social Sciences, engaged in an in-depth discussion on the topic of poverty relief and ‘new poverty’.
China’s achievements in poverty relief are remarkable, but poverty remains a serious problem
According to Li Shi, China’s achievements in poverty relief over the last 30 years are remarkable, but poverty remains a serious problem. China’s rural poverty relief standards are based solely on income, and the standards set have for a long time been low, leading to an underestimation of both the scale of rural poverty and the proportion of the rural population that is impoverished.
Various ways of defining poverty exist, one of which is setting an absolute standard. In this case, a standard is set in terms of income, consumption, or basic living conditions, such as the often mentioned annual per capita income of 2300 RMB for rural areas. Another way is to set a relative standard, which is determined relative to a relevant factor (such as income) for the entire population, for example 50% of average per capita income. Both of these are fixed poverty standards which do not take into account specific circumstances, such as how much money a particular family actually requires, and whether or not a family has young or old dependents. Such factors mean that even if per capita income is identical, basic needs may be widely divergent.
The Chinese state, however, has always used absolute poverty standards. At the beginning of the Reform and Opening Up, the line was set at an annual per capita rural income of 100 RMB, which at that time was very high, as per capita rural income in 1978 was only about 130 RMB. In 2008, the rural absolute poverty standard was 895 RMB. Between 1978 and 2008 the figure was merely adjusted in line with the price index, and did not undergo any change in substance. Compared with the World Bank’s one, this poverty line is very low: the World Bank’s standard in 1978 was one US dollar a day, equivalent to a per capita annual income of 876 RMB. Therefore, although China has achieved enormous results in poverty reduction, it has also received much international criticism, as its poverty level has been greatly underestimated. For this reason, in 2008 a ‘low income line’ was introduced in addition to the absolute poverty line, and in 2010 a new poverty line of 2300 RMB was introduced. This new line is about 70% higher than the earlier ‘low income line”, and rural poverty measured by this new standard is 18%, as opposed to 3% as measured by the earlier poverty standard. Therefore, eliminating poverty by 2020 remains a formidable task.
From the perspective of relative standards, the increase in the average income of Chinese residents far exceeds the results of the government’s efforts to relieve poverty, which is to say, income inequality has been continually increasing. In recent years, the rate of relative poverty has been increasing rather than decreasing. This provides a basic foundation to look at the problem of poverty after 2020.
Poverty rates and achievements in poverty reduction are therefore closely connected with the standards by which poverty is defined – the higher the poverty standard, the more difficult the task of poverty reduction. In addition, from the perspective of efficiency in poverty reduction, although in recent years the government has invested a lot in the western part of the country, the effects of poverty reduction efforts are clearly greater in the east. This isn’t to say that the government has done a bad job in poverty relief, but to point out that the characteristics of the problem are different in different parts of the country. Moreover, the poverty rate varies considerably between different groups of people: it is 14% among ethnic minorities, almost 10% among children, and around 13% among the disabled, in each case noticeably higher than the national average rate of around 8%.
Once we enter the era of targeted poverty relief, however, identifying the overall number of impoverished people becomes less important than actually finding them. In the past we adopted a policy of regional poverty relief, including measures like designating impoverished counties, because at the time poverty tended to be geographically concentrated. Poverty has become increasingly dispersed, however, raising the question of what kind of targeted measures can be taken to assist these people to genuinely escape poverty. Provinces and cities throughout the country have been setting up a system of minimum subsidies (低保制度), with the result that by the end of 2015 the number of rural residents receiving such support reached 49 million. However, this number contains a lot of people who should not be receiving a subsidy, while excluding many who should. Therefore, the key to reducing poverty in a targeted way is to accurately identify the impoverished population, and in practice the errors in this process remain very large.
Will the problem of poverty reach its conclusion in 2020? First of all, we face the question of how to define poverty, which depends in turn on what poverty standard we use. The understanding of poverty varies with the level of economic development, meaning that conditions that we can tolerate at one point may become intolerable after a certain number of years. Based on the current poverty standards, it should be possible to eliminate poverty by 2020. If, however, we adopt multi-dimensional standards, or raise the current standards, this will become less likely.
The adoption of relative poverty standards is rather unlikely, as relative poverty is the direct consequence of income inequality – this is also the case in Europe, where relative poverty rates are about 13%. Relative poverty is something society can never eliminate, and the only possible response is to think of ways to help the relatively impoverished population, such as various kinds of preferential policies and protective measures, thereby preventing their economic situation from continually worsening, and allowing them to keep up with the rate of development of society.
Eliminating absolute poverty still requires good institutional design, the accurate targeting of the impoverished population, and the adoption of different measures to respond to different kinds of poverty.
The core of poverty alleviation is poverty-stricken areas and groups
In 2015 Li Xiaoyun registered a grassroots public welfare organization, the “Xiaoyun Poverty Alleviation Center”, in Mengla County, Yunnan Province, by a riverside village of the Yao minority in Xishuangbanna, as an experimental base for implementing a comprehensive governance plan for the impoverished. The riverside village is a typical impoverished village, although it enjoys great natural advantages and scenic landscapes, and it has the potential to develop into a high quality economy. Taking this situation into account, the “Xiaoyun Poverty Alleviation” collected government and public welfare funds, launched crowdfunding and collected donations in order to raise funds for every Yao family to have a new house. Every new house would be built in the “embedded” stilt house style, but would also have the ability to be a high-quality business guesthouse. At the same time a sale of “rainforest eggs” was launched to help villagers make money directly.
