Poverty Amidst Prosperity

Written by Tong Xiaoxi

China is in the middle of a big leap forward to becoming prosperous. Praised as the new “world’s manufacturing plant”, the country is at the world top rank in manufacturing of apparels, electronics, home appliances and motorcycles. Moreover, China has more to show to the world than an oversupply of cheap labor for making those goods. In recent years, China has also earned the title of world second largest luxury consumption nation, and is soon becoming a world champion in this regard by overtaking Japan. The torrent of material wealth has not flushed away poverty, which remains a deep rooted social problem. Like many other third world countries, China has a vast peripheral area which still lacks safe drinking water or basic medical care. An urban poverty is also growing fast in crowded inner cities. Environment is being ravaged by climate change and resource depletion, which is causing the loss of livelihood for many. Women in some cases are still discriminated against, costing their chance of social advancement. These are all instances of intransigent poverty, alongside the glittering prosperity. It is especially puzzling when poverty persists when China is fast becoming an economic powerhouse, as urbanization and modernization is being pushed ahead with full force. The issue has become a concern for both the public and the government.

A few months ago, the Chinese government made an adjustment to the poverty line, by drastically raising it from 1274 RMB to 2300 RMB, a 92% upward change. As a result, China’s poverty population increased from 23 million to 128 million. The new standard is quite close to that set by the World Bank, which stands at US$ 1.25 a day, refl ecting China’s intention to come to terms with international standards. The more than five-fold increase in poor population, as aresult of the poverty line adjustment may seem contradictory to the current pinky outlook of China’s increasing prosperity. In fact, the effort of poverty alleviation has been puzzling all along: according to offi cial statistics, it took 30 years to elevate 200 million Chinese people from poverty; however, it proves far more diffi cult to lift the remaining 20 million, or the last 10% of the original poverty population.

These puzzling facts all points to a structural nature of poverty, instead of an abstract number that is the poverty line. Poverty reflects not just material scarcity, but also the kind of social relations and justice desired by a society. While the poverty line is artifi cial and seemingly arbitrary, the gulf between the “haves” and “have-nots” is quite apparent and real.

Growth and accumulation in wealth alone does not necessarily lead to poverty alleviation. In fact, poverty is created and reproduced in the very process in which wealth is created. Let us see how this works in contemporary China. My first example is “poverty through medication”. As China’s socialized medicine is very limited, many peasants risk spending all their savings and getting permanently into debt in case of being seriously ill and having to pay for expensive medicine and treatment. The newly promoted “New Rural Medical Coop” only pays a 70% of locally incurred costs, so many peasants are forced to forgo treatment. According to one Chinese health offi cial, among the rural poor, being not able to pay accounts for 72% of those who are sick not seeing a doctor, and 89% of those who need to be hospitalized not doing so.

A second channel to poverty is, curiously, “through education”. A survey a few years ago revealed that 43% to 46% of the rural and urban poor reported “having to fi nance the education of the young” as the cause of being poor. Indeed this is poverty creation with Chinese characteristics. As education becomes increasingly a commodity with a price tag, millions of rural parents are hard pressed for cash. Among the rural poor, supporting a college student usually means emptying all the family savings or getting into debt; nonetheless, the student is often unable to pay back the family’s investment upon graduation, as he or she will have a hard time fi nding a job, due to lack of connections in the cities.

A still third channel to poverty is through environmental degradation. The link between ecological destruction and poverty is already highlighted in the 2011 Human Development Report of UN. In China, the unraveling of nature’s balance is threatening the vulnerable livelihood of many people in an extreme and astonishing manner. Natural disasters, together with engineering projects and population relocations are all cited as major causes of poverty. A grim and shameful case was reported by the ADB and Tianjin government: as a result of excessive diverting of water to the megaregion of Beijing-Tianjin, a rural poverty belt ringing the megaregion has been developed.

In sum, as wealth is created and accumulated in the turbo mode, poverty is also developing and metamorphosing fast. Poverty now exists in both the rural and the urban, and in both the rich and poor areas, as social inequality is becoming ubiquitous. Many poor people now are those who had once been “lifted from poor”, but “fell back” to poor due to illness, “natural” disaster, or “education expenses”. In the past 30 years, governments and non-governmental bodies have fi rst relied on the so-called “poverty alleviation through development” strategy and then switched to the so-called “poverty alleviation through participation”. However, both strategies fell short of their promises. A still more questionable aspect of the poverty alleviation effort has been the setting up of state certifi ed “poverty county” system. It is puzzling that while poverty population has reduced from the 1983 level of 125 million to that of 80 million in 1993, the number of “poverty counties” had increased from 258 to 592. Many county governments covet the title of “poverty county” as it brings privileges and resources.

We all know poverty does not stay neatly within a county. It exists in an unequal social relation, and in every case in which substantial human needs are not met. Consequently, the effort to battle poverty requires not just governmental effort, but also the initiatives of enterprises and the civil society. Poverty affects everyone, if we realize that barriers to the development potentials of those in poverty are also barriers to general happiness for all members of the society. This is exactly the rationale for “sharing the fruits of reform”, as advocated by the Chinese government.