China India Dialogue

After 37 years of efforts since its implementation of the reform and opening-up policies, China has lifted more than 700 million of its rural population out of poverty. China is also the first country to complete the objective on poverty reduction in the United Nations (UN) Millennium Development Goals.

Facing the future, China set the Two Centennial Goals, of which the first one is to accomplish the task of building a moderately prosperous society in all aspects and double its 2010 GDP and per capita income of residents in both rural and urban areas by 2020. The goal of completing the building of a moderately prosperous society in all respects will not be fulfilled unless poverty-stricken areas become well-off and the impoverished shake off poverty. The government has attached great importance to lifting all its impoverished population out of poverty within the 13th Five-Year Plan period (2016-2020).

Objectives and Challenges

China’s objectives are that by 2020, adequate food and clothing, compulsory education, basic medical care and housing will be available to the poor; per capita net income growth rate of poor peasants will be higher than the national average; and, leading indicators of basic public services available for the poor will be close to the national average. Moreover, all rural impoverished population will be lifted above the poverty line, and 832 state-class poverty-stricken counties freed of poverty, thus eliminating overall regional poverty. To achieve the objective, however, China is facing many challenges.

First, time is of the essence to complete the tough task. By the end of 2015, China still had 14 contiguous extremely poor regions, 832 poverty-stricken counties, 129,000 poverty-stricken villages, and more than 60 million rural residents living under the poverty line. To achieve the 2020 objective, the country needs to annually lift more than 10 million people out of poverty in the following five years, which is an arduous task. Over the past decades, those areas and people with better conditions to shake off poverty have been lifted out of poverty. The rest who remain stuck in poverty usually lack capacity of self-development. It is more costly and difficult to lift those people out of poverty.

Second, reasons behind poverty are complicated, and it is hard to end poverty. Due to historical, natural and social factors, it is hard to help China’s current poverty-stricken areas and population out of poverty. Presently, the majority of impoverished people live in 14 contiguous extremely poor regions with harsh living conditions, fragile ecological environments, poor infrastructure, and underdeveloped public services. A large proportion of those people are impoverished due to illness, educational costs, and physical disability. It is common for those who formerly obtained adequate food and clothing to fall into poverty again because of natural disasters and diseases.

Third, the “new normal” of the Chinese economy hinders impoverished people from getting employed and increasing their incomes. After more than three decades of rapid growth, China’s economy has entered a “new normal” period. The nation faces new challenges in stabilizing economic growth, transforming growth modes, adjusting economic structure, and preventing risks. Against a backdrop of the continuing economic downturn, it is difficult for impoverished people to find jobs and increase incomes. Some rural residents fall into poverty once again after losing their jobs.

Finally, poverty reduction mechanisms and policies need to be improved. Various government departments are entitled to formulate policies related to poverty reduction, but they lack coordination and have not formed a joint force to fight poverty. Financial policies are incompatible and cannot meet the demands of precision poverty reduction. Moreover, poverty relief mechanisms need to be improved, and there are no effective, reliable social poverty alleviation platforms.

To fulfill the 2020 objective in poverty reduction, the government has formulated policies to promote precision poverty alleviation by strengthening leadership and coordination.

First, clarify responsibilities and strengthen leadership.

Second, coordinate all sectors to form a joint force.

Third, formulate poverty reduction plans.

Finally, implement precision poverty reduction for different categories of poverty-stricken areas and households.

Strengthening International Cooperation

The Chinese government has attached great importance to international cooperation in poverty reduction. Through carrying out various kinds of international cooperation, China, on the one hand, has learned from the advanced ideas and experiences of foreign countries in poverty alleviation and constantly improved its own policies and practices in promoting domestic poverty relief. On the other hand, China cooperates with other developing countries to carry out inter-governmental dialogues, personnel training, pilot programs, and exchange of experiences in poverty alleviation, which not only helps concerned countries reduce poverty but also deepens people-to-people friendship. Over the past more than six decades, China has offered aid of nearly RMB 400 billion to 166 countries and international organizations. It has exempted seven times zero-interest loans owed by heavily-indebted poor countries and least developed countries. Moreover, China has provided medical assistance to 69 countries in Asia, Africa, Latin America, the Caribbean and Oceania and offered help to more than 120 developing countries in fulfilling the Millennium Development Goals.

In recent years, the Chinese government has taken significant measures to further promote international cooperation in poverty reduction and development. In 2014, China and the African Union co-issued the Outline on Strengthening Poverty Reduction Cooperation Between China and the African Union; and, China and Africa reached a consensus on promoting poverty reduction, improving infrastructure construction, enhancing cooperation in vocational and technical education and training of poverty reduction specialists, and strengthening the demonstration of agricultural technologies. In 2015, the China-Africa Plan on Poverty Reduction and People’s Welfare was promulgated, according to which China would launch 200 “Happy Life” projects and specialized poverty relief programs focusing on women and children and cancel debts in the form of bilateral governmental zero-interest loans borrowed by least developed African countries that matured at the end of 2015. In 2014, China put forward the East Asia Cooperation Initiative on Poverty Reduction, according to which the nation would offer RMB 100 million to promote rural poverty reduction projects in East Asia and establish poverty relief pilot sites in the region, pushing international cooperation in poverty reduction to a new level.

At the 2015 UN summits, China put forward a series of measures aiming to help developing countries promote economic development and improve people’s livelihood. For example, China announced a US$2 billion fund to support South-South cooperation and help developing countries fulfill the Post-2015 Development Agenda. China would also continue increasing its investment in the least developed countries to US$ 12 billion by 2030. China also announced waiver of interest-free government loans given to the least developed countries, landlocked developing countries and small-island developing states that matured at the end of 2015. In the next five years, China will offer aid to developing countries by launching the “Six 100s” program, including 100 poverty reduction projects and 100 schools and vocational training centers, providing 120,000 opportunities and 150,000 scholarships for citizens of other developing countries to receive training and education in China, and helping train 500,000 professional technicians for the rest of the developing world. China will also set up an Academy of South-South Cooperation and Development.

As the world’s two largest developing countries, China and India share many commonalities in poverty reduction. According to the World Bank’s US$1.9/day poverty measure, India still had 230 million living below the poverty line by 2012, thus facing tremendous challenges in poverty reduction and development. The next five to 15 years are vital for the development of China and India. China is willing to further exchange and cooperation with India in the realm of poverty reduction, so as to promote innovation of its poverty relief mechanisms and policies by introducing and learning from India’s successful experiences in poverty reduction. Meanwhile, China would like to share its own experiences in poverty reduction and development with India, especially in terms of precision poverty alleviation, thus facilitating the two countries and the world to fulfill the 2030 Agenda for Sustainable Development.

The author has served as director of the International Poverty Reduction Center in China since October 2012. Earlier, he worked with the Ministry of Agriculture in its departments: the Department of Rural Economic System and Management, the Department of Sectoral Policy and Law, the Department of International Cooperation, the Research Center for Rural Economy, and the General Office.

Published in the ISSUE 3 of CHINA-INDIA DIALOGUE

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