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China Set to Raise Poverty Line

The Chinese government may raise the poverty line to enable more people to get state benefits to meet their needs, officials and experts said on Tuesday.

The State Council, or the country's cabinet, will discuss such a proposal by the end of the year, Renmin University of China professor Wang Sangui said.

Lu Yan, spokeswoman for the council's Leading Group Office of Poverty Alleviation and Development, confirmed that the authorities were considering the proposal but declined to give details.

The cost of living in China is lower that in many other countries, hence the existing poverty threshold is an income of 1,067 yuan (US$152) a year.

So if the proposed 1,300-yuan-a-year (US$186) income (equivalent to US$1 a day in other countries) becomes the new threshold, the number of Chinese living in poverty would almost double to 80 million.

About 43 million people were living below the poverty line in the country's rural areas in 2007. Their number in urban areas was more than 22 million.

Such people get a set of allowances from the government, depending on the cost of living in the area of their residence. For instance, an urban poor gets a higher allowance than his rural counterpart.

They get other benefits, too, such as preferential treatment in healthcare and jobs, and their children get free education.

The proposal to raise China's poverty line was put forward much before last month, when the global yardstick was changed after the World Bank (WB) raised its poverty threshold from US$1 to US$1.25 a day.

According to the new WB criterion, about 207 million Chinese people were living in poverty in 2005.

That was 77 million more than the estimate in 2004, when the global poverty benchmark for the world was an income of less than $1 a day.

But the World Bank's new threshold does not change one fact: China has seen the fastest and largest shift from poverty, the experts said.

According to the WB, the number of people living below the poverty line in China fell from 835 million in 1981 to 207 million in 2005. During the same period, their number in the rest of the world fell by 500 million.

The proposed change can serve as a call for China, whose treasury has been increasing constantly, to take greater steps to lift more people out of poverty, said Wang Xiaolu, deputy director of the China Reform Foundation's National Economic Research Institute.

That is why he has suggested the poverty threshold be lifted from an income of 1,067 yuan to 1,300 yuan a year.

As China moves toward becoming a country with mid-level per capita income, it has become necessary to redefine poverty, Wang said. The basic expenses on education and medical treatment have to be considered to ensure that those in need can create their own opportunities, Wang said.

The country's economy, growing in double digits for the past few years, should help the government introduce more effective policies to help the poor, he said.

(China Daily September 3, 2008)

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