While the global economic crisis still threatens to trap tens of millions of people in extreme poverty, alleviation initiatives in China are gaining new momentum and increasing recognition from the international community. From lifting innumerable people out of poverty by satisfying basic needs of food, clothes and shelter during the past three decades, the Chinese Government's anti-poverty drive is now to focus more on helping rural poor to start small businesses and guaranteeing access to public services and social welfare.

China, with its huge resources and success in reducing poverty, should lead developing Asian countries in attaining Asia-Pacific Millennium Development Goals (MDGs), a senior official of the United Nations Development Program (UNDP) said on February 17.

"China is the champion of the MDGs," UNDP Regional Director for Asia and the Pacific Ajay Chhibber said following the launch of the report Achieving the Millennium Development Goals in an Era of Global Uncertainty, which was prepared by the UNDP, the Asian Development Bank and the UN Economic and Social Commission for Asia and the Pacific.

The joint report, released on February 17, warned the global economic crisis could trap an additional 21 million people in the Asia-Pacific region in extreme poverty, living on less than $1.25 a day. The report says China has been on track in attaining most of its MDG targets—including slashing the poverty rate from 60 percent to 16 percent from 1990 to 2005, reducing malnutrition, halting the spread of HIV and AIDS, and providing universal primary education. Now nearly a quarter of China's fiscal stimulus package is pro-MDG, including low income housing, improving rural living standards and health care.

More than that China, because of its substantial resources, can also help developing countries attain MDG targets. "China can play an important role (so that Asia) can achieve its MDG (by 2015). China has large (foreign exchange) reserves (and a) large (budget) for international cooperation programs," he told the Xinhua News Agency.

In China's rural areas, 40.07 million people or 4.2 percent of the total rural population, have an annual per-capita income lower than 1,196 yuan ($175) and are eligible for government anti-poverty subsidies and incentives, says the State Council Leading Group Office of Poverty Alleviation and Development. The Central Government allocated 19.73 billion yuan ($2.9 billion) for poverty reduction programs in 2009, up by 3 billion yuan ($441.4 million) compared to 2008, and local governments also injected a total of 9 billion yuan ($1.32 billion) into poverty reduction initiatives.

Decade of efforts

The year of 2010 will be a landmark year in China's poverty alleviation as the Central Government is drafting a new guideline for the next decade, China's second decennial plan.

A State Council meeting on February 10 said the Chinese Government during the past decade had made great efforts to lift rural poor out of poverty and had met its MDG to halve the number of people living on less than a U.S. dollar a day "ahead of schedule."

Other great strides taken by China are a noticeable improvement in the economic strength and infrastructure in impoverished regions, and the bringing under control of ecological degradation. The country has also made good progress in constructing a social security network, which has been extended to cover rural areas with the establishment of a basic living guarantee system, the new rural cooperative medical scheme and a pilot insurance plan for the aged.

China has been charged with an uphill task in poverty alleviation because of a large impoverished population, frequent threats of natural disasters and thorny problems restraining the development of poor areas.

Four major barriers to China's poverty alleviation work in current circumstances were outlined in a paper authored by Fan Xiaojian, Vice Director of the State Council Leading Group Office of Poverty Alleviation and Development, issued on February 2.

First, China has a huge population in absolute poverty.

Second, despite the fast growth of incomes in poverty-stricken areas, farmers in these areas are lagging further behind urban residents and farmers in other areas. The income gap between China's urban residents and rural residents expanded further to 12,022 yuan ($1,768) in 2009 from 11,020 yuan ($1,621) in 2008.

According to official statistics, the annual per-capita disposable income of urban households increased to 17,175 yuan ($2,526) in 2009, while the figure for rural households was 5,153 yuan ($757).

Third, infrastructure and public services have yet to improve in poverty-stricken areas. In remote areas, people still have difficulty in accessing public services such as roads, clean drinkable water, education and health care.
Fourth, areas with a concentrated ethnic population and border areas in China's western regions and mountainous areas in central regions have been plagued by chronic poverty. It is also difficult for disabled rural residents to escape from poverty.

"China's economic success is the key factor in reducing the country's poverty population during the past 30 years," said Professor Li Xiaoyun, head of College of Humanities and Development Studies of China Agricultural University. In an interview with the newspaper Southern Weekend in June 2009, he said increasing agricultural productivity had resulted in a rise in farmers' incomes, and the development of small and medium-sized enterprises had prompted the migration of rural labor forces to cities, whose salaries also increased income for families left behind in rural areas.

Li said although the rich in China are grabbing a bigger slice of the cake, the country's economic success still has great potential to further reduce poverty in most areas in China's central and western regions.

New approaches

The State Council Leading Group Office of Poverty Alleviation and Development revealed that one priority of China's poverty alleviation for 2010 is to carry out comprehensive development-oriented programs for the rural poor, including training programs for labor forces from low-income households, nurturing entrepreneurship in villages, encouraging households to move out of disaster-prone areas and expanding pilot programs that provide funds to poor villages. The office also promises to distribute more poverty-relief funding directly to poor households.

Priority will also be given to enhancing poverty monitoring by establishing a network to supervise the rural population whose income is lower than a quarter of farmers' per-capita net income. The monitoring results can then be used as a reference for improving the mechanism of poverty standard adjustment.

Fan's article also introduced new government programs to combine efforts to build social security networks, poverty-alleviation and household-based training and start-up assistance programs. A pilot program combining the distribution of basic living guarantees with poverty-reduction programs in rural areas, which were implemented on a trial basis in nearly 6,000 villages in 2009, will be expanded nationwide this year.

The pilot program innovates by dividing the low-income rural population into two groups: those capable of self-sustained development after receiving start-up money or training from the government, and those who have lost the capacity to work and should receive basic-living guarantees permanently.

A Xinhua story in February reported the implementation of the pilot program in Meiziyuan Village in south Hunan Province. The 35 poor families in the village became owners of vegetable greenhouses, fish ponds, cattle farms or lathe workshops after obtaining capital and training support from the local government.

"Whatever business we want to start up, the government will help us," said Zhang Haizhen, a 57-year-old resident of Meiziyuan and owner of several vegetable greenhouses. She said the government-subsidized greenhouses brought in around 5,000 yuan ($735) for her family in 2009, doubling the family's annual income.

During the past three decades, Li said, the Chinese Government had dedicated itself to developing the economy to provide people with sufficient food, the development-oriented poverty-reduction programs to increase people's income and building social security networks and meeting the poor population's needs, such as their access to basic infrastructure, health care and education. Transfer payments, money allotted from central coffers for local use, now account for a significant part of their income.

Li suggested limiting the system of granting poverty-relief subsidies and incentives to 592 key poverty counties. He said when the system was first implemented more than 20 years ago some counties were substantially more backward than others and had large poor populations. But many have developed rapidly over the past three decades and over half of the country's rural poor now live in other counties. "It is unfair to grant limited government subsidies to counties that are no longer underdeveloped."

Li also opposed applying a single income poverty line to the whole country as residents of different areas in China enjoyed social welfare of different levels. The use of guidelines related to the proportion of expenditures on food to total consumption to decide the poverty group, who spend more than 70 percent of their money on food, would be better.