CHINA’S COSTLY DRIVE TO ERASE EXTREME POVERTY
It has spent heavily to help its poorest citizens but may find that hard to sustain. By Keith Bradsher
When the Chinese government offered free cows to farmers in Jieyuan, villagers in the remote mountain community were sceptical. They worried officials would ask them to return the cattle later, along with any calves they managed to raise. But the farmers kept the cows, and the money they brought. Others received small flocks of sheep. Government workers also paved a road into the town, built new houses for the village’s poorest residents and repurposed an old school as a community centre.
Jia Huanwen, a 58-year-old farmer in the village in Gansu province, was given a large cow three years ago that produced two healthy calves. He sold the cow in April for US$2,900 (86,780 baht), as much as he earns in two years growing potatoes, wheat and corn on the terraced, yellow clay hillsides nearby. Now he buys vegetables regularly for his family’s table and medicine for an arthritic knee.
“It was the best cow I’ve ever had,” Mr Jia said. The village of Jieyuan is one of many successes of President Xi Jinping’s ambitious pledge to eradicate abject rural poverty by the end of 2020. In just five years, China says it lifted from extreme poverty more than 50 million farmers left behind by breakneck economic growth in cities.
But the village, one of six in Gansu visited by The New York Times without government oversight, is also a testament to the considerable cost of the ruling Communist Party’s approach to poverty alleviation. That approach has relied on massive, possibly unsustainable, subsidies to create jobs and build better housing.
Local cadres fanned out to identify impoverished households — defined as living on less than $1.70 a day. They handed out loans, grants and even farm animals to poor villagers. Officials visited residents weekly to check on their progress.
“We’re pretty sure China’s eradication of absolute poverty in rural areas has been successful — given the resources mobilised. We are less sure it is sustainable or cost effective,” said Martin Raiser, the World Bank’s country director for China.
Beijing poured almost $700 billion in loans and grants into poverty alleviation over the past five years — about 1% of each year’s economic output. That excludes large donations by state-owned enterprises like State Grid, a power transmission giant, which put $120 billion into rural electricity upgrades and assigned more than 7,000 employees to work on poverty alleviation projects.
The campaign took on new urgency this year as the country faced devastation from the coronavirus pandemic and severe flooding. One by one, provinces announced they had met their goals. In early December, Mr Xi declared that China had “achieved a significant victory that impresses the world”.
But Mr Xi acknowledged further efforts were needed to share wealth more widely. A migrant worker in a coastal factory city can earn as much in a month as a Gansu farmer earns in a year.
Mr Xi also called on officials to make sure that newly created jobs and aid for the poor did not fade away in the coming years.
Gansu, China’s poorest province, declared in late November that it had lifted its last counties out of poverty. Just a decade ago, poverty in the province was widespread.
Hu Jintao, China’s leader before Xi, visited people living in simple homes with few furnishings. Villagers ate so many potatoes that local officials were embarrassed when a young girl initially refused to eat yet another one with Mr Hu in front of television cameras because she was tired of them, according to a cable disclosed by WikiLeaks.
Although many villages are still reachable only by single-lane roads, they are lined with streetlights powered by solar panels. New industrial-scale pig farms, plant nurseries and small factories have sprung up, creating jobs. Workers are building new houses for farmers.
The government helps private factories buy equipment and pay salaries if they hire workers deemed impoverished but the viability of these factories without ongoing aid is far from clear. Until the subsidies arrived, they frequently had trouble paying wages on time.
While the poverty alleviation programme has helped millions of poor people, critics point to the its rigid definitions. It assists people classified as extremely poor at some point from 2014 to 2016, without adding others who may have fallen on hard times since then. It also does very little to help poor people in big cities where wages are higher but workers must pay far more for food and rent.
The government’s complicated criteria for determining eligibility for aid stipulates that anyone who owns a car, has more than $4,600 in assets or has a new or recently rebuilt house is excluded.
The party’s campaign-style approach also fails to tackle deep-seated problems that disproportionately hurt the poor, including the cost of healthcare and other gaping holes in China’s emerging social safety net. Villages provide limited health insurance and hefty medical bills can ruin families.
Despite the challenges, the political benefit of the poverty relief programme may guarantee its survival. Gratitude for the programme seems to be reinforcing the political power of the party in rural areas.