Transformation of China’s poverty reduction strategy and related challenges

WANG Chen1 WAN Guanghua2 WU Wanzong3

(1.Institute of Finance and Economics, Shanghai University of Finance and Economics)
(2.Institute of World Economy, Fudan University)
(3.School of Economics, Fudan University)

【Abstract】China will soon declare eradication of poverty under the current official poverty line of CNY 2300 (2010 prices) per person per year. The government is planning to target relative poverty instead of absolute poverty. At this critical juncture, it is important to review China’s experience in poverty reduction and examine the planned transition to the use of relative poverty line. Employing the technique of Shorrocks and Wan (2009), this paper recovers individual income observations from grouped data which are available from statistical yearbooks. The recovered data are then used to estimate both absolute and relative poverty under alternative poverty lines for China as a whole and for individual provincial regions. The estimation enables calculation of poverty gaps. The analytical results indicate that absolute poverty has declined dramatically but relative poverty has been rising since the reform and opening up. In particular, the poverty gap analyses demonstrate that China faces little difficulties in eliminating absolute poverty under the official or World Bank poverty lines, but it is pre-mature to adopt relative poverty lines, given the current government budget and status of income distribution. The paper puts forward a series of policy suggestions.

【Keywords】 poverty lines (standard); transfer payment; absolute poverty; relative poverty;

【DOI】

【Funds】 National Natural Science Foundation of China (71833003) National Natural Science Foundation of China (71703088) National Natural Science Foundation of China (71903130)

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(Translated by WANG bo)

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This Article

ISSN:0253-2654

CN: 11-1996/Q

Vol 47, No. 03, Pages 718-726

March 2020

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Article Outline

Abstract

  • 1 Introduction
  • 2 Data and methodology
  • 3 Absolute poverty in China: reviewing and evaluating China’s poverty reduction achievements
  • 4 China’s relative poverty
  • 5 Challenges faced by the transformation of poverty alleviation strategies
  • 6 Summary and policy recommendations
  • References