Transitions in and out of poverty

Declining Marginal Utility on Anti-poverty Efforts

Q: According to the World Bank, China has lifted 790 million rural people out of poverty since the end of the 1970s, contributing over 70 percent to the poverty alleviation efforts. China has always emphasized the importance of ideas about combating poverty. Why did the central government advocate adopting targeted measures to address the issue this time?

A: People living in rural areas were all poor during the early period of reform and opening-up. At that time, it was easy for rural people to rise from poverty as China had initiated some people-oriented policies.

Taking the Household Contract Responsibility System as an example, the system allows farming households to manage agricultural production on their own initiatives while the farmland remains in the ownership of the rural collective. It raised productivity and increased agricultural output, which laid a solid foundation for nurturing an economic takeoff and promoting comprehensive industrialization and urbanization. And then, a large number of rural people were rising out of poverty while more start-ups were springing up.

That is to say that hundreds of thousands of rural people benefited from the policy during the economic opening up. However, there has been a decline in the marginal utility on poverty reduction in terms of China's remaining poor populations. When poverty within a country rises to high levels, the remaining impoverished people are the hardest to reach. In addition, they are stuck in poverty due to various of reasons. Consequently, it is necessary to launch targeted measures in its poverty alleviation campaign to uplift the remaining poor families.

Q: China aims to reach its goal of eradicating poverty by 2020, as required by the 13th Five-Year Plan. What kinds of steps is the central government prepared to take to achieve the 2020 poverty relief target?

A: Earlier this year, Chinese president Xi Jinping pointed out that China vowed to win the battle against poverty and attain the annual goal of poverty alleviation and reduction.

Furthermore, according to the government work report delivered by Chinese Premier Li Keqiang on March 5, the central government would increase its poverty alleviation budget by 43.4 percent this year, lifting at least 10 million people out of poverty by the end of the year.

Additionally, China's vice premier Wang Yang expected a good start and called for fresh efforts to alleviate poverty, hoping to uplift at least 14 million poverty-stricken people in China's countryside each year.

Q: Some local officials may risk falsifying figures just to attain the above-mentioned goals. What are the steps you will take to prevent it from happening?

A: The central government thought of the problem as soon as the figures were published. We fear some that local governments may count people as being out of poverty when in fact they are not. Now, we come up with a new way of counting the poor, such as, creating files for the poor and promoting an exit strategy to ensure that they have no chance to manipulate, hide or falsify data.

Figures are often one of the first things that government officials see when examining the impact of various anti-poverty programs. But sometimes figures do not show the whole picture. For instance, a family may be well off with an income of 3,000 yuan (U.S. $461) monthly per person on the condition that their living cost is not high. To a family with 4,000 yuan (U.S. $615) each month per person, the family may fall into deep poverty once one of them has become ill or gained access to further education.

Q: Frankly speaking, creating files seems so simple. How could you ensure its implementation? And who will identify the needy?

A: In fact, local officials or cadres in charge should go down to the grassroots units to get a better understanding about the needy. And then, the villagers committees, the primary mass organization of self-government, can publish a list of the underprivileged residents to enhance its transparency among locals. All the villagers can participate in the discussion, helping to identify the poor.

In addition, we hope to introduce a third party evaluation, in which experts play an important role. The design of a sampling strategy for a quantitative inquiry means a lot to file creation when identifying the poor. By using quantitative approaches, data analyzed from sampling is more reliable and accurate.