The Development-oriented Poverty Reduction Program for Rural China

V.The Aid-the-Rural-Poor Program in the Early Period of the 21st Century

Alleviating and eliminating poverty remains a long-term historical task for China. In order to quicken the pace of solving the problem of poverty, which remains unsolved to a certain degree in certain areas, a meeting on this issue was held in May 2001 by the Central Government. An overall plan for aiding the poor in rural areas in the first ten years of the 21st century was worked out. After the meeting, the Chinese Government officially issued the Outline for Poverty Alleviation and Development of China's Rural Areas (2001-2010), setting out the objectives, tasks, guiding ideology, and policies and principles for work in this regard in the coming ten years. The Outline is another programmatic document following the Seven-Year Priority Poverty Alleviation Program for guiding the poverty alleviation work in the rural areas.

The development-oriented poverty alleviation drive in rural China early in the 21st century is a rare historical opportunity, but it still faces serious challenges and problems.

Favorable Conditions

China today is blessed with many favorable conditions, some of them much more favorable than in the past, in its poverty alleviation drive. Great attention has been paid to the work by governments at various levels; support has been given by all sectors of society; and the cadres and ordinary people of the poor regions are working hard with one heart and one mind. These are the most important conditions for guaranteeing the steady progress of the work. With regard to the objective environment, we have the following favorable conditions:

-A sound base has been laid for the poverty alleviation work. After more than 20 years of hard work, the problem of food and clothing of the impoverished population has been basically solved; production and living conditions in poverty-stricken areas have improved by a wide margin; the ability to withstand natural calamities and develop production in those areas has been strengthened; and we have accumulated a rich store of successful experiences and found out a number of effective methods in the practice of the poverty relief work. All these are helpful to the progress of our future work in this regard.

-The sustained growth of the economy in the future will quicken the process of the work of poverty alleviation. Practice has proved that economic growth is the key to solving the problem of poverty. The coefficient of elasticity of the reduction of China's poverty-stricken population and economic growth was -0.8 in the 1990s. That means that the increase of one percentage point of the GDP will reduce the size of the rural poor by 0.8 percent. In accordance with the state's economic development plan, China's economy will score an annual increase of seven percent in the coming five years. So there will be a further demand for workers, some of whom will come from the poor areas. As a result, the standard of living in those areas will be improved. At the same time, along with the steady improvement of the comprehensive national strength, the state will pour more resources into development and construction in the poor areas, providing a sound material base for the development of those areas.

-The economic restructuring is conducive to the development of the poor areas. At this time when there has been an increasingly fierce competition in both domestic and foreign markets, China is devoting major efforts to adjusting and optimizing its industrial structure. The developed regions, on the one hand, have quickened the pace of upgrading their industries and energetically developing capital- and technology-intensive industries. On the other hand, in order to improve the competitiveness of their industries, they are transferring some labor-intensive industries to the less-developed areas. The poor areas, mostly situated in the central and western parts of China, have relatively rich resources and cheap labor, which place them in a locationally advantageous position to respond to such transference. It is fully possible for the western region to import capital and technology, and accept transferred industries, so as to improve their position in the division of regional industries and quicken the change of local industrial structure and economic development.

-The implementation of the large-scale development strategy for the western region is also helpful for poverty alleviation and will have a far-reaching influence on the reduction of the impoverishment rate. The focus of the development strategy is on quickening the construction of infrastructure, especially the building of water conservancy, transportation and telecommunications facilities, and the strengthening of eco-environmental protection and construction. During the Tenth Five-Year Plan period (2001-2005), a large number of projects will be undertaken in the western region. In addition, many preferential policies for the development of the western region have been formulated by the state, such as the increase of the percentage of foreign capital to be used by the western region and special state bonds issued mainly for the development of this region. The construction of a sequence of major projects and the implementation of the preferential policies will lay a good foundation for eliminating the backwardness of the poor areas in the western region.

-Opening wider to the outside world will bring new opportunities for the development of the poor areas. After China joins the WTO, the markets of these areas will expand further and open wider to the outside world, which will be favorable for the development of their advantageous labor- and resource-intensive industries, bringing more employment opportunities. Though the existing industries in those areas may be adversely affected after China enters the WTO, in the long run this will be good for the transfer of their workers and the export of their labor-intensive products.