These efforts led the villagers down their own path towards poverty alleviation. In Li Xiaoyun’s opinion, the greatest challenge facing current poverty alleviation is the “extreme poverty of regions and groups”, and not “individual extreme poverty.” The problem of individuals is modern society’s occasional “sickness”, which is very easy to solve. The problem of impoverished regions and groups, on the other hand, means there is a greater distance between individuals’ overall social and cultural norms and the modern ethics our society has adopted, and the poor cannot grasp basic market principles. Future poverty alleviation should be more precise in addressing impoverished regions and groups.
Li Xiaoyun proposes three core poverty alleviation strategies. The first is to interrupt the inter-generational transfer of poverty between parents and their children. The specific measures are to advance children’s education and nutrition as they grow up, to help them gradually develop and adapt to modern ethics. After they’ve grown up they will be able to change the appearance of rural areas and become a vessel for development. Compared with the current large-scale development and educational projects, this will better help solve the fundamental problems of poverty-stricken regions and groups. The second strategy is to strengthen basic infrastructure construction. In Li Xiaoyun’s opinion, the lack of basic infrastructure not only obstructs the ability of impoverished areas to get rich but also in turn consumes the residents’ income.
Taking the example of the riverside village where Xiaoyun registered his organization, it used to be eight kilometers on a dirt road to the nearest town. Once the entire road was paved, a motorcycle could save 500 or 600 yuan on gas in a year, not including the avoidance of personal injuries caused by the poor road conditions. Basic infrastructure construction can carry with it returns that surpass the cost of the infrastructure itself. The third strategy is the one Li Xiaoyun is currently employing, improving residents’ income. From his point of view, minor income growth won’t help to transform the attitudes of poverty-stricken areas and groups, and there must be a substantial income increase in order to balance the gap between impoverished areas and modern society.
Addressing the “locality” blind spot in the “Who should we support? How to support them? Who will help?” questions.
In Xun Lili’s opinion, the long-term existence of poverty is not an issue that needs debating. As a result of long-term uncertainty and risk, in the era of “new poverty” the basis for eradicating poverty should not simply be the issues of “low income” or of “raising incomes”, but instead it should be how to build a social support network. Each group’s adaptability and flexibility must be raised; this is an ecological, economic and social issue of sustainable development.
Xun Lili proposes the concept of poverty alleviation “in the locality”. This is to say that when working on poverty alleviation not only must we fully understand the characteristics of the local climate and landscape, but more attention should be paid to the way local people behave and the concept of public participation in the local context. This way the core questions in poverty alleviation —“Who to support? How to support them? Who will help?” — can overcome the “locality” blind-spot.
First of all, the issue of “who to support?” focuses on the problem of poverty alleviation. Poverty alleviation with top to bottom “targeted control” and “targeted distribution” determines that there is a systemic bias in the aims of poverty alleviation. Despite the government investing manpower and money on an unprecedented scale, resources for poverty alleviation remain limited. Looking at the poverty alleviation standards, we can see that the state’s logic and the rural logic do not match. The state’s logic requires that poverty be identified down to the individual, in a way that is clear and easy to control, for instance with the establishment of household information cards. The rural logic is not the same however, because in order to avoid conflict village cadres want to equalize benefits. They can normally choose the share of benefits for each group within the village, and very often groups with a lot of poor within them will be unable to receive a larger proportion of the resources marked for poverty alleviation, while groups with less poor among them will continue to receive their share of such resources. In the past, in poor areas with little income differentiation the villagers would receive the benefits in turn according to the year, but this is not consistent with the fixed poverty indicators of the household information card.
Secondly, when it comes to the issue of “how to help”, first of all the local government’s current practice of targeted poverty alleviation practice has the characteristics of a political movement. Poverty alleviation resources largely flow into model localities where political achievements are more in evidence, while other localities get less attention, as the effects of poverty alleviation in some remote villages are less easily noticeable. Secondly, in the poverty alleviation industry there is a clear issue concerning the abstractness of the poor. Local governments generally prefer large-scale projects with quick results, in a “capitalistic” approach to industrial design, with the poverty alleviation funds concentrated in the hands of cooperatives or leading companies. Poor households seem to benefit without lifting a finger, but in reality it is very difficult for them to effectively participate in the production or distribution phases, and improving their self-development abilities remains unachievable.
Once again, we find that when it comes to poverty alleviation in some remote areas, genuine innovation that could alleviate poverty faces challenges. For instance, in a village in Yunnan it was difficult to get the support of the local government to introduce technology for every family to independently raise wild mushrooms. The scattered nature of the raising is too hard to control, the scale isn’t large enough, and the political achievements don’t look good enough.
Thirdly, on the question of “who is helping”, we may have discovered a common problem: compared with the international community, the government-led model of poverty alleviation has always been our country’s special characteristic and advantage. But now that we are indeed in the midst of a tremendous targeted poverty alleviation, we discover that the government is the sole source of setbacks. The possibility and space for pluralistic social forces to participate in poverty governance is enormous. To go beyond the blind spots of the government’s poverty alleviation system, it is necessary to integrate the new body of greater social activism.
In addition, poverty management needs to be linked to an institutionalized design for rural revival. In future development, the villages should have their own autonomy and flexibility to adapt to risks, and then the anti-poverty framework will enter into the scope of villages’ public affairs governance and stimulate the rural communities’ endogenous drive . Researchers should also pay attention to the issue of how to reconstruct the capacity and mechanisms for rural areas to conduct public affairs.