China’s Poverty Line

China’s Poverty Line
Mar 23, 2009 By Fred Dintenfass ,

China is certainly a place of extreme contrasts – in Beijing black Audi’s and Beemers stream through the streets next to ancient bicycle carts loaded with gargantuan sacks bulging oddly with plastic bottles. In the last 20 years the wealth of Chinese people has risen meteorically. In Beijing’s Xin Guang Tiandi shopping mall Gucci and Versace have only a wall separating their 5,000 yuan shirts and you can pick up a real Louis Vitton handbag for 10,000 some yuan just a dozen meters away.

At the same time in Beijing, families are sleeping and living in single rooms and people eke by on 20 kuai worth of carefully harvested plastic and cardboard a day. And these are the lucky ones making it in China’s cities. Before the Olympic construction boom faded into the smog and 20 million migrant workers lost their jobs in the contracting economy we heard a lot about those workers making a mere 500 kuai per month. According to the 2008 Chinese government poverty line, that one month salary – which for expats is just a Saturday night at a club - is 64 percent of the annual poverty threshold.

Though still well below the “dollar a day” standard for measuring poverty, China has been raising the poverty threshold, moves which increase the number of Chinese considered to be living in poverty and vastly increase the numbers of Chinese eligible for social welfare programs.

Photo: jiazi

In 1985, the government set the benchmark poverty line at 200 yuan (28 USD) per year. That’s right, per year. In America in 1985, the poverty threshold for a single adult was around 5,000 USD (it’s now double that). The newest initiative will raise the line to 1,300 yuan (185 USD) – an increase of more than 200 yuan over the previous mark. While it still falls short of the much touted – and now thought to be too low – dollar a day mark, according to the Chinese government the new threshold is the first to reach a dollar a day in terms of actual purchasing power. Under the new limit 80 to 90 million Chinese will be considered to be living in poverty, around double the previous figure, 75% of them concentrated in rural areas.

As China funnels trillions of yuan into the economy in attempt to stimulate the 8% GDP growth it’s aiming, against the odds, to achieve the government is increasingly focused on social welfare programs as a way of strengthening the economy.

China Development Research Foundation deputy general secretary Tang Min has been outspoken about the need to raise the benchmark, “The most important task of poverty alleviation is to find the target population, and the key to finding them is to identify and fix the poverty line.” At last year’s 17th National Congress of the Chinese Communist Party, Hu Jintao counseled the government to, “gradually raise the bar for poverty alleviation criteria.”

Photo: Rivard

Despite the growing number of Chinese considered by the government to be impoverished, the government has many reasons to be confident they can tackle the problem. No country has ever been as successful as China in reducing poverty. Chinese statistics say between reform and opening and 2004, abject poverty plummeted form 250 million to 26 million. During that time the percentage of the rural population living in poverty fell from 30.7 to 3.1 percent.




World Bank figures calculate the number of Chinese living below poverty line falling from 835 million in 1981 to 207 million by 2005 – more than the rest of the world combined. According to the World Bank, at the beginning of economic reform 60% of the population was living on a dollar a day – as of 2004 that percentage was just 10%.

However, despite the adage, not all boats rise on the same tide – as China has become wealthier and Mercedes sedans have replaced bicycles, it’s the cities that have risen above their rural neighbors. Education and healthcare are funded by local governments and as a result poor areas are unable to provide the same educational opportunities that wealthy cities can. Migration to the cities has further stripped rural municipalities of their best and brightest leaving the elderly to work the fields with their grandchildren strapped onto their backs.

Photo: art_es_anna

For most urban expats 1300 kuai is only part of one month’s rent – an amount we can easily spend in a week of taxis, foreign food and one night at a club. Living on a dollar a day seems ridiculous to us – and yet millions of Chinese living on half that a day think a dollar is laughably high.

Organizations such as Beijing’s Compassion for Migrant Children and the Rural Education Foundation are two organizations founded by expats seeking to help rural and migrant populations receive better educations in school and in the practical skills necessary to find employment.

Poverty is problem everywhere in the world – several African countries have more than half their populations living below poverty line; India’s impoverished are between a quarter and third of the total populace – and the economic crisis will only serve to complicate a difficult situation. The Chinese government is exhibiting a level of attention and confidence which will hopefully translate into the rural boats rising to sail alongside the urban ones. Although perhaps, given the recent water fight off Hainan, another metaphor would be more appropriate.


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i think it s very valuable information thanks to the writer i also recommend this to be published in chinese for expat style living ew generation nChinese as a kind of lesson !

Mar 25, 2009 00:40 Report Abuse