Difficulties and Problems

The main difficulties and problems for China in the early period of the 21st century in the field of poverty alleviation are as follows: First, though the income of the poverty-stricken people has been obviously improved, the current standard for poverty relief in China is very low. Second, restricted by unfavorable natural conditions, weak social insurance system and their own poor comprehensive ability, the people who now have enough to eat and wear may easily sink back into poverty. Third, although the development-oriented poverty reduction drive has greatly changed the poverty and backwardness of the vast impoverished rural areas, there has been no qualitative change either in the basic production and living conditions of the poverty-stricken peasant households, or in the social, economic and cultural backwardness in those areas. Fourth, because of its large population, China will face employment pressure for a long period to come. This pressure is bound to adversely affect the employment of the impoverished population, so much so that many effective aid-the-poor measures will not play the roles they should play. Fifth, people who still do not have enough to eat and wear generally live in areas with adverse natural environments, a low level of social development and underdeveloped social services, where the contrast between input and result is very sharp.

Targets and Goals

The Chinese Government will persist in taking those in impoverished areas who do not have enough to eat and wear as the first to be helped. Though their number is not large, there are a lot of difficulties in helping them get rid of poverty. At the same time, those who have just enough to eat and wear should be helped steadily to shake off poverty. Because their production and living conditions have not basically changed and they are not strong enough to fight natural calamities by themselves, these people will easily sink back into poverty once struck by natural disasters. So our future task is to further help those people become rich after they have shaken off poverty.

China's overall poverty alleviation goal from 2001 to 2010 is as follows: To help the small number of needy people without enough to eat and wear attain that minimum standard of living as soon as possible, and further improve the basic production and living conditions of the poor areas and consolidate the results gained in this regard. At the same time, the quality of life and comprehensive quality of the poverty-stricken people shall be improved, and construction of infrastructure facilities shall be speeded up in impoverished rural areas. In addition, their eco-environment will be improved, and their social, economic and cultural backwardness changed, so as to create the conditions for a future comfortable life.

From 2001 to 2010, the Chinese Government will concentrate its poverty alleviation efforts on the ethnic minority areas, old revolutionary base areas, border areas and destitute areas in the central and western regions. Some counties will be designated for special help. The government will use its financial, material and human resources in a concentrated way in the comparatively concentrated poor areas. A unified plan will be drawn up, which will be carried out on a yearly basis. The government will combine separate guidance with a comprehensive approach in the work.

Ways and Means

The Chinese Government will adopt the following ways and means in its poverty alleviation work up to 2010:

-Continuing to put the stress on crop cultivation and aquiculture and poultry raising, and efforts will be concentrated on helping the poor people to develop specialty and competitive products in this field. With increasing the income of the poverty-stricken people as the focal point, we shall optimize the varieties of products, improve their qualities and increase their benefits by reliance on sci-tech progress. In line with the principle of improving the eco-environment, the protection and construction of the ecological environment will be strengthened so as to achieve sustainable development. With the market as the orientation, comprehensive investigation should be done concerning products that are going to be put into production. Services in the fields of information, technology and sales should be guaranteed in order to ensure the increase of production and incomes.

-Promoting the industrialized operation of agriculture. In line with the requirements for industrialized operation, farm products with resources advantages and marketability should be produced or planned and developed according to an integrated plan, so as to develop a characteristic, regionally leading industry. Great efforts will be made to develop "cooperation between farmers and companies" and a made-to-order farming. Large and medium-sized agricultural products processing enterprises capable of developing new markets should be guided or encouraged to build raw material production bases in the poor areas and provide serialized, pre-production, in-production and post-production services for impoverished peasant households, so as to form an industrialized operation featuring the integration of trade, industry and agriculture and the coordinated management of production, supply and sale.

-Increasing budgetary funds and loans for poverty alleviation. The state will further increase the scale of work-relief projects and, in line with the practical financial difficulties of the poor areas, strengthen financial transfer payments and implement the control of budgetary poverty relief funds with the household as the basic unit. The increased relief loans shall be used for developing crop cultivation, aquiculture, poultry raising, labor-intensive enterprises, farm produce processing enterprises, market circulation enterprises and infrastructure construction, which will help raise the incomes of the poverty-stricken people. Small-amount credit loans will be extended in an active and steady manner to help needy peasant households develop their production.

