India "India Express" article on October 10, original title: How China reduces poverty; enlightenment to India
Last week, World Bank released the latest report on global poverty. The report pointed out that since 2015, due to slowing growth and slowing down the pace of poverty reduction, and the epidemic and war have led to a complete regression, so "the world is unlikely to achieve the goal of eliminating extreme poverty by 2030."
According to the definition of World Bank , people with daily living expenses below $2.15 are considered in extreme poverty. In 2019, about 648 million people worldwide were in this situation. According to World Bank data, India has the largest number of poor people. Worse, the number of Indians living in extreme poverty increased by 56 million in 2020. According to the World Bank estimates that 70 million people fell into poverty in 2020, which means that under the epidemic, 8 out of every 10 people falling into poverty in India are in India.
Who can India learn from? Over the past week, some have admitted that India faces three rather sharp and growing problems: unemployment, the gap between the rich and the poor, and poverty. Election victory cannot solve these problems. They require practical policy solutions. Otherwise, India's demographic dividend will be more like a population bomb. But there is one country—China— whose population is comparable to India and is recognized worldwide as reducing poverty at an unprecedented speed and scale. Understanding China's approach may provide some clues to Indian policymakers.
What achievements has China made? To facilitate other developing countries to learn from their experience, the World Bank and the Chinese Ministry of Finance conducted a study in 2019 to understand what achievements China has achieved and how it has achieved them. The study was released earlier this year.
World Bank found that from 1978 to 2019, China's poor population dropped from 770 million to 5.5 million. This means that China has lifted 19 million people out of extreme poverty per year on average over 40 years. This accounts for almost 75% of the global population with extreme poverty during this period. In 2021, China announced that it had eliminated extreme poverty (as defined by its national poverty line), 765 million people have been lifted out of poverty since 1978, and announced that China "build a moderately prosperous society in all respects."
China's decades of progress are also reflected in the significant improvements in other welfare indicators. For example, life expectancy rose from 66 in 1978 to 77 in 2019, and the infant mortality rate dropped from 52‰ in 1978 to 6.8‰ in 2019. Before 1978, China's educational achievements were relatively higher than those of other developing countries, but with China's popularity of basic education and secondary education, educational achievements have been further improved. Overall, China's improvement in health, education and income over the past 40 years can be reflected in the improvement of China's human development index ranking: from 106th place in 1990 (144 countries) to 85th place in 2019 (189 countries).
How did China do it? China's successful poverty reduction depends mainly on two pillars. The first pillar is rapid economic growth, which is supported by a broad-based economic transformation, providing new economic opportunities for the poor and increasing average income. The reform began with agriculture. After the introduction of market incentive mechanisms, the poor benefited directly from the improvement of related productivity.
A key point to be noted here is that reform must be gradually promoted. The World Bank found that China's gradual model adopted in economic reform is reflected in the gradual liberalization of agricultural and industrial product markets, the management of residents' mobility and urbanization, and the state plays a greater role in the ownership of key assets and resource allocation than other market economies.
The second pillar is the government's policy of continuing poverty reduction. It initially targeted areas that were at a disadvantage due to geographical environment and lack of economic opportunities, and later focused on poor families everywhere. These include social security policies for poor families, such as social assistance, social insurance, social welfare and other targeted social policies.
China's success is also inseparable from the other two important factors. "China's success is due to effective governance, which is the key to the successful implementation of the growth strategy and the ever-growing set of targeted poverty alleviation policies." As the World Bank said, the system China has established for the achievement of results is determined by its specific environment.For example, China is very big, so the implementation of the plan will not be a one-size-fits-all approach, there is a lot of room for local experiments, and the degree of competition among local governments is very high. Of course, local trials are subject to strong oversight and accountability for achieving consistency.
China also benefited from some favorable conditions during the reform and opening up, such as a higher level of human capital. This is widely regarded as a key factor in the rapid benefit of population from new economic opportunities after market reform begins. (Author Woodette Misla, translated by Chen Junan)
