IFAD: China needs to ensure its poverty eradication sustainable
BEIJING: On February 25, 2021, President Xi Jinping announced that China has succeeded in eradicating extreme poverty. This is an extraordinary achievement: In just 40 years, China managed to lift more than 800 million people above the poverty line – about 100 million in the last eight years – becoming the first developing country to achieve Sustainable Development Goal 1: eradicating extreme poverty. No other country can claim to have brought so many people out of poverty in such short period of time.
However, has China really eradicated poverty? One of the most commonly used arguments to challenge such an assertion is that the poverty line set by China (i.e. 2,300 yuan per year at 2010 constant prices, which today equates to about US$2.30 a day at 2011 purchasing price parity – somehow comparable to the international poverty line of US$1.90 a day) is too low for an upper-middle-income country, and thus not representative for China. This argument hints that if a higher poverty line were adopted, then a large share of China's population would still be categorized as living in poverty.
While this argument is certainly valid, in my view it risks to narrowly limit the discussion – and the assessment of China's achievements – to an overly theoretical debate on the 'correct' definition of poverty – which, no matter the definition of poverty adopted, can always be questioned. Moreover, restricting the discussion of China's poverty reduction achievements to the numeric value of the poverty line used by China fails in my view to give sufficient credit to the enormous progress made by China in improving several other dimensions of human development beside income. Life expectancy, for instance, has increased by more than 10 years in the past 40 years, and the infant mortality rate has decreased more than five times in the same period. Today, about 95 percent of students in China complete the nine years of compulsory and free education. All key indicators on food security – prevalence of undernourishment, malnutrition, wasting, etc. – have drastically improved over the past 40 years, and, according to the Global Hunger Index (GHI), the level of China's food insecurity today is low.
"Has China eradicated poverty?" is thus, in my opinion, not the appropriate question. The right question – and most relevant today – is:"Are China's extraordinary achievements sustainable?"
Although China has succeeded in bringing all its population above the poverty line, there is still a significant share of the population that live above but dangerously close to the poverty line. According to the World Bank, almost one-fourth of the population live on less than US$5.50 a day, the typical poverty line in upper-middle-income countries. Premier Li Keqiang recently declared there are over 600 million people in China whose monthly income is barely 1,000 yuan. As the Covid-19 pandemic has showed in many countries, people barely above the poverty line are particularly vulnerable to shocks, and at risk of falling into poverty when facing a sudden, unexpected event: the loss of a job, a period of high expenditures, like children's education, an increase of food prices or a bad harvest, or – as in the case of Covid-19 – a disease.
