It shouldn’t be, but it is a controversial subject. The World Bank, WHO, US State Department and pretty much every government in the world has a different definition of what poverty means. In China, absolute poverty is defined as 11RMB a day, this is about $1.70. The World Bank disagrees and sets a higher number. In 2011 the USA considered people to be in poverty if their consumption was less than $21.70 a day. If that were the case, allowing for inflationary adjustment, almost all Chinese people outside of a few well-known cities would be in poverty. But living in China is an entirely different situation. Living in Urban China changes things greatly to living in Rural China too.
China doesn’t claim poverty eradication, it has a poverty alleviation program. The aim of this is to lift every Chinese person into a category they call: “moderately prosperous”. So the idea of putting a monetary value on poverty has no meaning. Instead of a monetary amount, we can consider a statement: Where a person’s resources are insufficient to meet their daily needs, and surely, everyone can agree that this is a good definition, a place where none of us would like to find ourselves. Since different governments, economists, journalists and academics all have different views on how to define poverty, China has taken a slightly unusual step of making a statement to: “Eliminate the “two worries” of hunger and clothing and fulfill the “three guarantees” of health care, housing, and education”. Based on these five categories, no one should need to worry about their basic life needs. In 2015 Xi Jin Ping gave a challenge to his government — go and find every family living in absolute poverty and lift them out of it — they did; and, with one or two minor exceptions which are being dealt with at a local level, have achieved the goal he gave them.
However, if we pick up a copy of almost any Western news, or take a look at the BBC, CNN or any one of a number of western media outlets, we see a few kind words followed immediately by criticisms or even examples of an individual with a problem. When 800 million people are lifted from absolute poverty, it’s a cause for celebration, not criticism. In a statement given to the New York Times, Martin Raiser, the China Director of the World Bank said: “We’re pretty sure China’s eradication of absolute poverty in rural areas has been successful — given the resources mobilized, we are less sure it is sustainable or cost effective,”.
Raiser’s statement fails to take into account the culture and societal nature of China and it’s Poverty alleviation program:
Sustainable? It will be sustainable because the government is committed to sustaining it, the Chinese people are on board with it, they are supportive of the government in how this is being handled. There is a strong feeling inside China of national pride, for many reasons, economic growth, technology leaps, pollution control measures, the burgeoning strength of the military, the ability to help other countries, the pandemic handling the BRI and particularly this poverty alleviation program. Stemming from a period of almost 100 years of national humiliation, the beginning of the end of which was within the lifetime of Chinese adults.
China is resurging to a point where it considers it historically belongs a point of world leadership, but not world dominance. So, If outsiders, even well-informed outsiders believe poverty alleviation will slip backwards, or won’t be sustained, then they are not as well-informed on China or China’s people as they think they are. Sustaining this poverty alleviation program well into and beyond 2035, is a given.
Cost Effective? Only an accountant or an economist would make such a statement. Or, to be more precise only an accountant or an economist from a capitalist background would make such a statement. What’s the human cost of lifting families out of poverty? Can that cost be measure by something as crass as money? Simply put; no, it can’t, or at least it shouldn’t be and it’s this element of Chinese National Identity, a characteristic of the Chinese people that is so grossly underestimated. As with sustainability, China has a commitment to the people in rural areas, it is making positive changes and, because of the stable nature of politics in China, the programs will continue. They aren’t subject to the whims of a different set of government leaders after an election.
These changes will become self-sustaining or, if insurmountable difficulties are encountered, they will be amended or revised to a different formula. They will not be abandoned due to cost because to do so would be to abandon the very people they are helping, reverting them back to a life they once knew but have left behind, and in doing so, the People’s Party will lose the support of those people they are helping, as well as millions elsewhere as they observe.
But that’s not why China’s government does this, they do it because it’s the right thing to do. To suggest it might not be sustained is to insult those involved, not only the Government who organise, direct and (mostly) fund it, but the Chinese people who live it!
Having covered the background, lets’ look at how it works at a human level. Poverty Alleviation is not just a simple case of throwing money at a problem but a real case by case program looking at sustainability and cost effectiveness and ensuring that this is exactly what they become.
My first awareness of poverty alleviation was reading reports in People’s Daily a few years ago. At the time it didn’t mean much, except that I was very well aware there was an imperative need for it. Having lived in China many years already and being involved in charity fundraising since 2005, I was very aware that there was a lot of poverty, even the city I lived in had examples despite being a modern, advanced city just a short distance from Macau and close to HK.
I’ve travelled a lot in China and been through some of the most poverty-stricken places here. In 2014, I cycled across China from the Southeast to the Northwest, through Ningxia and into Gansu and Xinjiang was an amazing experience in terms of the scenery, the mountains and deserts, but we also entered into a different kind of poverty. The desert is not a friendly place, eking out a living is difficult and so Gansu, Ningxia and Xinjiang, which all contain a lot of desert are very poor places. My only thoughts at that time were of an awareness there was poverty in the region, it was the first region I’d been to where I saw cave dwellers.
