China Reports Dramatic Drop in Rural Poverty

Friday, November 18, 2011

China has reported a dramatic decrease in rural poverty over the last decade.

The number of rural citizens living below the national rural poverty line fell from 94.2 million people (10.2% of the rural population) in 2000, to 26.88 million (2.8%) last year, according to figures released Wednesday by China’s State Council.

The sharp drop occurred despite the fact the national rural poverty benchmark was raised from 865 yuan (US$136) in 2000 to 1,274 yuan (US$201) in 2010.

The Council’s white paper evaluates the government’s “Development-Oriented Poverty Reduction Programs,” a wide range of rural policies, such as agricultural subsidies, social security measures, and improved infrastructure for access to water, electricity, and transportation.

“Wage growth is the key to understanding this whole development in China,” said Duncan Innes-Ker, Beijing-based senior editor and economist at the Economist Intelligence Unit.

Ker said the dramatic decrease “doesn’t shock him at all” citing the “phenomenal scale of income growth,” whereby average annual incomes are growing at rates of 15-20%.

“Even the poor have been experiencing very strong growth in incomes…in the last five years, the supply of unskilled or semi-skilled labor is starting to fall short of demand, so wages for those labor classes have been growing very fast,” he added.

Previously, the supply of rural labor in cities greatly outstripped demand, keeping wages low.

Source: CNN (link opens in a new window)