Reality check that helps nation's poor

PUBLISHED : Saturday, 10 December, 2011, 12:00am
UPDATED : Saturday, 10 December, 2011, 12:00am


The superlatives over the years from the UN, World Bank and economists to describe China's poverty-fighting successes have been gushing. Among them have been 'enviable', 'remarkable' and 'amazing', and with justification: so many people have been pulled from the depths of despair in such a short space of time. Without taking the shine off the achievement, though, the poverty line has not been adjusted often enough to keep pace with economic growth, depriving needy people of the help they would have received had it been set at a more realistic level. It is good, therefore, that authorities have acknowledged the error of their ways and the threshold has been revised upwards to better reflect circumstances.

The revision is truly dramatic. Before the threshold was increased by 80 per cent from last year's figure, to a per capita annual income of 2,300 yuan (HK2,800) or less, 26.88 million rural people were determined to be living in absolute poverty, with insufficient food and clothing and inadequate housing. Now the number is expected to soar to 128 million. China's threshold is now close to, if not above, the World Bank's definition of absolute poverty, set at US$1.25 a day, or 2,910 yuan a year, since that standard is based on purchasing power parity, which factors in the lower prices in poor countries.

Poverty is hard to quantify. Few governments use the World Bank's definition. China has stuck to its own, and has notched up impressive achievements since market-oriented reforms were implemented in 1978. About 84 per cent of the population was determined to live in extreme poverty in 1981. By 2005 that had been lowered to 16 per cent, and last year to less than 1 per cent. Beijing has never wanted to admit China has an excessively large proportion of poor people, but successive calculations were clearly too low. From 1985 to 2009, the poverty benchmark was raised from 200 to 1,196 yuan, though there was a 14-fold rise in per capita GDP. As late as it may be, the central government has to be praised for now admitting the level was too low.

The higher threshold will mean the poor get more assistance, and those most in need have to be located and helped. But throwing money at them is not the solution; they most need better education and jobs. Poor communities, mostly in western provinces but scattered throughout the mainland, need improved infrastructure to attract factories that provide work. Allocating funding to make this happen was not possible with authorities unwilling to face up to reality.

President Hu Jintao wants to rid the nation of extreme poverty by 2020. That, in turn, will help stabilise and boost the world economy. It is a lofty, but readily attainable goal, and the first stage of that process can begin now that there is an acceptance that poverty is more widespread than previously acknowledged.