• Hamsini Hariharan

So near, so far—Banishing poverty in China in 2020

This article first appeared in CNBC TV-18 on August 10, 2020 and can be accessed here.

Every year, the Chinese government releases No. 1 Central Policy Document (zhongyang yihao wenjian) a document that outlines its priorities for the year. And for the last 17 years, rural rejuvenation and poverty alleviation have featured at the top of the report. This year was no different, except in one crucial way: China’s deadline to end absolute poverty by the end of 2020 is drawing nearer every day.

Absolute poverty refers to the Chinese poverty line, which is set at an annual income of 2300 yuan a year (approximately 24700 rupees annually or 67 rupees a day). In 2016, Chairman Xi Jinping had declared that poverty is one of the three battles that China faced and drew up a plan for rural revitalization. However, his push was merely building upon work that the Chinese State had begun in the 1980s. Since the reform and opening-up, approximately700 million people have lifted themselves out of poverty in China, and numbers suggested that the 2016-2020 campaign only needed to raise 5.5 million people out of absolute poverty.

Xi’s goal-setting set off several ‘targeted policies.’ In 2016 alone, seven lakh Communist Party officials took up short-term posts in rural areas, and over the last four years, the government and Chinese banks pledged billions of dollars to fund projects. Large companies like Tencent and Alibaba pitched in with funding and rural e-commerce projects like Taobao villages. Xi’s campaign even has a link to the outbreak of the COVID-19 pandemic. Some experts suggest that the push for targeted trade industries led to the boom in wildlife breeding and domestication, while industry regulations remained underdeveloped.

The pandemic has thrown a spanner in the works of poverty alleviation. For the first time in decades, the Chinese economy shrank by 6.8% during the first quarter. China’s economic woes are further compounded by the worst floods since 1998, hostilities with the US and high rates of unemployment. Premier Li Keqing announced at the National People’s Congress that 600 million Chinese people earn only 1000 yuan per month. However, it is unlikely that the Chinese government will announce it has missed its targets on poverty alleviation at the end of 2020. As the shocks in the economy are sure to send some people back into poverty, this victory will be rhetoric at beast.

The Chinese government is not looking to give up. It has increased its messaging about succeeding with the deadline in national and international publications. It is also possibly looking at passing laws to intensify the campaign. Earlier this week, the Chinese newspaper, Caixin, reported that, “The State Council Leading Group Office of Poverty Alleviation and Development plans to study national-level poverty alleviation legislation to deal with relative poverty after completing its goal to eradicate absolute poverty.” However, it is still unsure how effective legislation would be in targeting a country, particularly in a country where the rule of law accounts for little.

When focusing on rural poverty, the Chinese government also overlooks urban poverty, particularly the plight of migrants who perform the most backbreaking work in cities, small and large. Further poverty alleviation programs hardly tackle structural problems such as land ownership, availability of public services and opportunities in rural areas. Until the Chinese State works towards solving these problems holistically, its moderately prosperous society will continue to be a far-off dream.

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