Index > Briefing
Sunday, March 21, 2021
Poverty Alleviation in China

On February 25, 2021, President Xi Jinping declared China's "complete victory" in eradicating absolute poverty during a national commendation conference. President Xi added that China has lifted all rural poor people out of extreme poverty under the current standard, with 832 counties, 128,000 villages, and 98.99 million impoverished people shaking off poverty. Regional poverty as a whole has been resolved, accomplishing the arduous task of eliminating absolute poverty.

Poverty eradication has always been a major challenge for global development and governance, and China has made outstanding achievements in this regard. Since the launch of the reform and opening-up, 770 million impoverished rural residents have shaken off poverty when calculated in accordance with China's current poverty line; China has contributed more than 70% of global poverty reduction over the same period when calculated in accordance with the World Bank's international poverty line. In particular, against the backdrop of severe global poverty and the widening income gap between the rich and the poor in some countries, China has met the poverty eradication target set out in the United Nations' 2030 Agenda for Sustainable Development 10 years ahead of schedule.

Poverty is a major problem plaguing human society, and poverty alleviation is a subject of great concern and importance to the society. As the national economic development tends to stabilize and the wealth inequality reaches a certain extent, the moral sense of human society will drive the international community to make poverty eradication a long-term goal. Poverty alleviation has different significance in different stages of history, especially in China, which has a relatively backward economy and a large population.

Since the establishment of the People's Republic of China, the focus of poverty alleviation in China before the reform and opening-up was to solve the problem of feeding the world's most populous country. This was indeed a big challenge at that time. After the introduction of the reform and opening-up, China reformed its production and the problem of hunger was gradually solved. From 1976 to 2012, the focus of China's poverty alleviation work shifted from solving the problem of hunger to solving the problem of malnutrition, and it also began to focus more on enhancing the wealth of the population. Since 2012, the nature and significance of poverty alleviation have been changing along with changes in international and domestic situations. According to Chan Kung, founder of the ANBOUND, poverty alleviation in China is not only about the basic quality of life of a part of the population, but also about the competitiveness of the country as a whole.

Economists and sociologists may not have a complete view of the significance of poverty alleviation in the modern world. In the view of economists, poverty alleviation is, to a large extent, a matter of development economics, wealth distribution, and social welfare. In the eyes of sociologists, poverty alleviation is a matter of morality, equity, and social justice. For international organizations such as the United Nations and the World Bank, poverty alleviation is an issue of reducing poverty in the world, and it is necessary to help poor countries alleviate extreme poverty to avoid humanitarian crises. These "mainstream views" all reflect the perception of poverty in a certain era.

For China in the future, poverty alleviation will take on new significance -- it is related to the country's international status, national competitiveness, and discourse power. To a considerable extent, poverty alleviation is the key to China's status as a great power. In other words, a country full of poverty will not have a high status in the world. Conversely, a country that has eliminated poverty and moved toward overall prosperity will be a country that has great influence in the world.

Whether a country as a whole is poor or rich is directly related to its level of consumption. If a country has a high level of poverty rate, its consumption level, and consumption space are bound to be small, making such a market unattractive. China is the largest developing country in the world. Given the results of China's poverty alleviation work, the world may have two different attitudes towards China. On the one hand, China has effectively solved the problem of poverty. As its consumption space continues to expand, China's huge market is attractive to the world. On the other hand, China's huge market will become less attractive if its poverty problem is not addressed. If there are too many poor people, China's huge market will not be sustainable.

Poverty alleviation is a worldwide problem, and poverty exists to varying degrees in countries around the world, regardless of whether they are developed countries, developing countries, or extremely impoverished countries. Poverty exists even in developed OECD countries. The United States, as the most powerful country in the world, has seen the gap between rich and poor widen in recent years, and the number of poor people is increasing. According to the data released by the Federal Reserve in 2020, the gap between the rich and the poor in the U.S. is widening, with the wealthiest 1% of individuals in the U.S. having a wealth of USD 34.2 trillion, which is equivalent to 15 times the wealth of more than half of the individuals in the United States. The widely distributed poor population has become the base of the U.S. Democratic Party.

From this point of view, the world's poverty alleviation has a strong competitive nature. A country's international influence depends on whether its poverty problem can be solved. The collapse of the Soviet Union in the early 1990s was not entirely due to Cold War and containment strategies from the United States, but rather the Soviet Union's own worsening poverty problem. It could be said that the problem of poverty led to the collapse of the Soviet Union. China's immediate neighbor, North Korea, has been plagued by the problem of widespread poverty for years, according to disclosed public information.

Considering such a global competition, how well the problem of poverty is resolved is a major challenge for countries. If the problem of poverty is not solved effectively, the foundation of the country's development will be unstable, and its science and technology, military affairs, and major policies will lose the foundation of development. If poverty persists and universal affluence is not achieved, the foundations for national development and competition will be weak. Only by solving the problem of poverty can a country remain competitive in international competition. In other words, poverty alleviation is a major issue related to national competitiveness, and the country needs to take it seriously.

In the future national competition, containing a country does not necessarily require the use of brute force. As long as a country is kept in poverty, it will be difficult for it to become a development challenge to other countries. It is appropriate and necessary for China to look at the poverty problem from the strategic level of national competition.

Final analysis conclusion:

China has made remarkable achievements in poverty alleviation, which is a great progress in the country's development. That being said, China's sustainable development still depends on further poverty reduction and eradication in the future. This is not only the basis for building a moderately prosperous society in all respects, but also a key area that will determine its competitiveness.

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