-Improving the basic production and living conditions of the poor areas. Construction of basic farmland, infrastructure, environmental improvement projects and public service facilities will be strengthened with the township or village as the basic unit. By 2010, the drinking water problem for both people and livestock will be basically solved in the key state-helped poor areas, and at the same time efforts will be made to provide most of the administrative villages with electricity, road access, and postal, telephone, radio and TV links. In addition, hospitals will be built in most of the poor townships, and clinics in most of the poor villages, so as to basically control the main endemic diseases seriously affecting the life and production of those areas.

-Improving the sci-tech and cultural qualities of the masses in the poor areas. In order to help the peasants acquire advanced and practical techniques, it is necessary to integrate agriculture, science and education, make overall plans for general, vocational and adult education, and run vocational and technical schools and short-term training classes with clear aims in mind. The nine-year compulsory education will be guaranteed in the poor areas, and the attendance rate of school-age children will be further raised. The old backward habits and customs will be changed, and a scientific and civilized life-style will be promoted in those areas.

-Encouraging economic organizations with diverse forms of ownership to assist with the development of the poor areas. The Chinese Government will create a better policy and investment environment to attract economic organizations with diverse forms of ownership to help the economic development of the poor areas. Necessary support will be given by the state to agricultural products processing enterprises that meet the demands of the market and can upgrade their industries and help increase the incomes of thousand and one households; resource-exploitation enterprises that will give full play to the resource advantages of the poor areas and improve their eco-environment; labor-intensive enterprises that can provide employment for the surplus labor force in the poor areas; and enterprises that can help the poor and needy solve the problem of market circulation.

-Mobilizing the whole of society to assist with the development of the poor areas. To enlist greater social involvement in this sphere of endeavor, the state will mobilize society at large to take part in the poverty alleviation drive, in addition to the resources provided by the government. In accordance with the development-oriented poverty reduction program, further efforts will be made to promote counterpart cooperation between the eastern developed coastal region and the poverty-stricken western region, enlarge the scale of the cooperation and increase the momentum of the relief work. It is necessary to encourage and guide non-governmental exchange and cooperation at different levels and in diverse forms, especially cooperation for common development between enterprises. It is also necessary to give play to the important role of all social sectors in the development-oriented poverty reduction efforts and actively create conditions for non-governmental organizations to take part in or implement the government development projects in the poor areas.

-Promoting international exchange and cooperation in development-oriented poverty relief. We shall continue our efforts to win aid projects from international organizations and developed countries. In order to guarantee the smooth carrying out of these projects, the state will increase the proportion of corresponding supportive funds appropriately, or provide full-amount supportive funds if the local budget is tight. In view of the local characteristics of the poor areas, measures should be adopted to strengthen the management of foreign-aid projects. It is necessary to work hard to improve the economic returns from foreign-loan and other foreign-aid projects, and improve our capability to repay the loans. It is also necessary to strengthen exchanges with international organizations in development-oriented poverty relief, and learn from the successful experience and effective measures introduced by the international community in this sphere of endeavor, so as to improve our poverty relief work and its overall benefits.

-Standardizing the work of development-oriented poverty alleviation. The responsibility system has to be carried out earnestly in this sphere of work. The provinces shall assume overall responsibility, while the counties shall formulate concrete measures for implementation in the villages and ensure that the individual households benefit from the work. Cadre training and the building of the democratic political power at the grassroots level in the poverty-stricken areas shall be strengthened, so as to enhance the capabilities of the cadres and organizations at the grassroots level in leading the people to get rid of poverty and become well-off. The auditing of the poverty relief funds and the relief-related statistical and supervisory work should be strengthened and become a regular practice that should be persevered in for a long period in the future. Poverty relief organs should be stable, and their leading ability and ability of coordinated management in the poverty relief work should be raised. With its steady deepening, the work for development-oriented assistance to the poverty-stricken areas should be standardized and institutionalized and gradually put into the orbit of the legal system.

China is a developing country, and it has a long way to go to shake off poverty. The basic solution of the problem of food and clothing of the poverty-stricken population in rural areas is only the result of one phase in our effort to accomplish this historic task. Subsequently, it will still take a long period of hard work to enable the people in the poor areas to first live a comfortable life and then a well-off life. With the progress of the reform and opening-up and the modernization drive and the steady increase of China's comprehensive national strength, our development-oriented poverty reduction program for the rural areas is bound to be crowned with new success.