In 2019, I was travelling the same route, a different direction and this time with my wife — I remember telling her of the abject poverty I’d seen and what we were about to experience in Ningxia, the poor quality of the roads and the fact that many people still lived in adobe houses and the difficulties with finding decent hotels outside of the main cities. What we saw was a VERY different experience, the main roads were all well paved, the side roads to villages were all smooth concrete and in good repair, the hotels were better, I found the place where there had been people eking out an existence in poverty but the entire region was different. Instead of donkey carts, there were 3-wheeled-motorbikes, instead of huts there were high rises blocks, instead of an open market where I had seen a lamb slaughtered in front of me, there were supermarkets and car parks, there was even a cinema.
Setting aside my experiences on the road and the differences I saw in just 6-years, I’ve also been lucky enough to experience first-hand some of the benefits of poverty alleviation.
Just a few weeks ago, during the rainy season in Southern China, my wife and I went, by bike to the famous rice terraces at Longji in Northern Guangxi. This region has always, historically, been desperately poor. The only reason people would go to the backbreaking work of creating rice terraces on a mountain would be that there was no other option. Of course, this back-breaking and barely sustainable lifestyle has created one of the most beautiful man-made environments in the world. But all this was about to change. Industrialisation and urbanisation arrived in China. Farmers, finding they can make a good living by pursuing factory or construction jobs in the city left the rice fields and moved away. So, how to keep this magnificent historical spot looking good and keep the people on the fields without them barely managing a subsistence lifestyle became a huge challenge. It took a little planning but here’s what happened.
Inside the valley there is only one road in and one road out — a car park and ticket office has been built and all visitors need to stop and pay 80rmb, it isn’t much, about $12:00 or £9 Sterling. Once inside you need to show your ticket and everything else you want to see is free. And, if you want to stay overnight there are some fantastic places
The hotel we stayed in is a family home in a village called Jin Jiang, or Golden River. My wife has a friend who lives in the village so we got the entire story and answer to all our questions. The home is one of only 35 in the village, and when the poverty alleviation people from the government were looking for someone to open a hotel they entered into this agreement with families in the village: The owners provide the top floor of their home, the government gives training in hospitality and other assistance as needed, they also provided a builder. For 5 years the income from the hotel is shared in thirds between the government, the builder and the homeowner. The homeowner had to cover none of the construction, fit-out or furnishing costs and in just a few years will reap the rewards of having a wonderful bed and breakfast fully funded.
New houses in the region are constructed in the same style and the government helps with the funding — if you decide to build a standard home, with bricks and concrete, no one will stop you, but you won’t get any government support — the incentive is to keep the region as traditional as possible. My wife’s friend is in his 30s and has two children, he is building one of these homes entirely from wood in a traditional way, there are no nails, screws or glue used in the process.
Up to the tops of the mountains the rice fields are as beautiful as ever and are still being used to farm rice using traditional methods that have been in use for over 650 years. However, in the village now, there are cafés, shops, hotels, and all the usual things you will see in any well managed tourist location. The farmers though enjoy the benefits of a share of the income from the ticket fee tourists pay and are paid by the government for working the fields too. In working these fields, although, they are still farmers, they are now so much more; they are proud custodians and curators of one of China’s finest tourist destinations who receive an income for their work as well as get to keep or sell the rice they grow.
More personal experiences my wife and I have encountered lead me to believe that the recent focus on poverty alleviation (it started officially in 2015) is just the beginning of an unstoppable and positive change in China.
In the USA, under recent stimulus packages, unemployed people receive government handouts of $300 a week but, because the salaries are so low, these people won’t take jobs as they become available. In order to earn $300, untrained and unskilled workers are forced into accepting minimum wage jobs paying $7:25 an hour with contracts that don’t guarantee any number of hours. Clearly, it’s not a smart method of helping people get back into the workforce and lift the economy if subsistence cash is more than employers pay.
Despite being the world’s largest economy, the United States has the fourth largest rate of poverty of all OECD members (https://worldpopulationreview.com/country-rankings/poverty-rate-by-country) Only south Africa, Costa Rica and Romania have higher rates of poverty. They could learn a lot from China’s Poverty Alleviations policies.
We already mentioned that China’s system is not a “throw money at the problem solution”. What we see is not one project, but thousands of targeted and bespoke initiatives which capitalise on local resources, both human and natural. We’re seeing a Party driven program, incorporating industry, local government, academics and grass-roots guidance. Often using local resources at a micro level, local economies are boosted and jobs are created.
The dovetailing of academia and industry into government plans, with telecommunications and infrastructure support are what makes these initiatives work.
Graduating high schoolers from rural environments are selected and trained in universities and vocational training establishments, to become part of this program, thus ensuring a future viability. University graduates are incentivised to work in rural areas. The smartest of China’s graduates are kickstarting their careers by working on rural schemes after graduation (after all, they have a very famous role model in Xi Jinping who did the same during the Cultural Revolution). Future leaders in government, industry and retail are being formed through projects that they help create and lead in rural and impoverished communities. Xinhua reports: “Many college graduates have resisted the temptation of much better pay and benefits in cities to go back and help their hometowns in rural areas” (http://www.xinhuanet.com/english/2021-04/06/c_139860414.htm)
Large companies such as Guangdong Pharmaceutical Holdings (a fortune 500 company) have invested heavily in poverty alleviations schemes. Instead of just sourcing the herbs and oils they need, from farming communities, they build processing plants so local farmers sell their products into these facilities which employ local people to process the materials needed for traditional medicine — thus bringing jobs and income into regions that were, until recently, purely agriculture and subsistence living.
