China Set to Hit Target of Eliminating Poverty

Economic Growth Plays Key Role

China has contributed to almost 70 percent of global poverty reduction. According to Mr. Hofman, economic growth is the main reason for China’s poverty reduction. He is quite familiar with the history of China’s economic development and the efforts the country has made to alleviate poverty.

“Overall growth has been very high over the last 35 years in China, with an average annual growth rate of more than nine percent, which means many people can find new jobs, better jobs, and more productive jobs. Therefore, they can lift themselves from poverty. It happens because of the reform in the economic system.” Mr. Hofman noted that the reform process began in agriculture. The introduction of the household contract responsibility system at the end of the 1970s was a tremendous boost for poverty reduction. But, he believes, the reforms went beyond that – urban reforms, the socialist market economy, and China’s entry into the World Trade Organization all played important roles. “China has opened up and urbanized quite rapidly, becoming the world’s manufacturing hub. That means a lot of people have moved from rural areas to urban areas. This allows people to find more productive jobs, moving from agriculture to manufacturing and services with increased income.”

Policy also plays a significant role. Policies on education are very important in enabling people to change their lives. In addition, China has built a lot of infrastructure which means cities can grow, and the economic system is increasingly supported by the private sector.

Daxue Village in Liaoning Province highlights education as a crucial part of targeted poverty alleviation.

Mr. Hofman stressed that other countries cannot simply “copy” China’s method of poverty reduction, because China has forged its own unique path to development tailored to its specific circumstances. Still, some parts of China’s experience are worth examining. Mr. Hofman pointed out: “It’s very important to start from agriculture. Most of the poor in other countries also live in rural areas and are engaged in agriculture. Some of them face similar constraints as China did. Strengthening property rights of farmers – that’s what the household contract responsibility system did – actually gives farmers more ownership to the land. People invest more in the land and they work harder, which increases productivity. China has done very well in investing in people. It makes sure that people have the capabilities to benefit from the economic growth that happens through reforms. Other countries can learn from that.”