China Explores New Paths to Poverty Eradication

Change Starts with Mentality

What is needed to turn the tide for poor people in Xingtai and elsewhere in China is a change in mentality. And this is exactly the direction indicated by recent government measures. However, in Xingtai these efforts are still very much in their infancy.

“When Deng Xiaoping implemented the reform and opening-up policy in 1978, the strategy was clear and widely accepted throughout the whole nation,” Tan explained. At first, the planned efforts for promoting China’s development concentrated only on the eastern and southeastern coastal regions, as they offered the best structural preconditions for rapid growth and prosperity.

The next step in the big picture on the government’s drawing board is for regions in central and western parts of the country to gradually catch up with the eastern regions. This can be achieved with the support of the economic strength, resources and know-how gained by people, businesses, and government institutions during the first period of development.

“Today, this strategy is already being implemented through initiatives like ‘1,000 companies support 1,000 villages.’ This project involves successful companies from eastern regions assisting poor villages in other regions with investments,” said Dong Guoping, director of the Department for International Affairs at the State Council Information Office of China, and one of the organizers of my trip to Xingtai.

Here in south Hebei, the plan is to connect these essential factors. Financial aid plus government assistance and help from businesses and NGOs should go hand in hand with a change in mentality, driven by innovative concepts which actively involve poor people in the process of economic development.

An excellent example of how this two-pronged strategy has been implemented is the Agricultural Carnival Project in the county of Nanhe. Here, a huge greenhouse complex was built on an area of 47,000 square meters. It comprises six themed halls growing local fruits and vegetables, traditional medicinal herbs and other plants. This is a joint project between the local Nanhe County Jinyang Construction Investment Co., Ltd. and China Agricultural University in Beijing, which also designed the buildings. The greenhouse complex in Nanhe is the fourth of its kind nationwide.

The project not only promotes agricultural research, but also serves as a local tourist attraction offering an educational recreation space. Revenue comes not only from entrance fees but also from rental fees for using the halls as the backdrop for wedding photos.

But what exactly has this to do with poverty eradication? Besides creating new job opportunities for locals, the Nanhe Agricultural Carnival Project also inspires the entrepreneurial spirit of local farmers. In 2016, each farmer was given RMB 4,000 from the local fund towards poverty eradication.

“We offer farmers the opportunity to invest this sum of money in the Agricultural Carnival Project by allowing them to purchase shares in the project,” a Carnival employee explained. “We sign a five-year contract with them and every year they receive a dividend of RMB 400, which is 10 percent of their investment.” After five years the farmers then can decide whether they want to continue their investment or get their RMB 4,000 back. “This way, we encourage local people to think long-term and to invest their income in a profitable way, instead of spending it all in one go.”

The project targets not only material poverty, but the whole “culture of poverty,” a term coined by the American anthropologist Oscar Lewis in the 20th century. His theory states that in the process of poverty eradication one must change and overcome traditional patterns of thought and behavior within the poor communities. Otherwise the “culture of poverty” will simply be passed on to the next generation.

Two other key projects in the program for poverty eradication in Xingtai are working towards the same goal. Both of them are located in Lincheng County.

One is the recently established Hebei Runtao Husbandry Sci & Tech Co., Ltd. – a sheep breeding company which has been running since 2012. This project allows local farmers to become shareholders with the investment of a RMB 6000 subsidiary paid by the local government. Every year, shareholders receive an annual dividend of RMB 480. The company buys sheep fodder from local farmers for more than the common market price. In addition, the company has created new jobs for local people.

The next step is to provide training to local farmers in the field of sheep breeding, giving them the opportunity to start up as entrepreneurs in the sheep breeding industry.

Hebei Lüling Manor Co., Ltd. follows a similar approach. Since it started in 1999, the firm has become one of the leading producers of organic walnuts in China. Lüling Manor is also a company that ensures local farmers become part of its success story.

Today the firm grows walnuts in eight villages around Lincheng County. The company covers the whole production chain from research and development, through breeding and cultivation, to processing, online marketing and nationwide distribution. It currently employs over 8000 people, most of them locals.

“Some of the young people who migrated to the big cities have found their way back to Xingtai and are now working for us,” said Gao Shengfu, founder and director of Lüling Manor. “These young professionals bring back up-to-date knowledge and valuable working experience and we offer them good opportunities for their personal development.”

However, it is not just entrepreneurial success stories and share-holding models for local farmers that give poor people in Xingtai hope for the future. The government is also introducing groundbreaking methods of allocating funds.

These new means of support reach far beyond traditional forms of financial safeguarding, like health insurance or pensions. The municipal government of Xingtai, for example, has installed solar energy plants in all poor villages. These plants not only provide enough electricity to meet the villagers’ needs, but also make a profit that is shared with the villagers, giving them long-term income support.

Through innovative measures like these, the local government managed to lift five million people out of poverty during the 12th Five-Year Plan period (2011-2015). By 2020 (the end of the 13th Five-Year Plan period) the government aims to make significant progress in this area and lift all people out of poverty.

American psychologist Martin Seligman once put forward the hypothesis that many people who live in poverty, whether they are from the Western world or developing countries, suffer from so-called “learned helplessness.” Their circumstances and life experience confuse their way of thinking, perhaps making them feel that their personal decisions are irrelevant.

To break this vicious circle, capacity-building activities should be organized to enhance the overall knowledge of poor people and thus enable them to help themselves in the long term. This is exactly what Chinese government is now aiming for. Recent successes in China concerning these efforts have shown that a change in mentality is able to move mountains.

This mental shift might be crucial to overcoming the existing imbalance in development in China. However, this process of changing mentality does not concern the poor alone. A real change – and this is true for China as well as for the rest of the world – can only be made, if the same conditions for development are provided for all members of society.

For China, this means that results depend on the fulfillment of a promise made at the start of the period of reform and opening-up; a promise given by people in the more developed eastern and coastal regions to the people in the less developed central and western areas; and a promise to give a helping hand to these left-behind regions.

To achieve this goal, a change in mentality is necessary for everyone. People might then realize that coming from Beijing instead of Xingtai, or being born into a family of academics instead of coming from a working-class background is not something one should take for granted. It is necessary to realize that certain conditions go hand in hand with particular social responsibilities, no matter where you are in the world.