SF Express, a large parcel delivery company, and others like it, are the hidden and often unknown factor of China’s poverty alleviation scheme. Almost every town in China, many villages and every city will have branches of SF Express. They are cheap, easy to use, they pick up and deliver, usually anywhere within China in 24 hours. Many people now derive their income from working for these kinds of organisations or using them in the delivery of fresh products direct from the farm to the consumer.
As an example, in Hami, Xinjiang, one evening after a dinner we decided to buy one of their world-famous melons from a street vendor. It cost a few RMB, he cut it, sliced it and served it to us by the side of the road. We chatted with him, he was a Uyghur farmer and very friendly. Within a few minutes, we’d struck a deal to have three melons shipped back to my wife’s family in Guangdong — 4,000 kilometres away. It was after 11pm but the melons arrived just after lunch 38 hours later, total cost less than 100rmb (about $15 or £11)
Another important consideration is infrastructure, the enviable telecommunications system China has built throughout the country, products can be advertised or promoted on social media by people using their mobile phone to create and share videos. Ordered online (using mobile phones and a WiFi network that is the envy of foreign visitors), packed and shipped the same day and cheaply delivered the next. What helps this work so well is that China now has sealed roads, WiFi, 4G and in some cases 5G in every village in the country.
Living in rural China has always been tough, there’s no denying that. However, rural citizens have many things they can now take for granted. Currently, plenty of food is available and cheap because, for the most part, it’s grown locally, it can be consumed, sold or traded. If you’re born in a village, you have a right of residence there, as you grow up and get married, land is allocated and you build a house commensurate with your financial and local resources. There’s no rent to pay because the community provides land, there are no property taxes or council rates to be paid either, consequently homelessness which does exist in China, is more a problem related to the gaps in an underdeveloped mental health system (which is constantly improving and gathering speed) rather than a symptom of poverty.
Education is free for at least 10 years but something that isn’t supported is the cost of books, uniforms and the other stationery items you need to complete your education. Until recently, my wife was supporting three children in a small town in Northern Guangdong.
Chinese New Year 2019, we visited the village where these three children lived and handed each of them a “hongbao” a red envelope containing money. This money was for them to purchase books, stationery and uniforms for school, the local community office took us to their houses and we saw how poorly they lived. One of them was the son of a tobacco farmer. He wasn’t always a tobacco farmer, but the land was recently found to be suitable for growing this crop and in order to change from his old, less profitable crops, he needed to invest in some different machinery but the cost of tobacco seeds is quite high. The machinery was provided by the local government, tobacco seeds came from central government, a department of which now buys his entire harvest and earns him higher profits than he used to earn. He can now set aside enough money each year to sustain, and more importantly, grow his own business.
Another of the recipients is also the daughter of a farmer, his land is hilly, rocky and yielded poor crops. A visiting graduate from a local agricultural university suggested changing from crops to breeding chickens — this was impossible for him as the initial investment would have been too much to start a chicken farm, so the local government made the investment for him and provided him with 200 chicks. The deal being that he would provide chickens to government office canteens at a good price once they were grown. He now has thousands of chickens, a thriving business providing chicken to local restaurants, selling online (something set up for him under the program) and, as we saw when we were there, passers-by who happen to drop in and pay cash for very fresh chicken.
His old home was found to be in a dangerous state so the local government also provided cash for him to start building a new one. He’s sharing the costs with his brother and the two families will live together, as they have done for generations, in different parts of the same building — his grandfather, in his 90s still lives with him. The important point is that neither he, nor his daughter longer needs help from inside, or outside the community.
As an individual, a foreigner living in China for many years, I realise I have a unique perspective, I’ve travelled widely by pedal power, I use the trains and planes when I need to go anywhere, but when I want to travel, I do so with my wife or my friends on bikes. This way, we have observed positive changes in many different regions and on a wide scale, in places as far away from central government as Xinjiang, Inner Mongolia and Ningxia, I’ve also seen local improvements on a provincial level in Guangdong and Guangxi and I’ve seen individual lives turned around at the micro level.
I can say, without a shadow of a doubt, there are many positive aspects of poverty alleviation. Are there any negative sides? Yes, I personally think there are some social changes that have been under-estimated, there are some minor failures in the system but mostly bought about by individual error or even incompetence but quickly rectified and resolved. I have heard of some accounts (in western media) of corruption but I am convinced, if they were true, they would be immediately and harshly dealt with.
Poverty alleviation is with us to stay — it is not only sustainable, it is imperative that is sustained, it is cost-effective because the short-term economic costs are offset by a long-term growth in local, regional and ultimately, the national economy.