Poverty Issue In China Essay Research Paper

Poverty Issue In China Essay, Research Paper

Ever since the economical reform in 1987, China.fs GDP per capita has grown at the speed of 8.2 percent a year, which benefited over 200 million people who had been living in poverty. The economical reforms had improved the economical condition of the country, but it had at the same time increased the economical gaps between the countries and heightening inequalities.

Poverty, in this paper, consists of two elements: income poverty and human poverty. Income poverty is defined as the lack of necessities for material well being, which can be measured by incidence of poverty. Human poverty means the denial of choices and opportunities for a tolerable life in non- income aspects. Human poverty includes many aspects, such as deprivation in years of life, health, knowledge and housing, the lack of participation and lack of personal security. In the paper, I would like to approach the issue through the income poverty.

The paper is divided into the following three sections: the first one provides a general picture of income poverty due to the uneven progress in rural-urban and regional disparity. The second section examines the impacts of economic growth on the process of reducing poverty, especially on agricultural growth and rural industrial growth. The third section focuses on the roles of government in terms of commitment and its policies on the issue, which are t main reasons for the temporary delay of reducing inequality. In the conclusion, the program that the government organized to improve the income equity will be introduced. By doing an analysis on the efficiency of the program, I would like to introduce a better development program if possible.

I. Overview of Poverty Reduction

The high-speed economical development in China has complied an impressive record in reducing human poverty over the last four decades. The most telling indicators of the improvement in the overall well-being of the Chinese population are the increase in life expectancy, the decline of mortality and the drop in adult illiteracy. However, the problem of income poverty continued to exist in rural areas. From the investigation that was carried out in 1978, according to the World Bank’s estimate, there were 260 million rural people living in income poverty, which meant that one-third of the rural population lived under the poverty line. 1 The shocking reality of the rural poverty situation created a sense of crisis and were finally listed the income disparities as one of the priority reform in 1978.

The reform was first believed to be a success. Between 1978 and 1985, tremendous progress was made in the rapid decline of income poverty. Estimation of total population living below the national poverty line declined from 260 million to 97 million, and the incidence of poverty declined from 33% to 9.2%. During the same period, the number of rural poor decreased to 96 million while the urban poor population decreased to less than 1 million.2

Nevertheless, despite the successful start, China’s progress in poverty reduction was not sustained during the 80s. The rural poor increased to 103 million in 1989 from 86 million in 1988, and the incidence of poverty rose to 12.3% from 10.4% which shows the signs that income poverty had increased. As the 90s arrive, although the income poverty reduction resumed, the result was not as optimistic as when the reform was first carried out. The number of poor people moving above the poverty line rose to 5 million a year, compared with only 2.5 million in the late 1980s and the early 1990s which shows an small improvment.3

Throughout the whole process of poverty reduction, there were still apparent inequities between rural and urban populations, between rich coastal areas and poor interior areas.

I.1 Rural-urban disparity

When the economical reform was first carried out, both rural and urban areas were able to benefit from its economical growth. As a result, income disparity between these two areas declined and the ratio of urban to rural income reduced from 2.4 to 1.7. However, after 1985, the ratio started to rise. In 1994, the income of urban residents was 2.6 times compare to the rural residents, and the actual income gap ratio of urban residence and rural residence was 4 to 1.4

Most of the rural poor reside in areas of severe environmental degradation, with no alternative. Not only they live on nations’ least productive lands; they are the victims of environmental destruction, which effect the agricultural possibility. Continued population growth has reduced the per capita natural resource base supporting agricultural production. With hazards from the start, it makes it even more difficult for the poor to escape from their condition.

I.2 Regional disparity

In the early 1980s, China’s regions all shared the rapid real economic growth. But since the mid-1980s, regional disparity has become wider than before 1980. A research indicates that the relative regional disparity coefficient declined from 32.8 to 28.7 between the late 1970s and the early 1980s, but increased from 28.8 in 1985 to 33.6 in 1992. 5

II.Impacts of Economic Growth on Poverty Reduction

II.1 Agricultural growth

The rapid growth of agriculture, is a direct determinant of the tremendous two-thirds reduction in poverty between 19