The Decisive Role of Poverty Reduction in China’s 2020 Targets

The centrality of poverty reduction to China’s state policy was once more strongly emphasized by the Report on the Work of the Government to this year’s full session of the National People’s Congress, China’s top legislature. The novel coronavirus outbreak has evidently struck a heavy blow to the Chinese economy, and the pandemic’s indirect international consequences are creating the greatest global economic downturn since the Great Depression, which will weigh negatively on China throughout this year. For this latter reason, as is well known, China took the unusual step of not setting an economic growth target for 2020. But the commitment to eliminating poverty was emphatically retained within the government’s program.

China had already made immense progress on its route to eliminating absolute poverty before this year began and the pandemic struck. According to this year’s Report on the Work of the Government, China has reduced the rural poor population by 11.1 million, and greater efforts would be made to eliminate poverty in all remaining poor counties and villages. Official data shows China had more than 5.5 million people living in poverty as of 2019.

It is clear that there will be flexibility with regard to economic goals in 2020, but no retreat from the target of poverty elimination will be accepted.

Human consequences

The domestic significance of China’s achievements in poverty reduction is evident, but it can be seen even more clearly by placing it in an international context—because the decisive immediate problem facing the overwhelming majority of people in the world remains inadequate income, and for a large number it remains poverty.

It is important to understand that the issue of low income and poverty should not be envisaged only in narrow economic terms. It is quite literally a matter of life and death in its human consequences.

According to the latest internationally comparable data, for 2018, a person living in a low-income country, by World Bank classification, lives only 64 years compared to 81 years in a high-income economy. This is similar to the gap seen in advanced countries between poorer and richer parts of their cities. Consequently, not merely do those living in poverty have fewer real practical choices in life but they literally die many years younger than necessary.

China’s poverty line, as used in the Report on the Work of the Government, is domestically defined. But to make international comparisons a uniform international standard must be used. The World Bank’s definition of poverty is expenditure of $1.9 a day at 2011 international prices (purchasing power parity). Using this criterion, the first available internationally comparable data for the world and for China is for 1981 and the most recent for 2015—although China itself has made even further progress since then.Between 1981 and 2015, China reduced the number of those living in internationally defined poverty by 868 million—out of a world total reduction of nearly 1.17 billion. Therefore, China accounted for 74 percent, or almost three out of four, of the people taken out of poverty in the world.

Between 1981 and 2016, the latest World Bank data shows China reduced the number of people living in internationally defined poverty within its borders by 99.1 percent. By the end of 2020, it will have reduced it by 100 percent.

It is certainly gratifying to see that some other countries have begun to make progress in reducing the impoverished population, but China’s contribution to the global anti-poverty campaign is vastly greater than that of any other country. China has taken over five times as many people out of poverty as India, almost seven times as many as Indonesia, and over 20 times as many as the entire Latin American region.

These trends also have a decisive effect on the issue of human rights. The lives of the people lifted out of poverty in China have been vastly improved and their real choices in life greatly widened. This has contributed far more to humanity’s wellbeing than the absurd Western definition of human rights.

Different paths

These trends in poverty reduction also have a decisive significance for judging whether a socialist or a capitalist path is correct for development. This issue is rather easily settled by noting that if it was capitalism which took people out of poverty, the great reduction in poverty would have taken place in all capitalist countries but these, as already seen, account for a small proportion of the number of those taken out of poverty in the world. It is socialist China which is overwhelmingly responsible for global poverty reduction.

Furthermore, while China’s is by far the greatest reduction in the number of those living in poverty in the world, other socialist countries have also made outstanding progress. Viet Nam reduced the number of those living in poverty by 95 percent between 1992 and 2016.

To understand the scale of this, China has lifted more people out of poverty than the entire population of the EU. The rest of the world cannot mechanically copy China as the conditions in every country are specific, but it can learn from China’s development path. As President Xi Jinping said at the 19th National Congress of the Communist Party of China in 2017, socialism with Chinese characteristics “offers a new option for other countries and nations who want to speed up their development while preserving their independence.”

Basis of rejuvenation

Immediately after the founding of the People’s Republic of China in 1949, China achieved an increase in life expectancy which was the greatest recorded in a major country in human history. This was of decisive significance because it is well known that average life expectancy is the best indicator of overall social conditions. It sums up in a single figure all positive (high consumption level, good education, quality of healthcare and environmental protection) and negative factors (low consumption level, lack of education, bad healthcare and poor environmental conditions). But despite these outstanding social achievements, the Chinese economy remained at a low level of development in 1949-78.

In contrast, China’s economic growth during more than 40 years of reform and opening up after 1978 is the greatest in the whole of human history—as measured by speed of economic development, by the number of people whose lives were improved by this development, by the proportion of humanity which directly benefited from it, and by the sustained speed of increase in living standards. But as already seen, it was also marked by the world’s greatest poverty reduction. Such an economic development is the basis of the rejuvenation of the Chinese nation, of the improvement in China’s social conditions, and of China’s immense contribution to the improvement of the overall conditions of humanity.

The statement that China’s economic achievement is the greatest in human history in terms, not only of improvement of the conditions in China but of improvement of the overall condition of humanity, is therefore not one made by an “overheated” Chinese nationalist. Nor are they “polite words” uttered for the Chinese media. In serious matters such as China’s national rejuvenation, there is no virtue in exaggeration, no virtue in optimism and no virtue in pessimism—there is virtue only in realism. The statement that China’s economic development, including centrally its role in poverty reduction, is the greatest in human history is simply a statement of fact.

The author is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China, and former director of economic and business policy for mayor of London.