How to eradicate extreme poverty: Part 2 – What did China do?
Updated 15:09, 25-Feb-2021
Keith Lamb
A Chinese migrant worker in Wuhan, Hubei Province, central China, December 6, 2004. /Getty

A Chinese migrant worker in Wuhan, Hubei Province, central China, December 6, 2004. /Getty

Editor's note: Keith Lamb is a University of Oxford graduate with an MSc degree in Contemporary Chinese Studies. His primary research interests are China's international relations and "socialism with Chinese characteristics." The article reflects the author's opinions and not necessarily the views of CGTN.

The macro-foundation of China's success in eradicating extreme poverty has been its governing system, which allows for independent policy setting and long-term planning. However, what in particular has China's governing system done to bring China to where it is today?

Firstly, the backdrop to alleviating poverty has been China's use of its socialist market system, which became a major driver for China's growth. However, while private entrepreneurship acted as a driver of growth and thus poverty alleviation too, China, despite external pressure, never did relinquish the role of its big state-owned enterprises (SOEs).

China's SOEs give the Chinese people a democratic edge when controlling who their economy works for. Under the Chinese system, SOEs work in conjunction with China's long-term plans, instead of working primarily for capital incentives.

For example, in 2017, centrally administered SOEs carried out more than 1,500 poverty relief projects in regions with abject poverty. SOEs were mandated with following policymakers' plans to work toward lifting, at that time, China's remaining 30 million people out of absolute poverty.

To this end, in 2018, all central SOE established offices for poverty alleviation. In 2018, they raised 15.4 billion yuan ($2.38 billion) for poverty alleviation projects. By 2020, the figure invested in poverty relief projects by SOEs had reached almost 100 billion yuan ($15.47 billion).

China's success then has come from being non-dogmatic. When judging the merits of SOEs vs. private enterprise, China found that clearly both have their advantages when it comes to their role in alleviating poverty. Consequently, the principle that all states should follow is to allow all sovereign states to have the freedom to choose their own political-economic system.

Secondly, China's investment in public infrastructure has been a major factor in lifting itself out of extreme poverty. From 1994 to 2000, in an effort to lift the remaining 80 million Chinese citizens living in extreme poverty, a total amount of 920 million yuan ($140 million) was spent every year building rural highways in 529 poor counties. This effort culminated in 2020 with the pledge that every village in China would have access to asphalt roads by the end of the year.

For the poor, this has reduced poverty by improving market access and has increased access to services and economic opportunities. Furthermore, the building of infrastructure has provided ample employment opportunities, which stimulates spending in the economy. It is this proven success that has further led to the Belt and Road infrastructure projects gaining wide traction in the global south.

This infrastructure push has also played its part in spurring demand for engineers. In turn, as I have personally witnessed, Chinese universities have been increasingly educating the children of farmers and workers so that they can partake in China's infrastructure revolution. This education windfall further creates intangible benefits as upward mobility and education success lays the ideological foundations for escaping poverty of thought where social stagnation leads to despondency.

Where infrastructure development has been too challenging, due to geographical factors, entire villages have been relocated. This was especially the case for mountainous areas which, according to the Outline of Poverty Alleviation and Development in Rural China (2011-2020), were the location of 10 of China's 14 most impoverished areas.

The residents of southwest China's Atulie'er Village, who used rope ladders to climb up a cliff face when leaving their village, were resettled from their clay huts with open-pit fires to new apartments with modern appliances, toilets, running water, gas and electricity.

Of course, the enrichment of China as a whole has been a story of movement from the countryside to towns and cities where more employment opportunities can be found. China's foresight led to the early building of urban centers in preparation for this rural-to-urban migration. In China, what were once known as "ghost cities" and the object of ridicule by the Western media are now filling up. These new cities with plentiful accommodation have led to Chinese urbanization without the disaster of widespread slum dwellings and extreme urban poverty.

Thirdly, crucial to China's eradication of extreme poverty, and widely underreported in the West, has been its ability to mobilize the members of the Communist Party of China (CPC) to assist in poverty alleviation efforts. Throwing money at the poverty problem is simply not good enough and with this recognition, CPC members had to experience poverty themselves and work with the destitute so that target responses could be formulated.

For example, in Shibadong Village in central China's Hunan province, it was found that a few people due to severe hardships suffered in life lacked an adequate work ethic. Many lacked any skills to make gainful employment. This led to specific training to stimulate industries like bee-keeping and fruit farming.

A villager receives the money she earned from dividend in Shibadong Village of Huayuan County, Hunan Province, central China, January 17, 2019. /Xinhua

A villager receives the money she earned from dividend in Shibadong Village of Huayuan County, Hunan Province, central China, January 17, 2019. /Xinhua

However, the mountain village of Shibadong lacked roads, internet coverage was poor and the ability to use the internet was lacking. This meant shipping goods to the markets and accessing the vast online market was impossible.

Through a combination of subsidies, mentoring, education and infrastructural improvements, Shibadong was turned into a thriving village. In addition, the picturesque mountains that originally acted to inhibit development of the rustic village of Shibadong became, along with the village itself, the backdrop to a burgeoning tourist industry.

The targeted approach of the CPC flies in the face of Western right-wing market ideology which dismisses government as being a hindrance to poverty alleviation and economic development. In fact, the specific type of government and the nature of each system needs to be based on its own merits rather than dogma.

At any rate, China's success in poverty alleviation, while still a work in progress, is unprecedented. As such, it is now time for Western countries to pay greater attention to China's measures as clearly the Western methods of aid and intervention have proved ineffectual for eliminating extreme poverty in the global south.

How to eradicate extreme poverty: Part 1 - China's governing system

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