Policies and Practices in Chinas Rural Poverty Reduction

Policies and Practices in China’s Rural Poverty Reduction Development September 19 th 2016, Shanghai

Content China’s Achievement in Poverty Reduction China’s Experience in Poverty Reduction Challenges that China Faces in Poverty Reduction China’s Strategies in Targeted Poverty Reduction 11/25/2020

I. China’s Achievement in Poverty Reduction (1) Poor population greatly reduced, the problem of food and clothing in rural areas are basically solved The accumulative poor population (in line with the national povertyreduction standards) China has so far reduced exceeds 700 million. Poverty occurrence ratio (see below) has decreased by a large margin. China has also established a minimum guarantee mechanism in rural areas, completed the five-guarantee system, and secured the basic life of rural residents who are unable to work.

(2) Rural economic growth speed up, salient improvement in living standards 1. From 2001 to 2014, net income per capita and gross regional product per capital of farmers in key poverty-allieviation counties increased faster than the national average. 2. By 2013, around 90% of villages in key counties have access to motor way, electricity, and telephone and TV networks.

3. Numbers of famers with secure and clean water supply have increased dramatically 4. Schooling rates of children eligible for school in key counties reached 97. 7%; the illiteracy rate among the young and the middleaged has been greatly reduced; 5. In 2013, 92% administrative villages had clinics; full coverage of new-type rural cooperative medicare has been realized; grass-roots medicare and health system keeps improving.

(3) Contribution to the global poverty reduction In the developing world excluding China, extreme poverty rate has decreased 57%, from 41% in 1990 to 18% in 2015. With China included, the rate has been decreased 69%, from 47% in 1990 to 14% in 2015. China managed to reduce its poor population from 835 million in 1981 to 173 million in 2008, and is the first country to realize the MDG targets "Reduce the Poor Population by Half. "

Chart：Changes of Absolute-poor Population in China and among the World（1981 -2013） Year 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010 2013 Absolute poor population in China (million) 835 720 586 683 633 446 363 212 173 157 68 Absolute poor population in the world China/World （%） (million) 1938 1858 1768 1907 1911 1702 1738 1636 1386 1300 1212 43. 1 38. 7 33. 1 35. 8 33. 1 26. 0 25. 7 22. 2 15. 3 13. 0 HCR in China HCR in the （%） world（%） 84. 0 69. 4 54. 0 60. 2 53. 7 36. 4 35. 6 28. 4 16. 3 13. 1 11. 8 5 52. 2 47. 1 42. 3 43. 0 41. 0 34. 8 34. 0 30. 7 25. 0 22. 6 20. 6 Source：World Bank database，Povcal. Net: the on-line tool for poverty measurement developed by the Development Research Group of the World Bank, 2013. Data for 2013 is an estimate of the author.

China's progress in achieving MDGs Goals Status Goal 1：Eradicate extreme poverty and hunger Goal 1 A：From 1990 to 2015, halve the number of Achieved population earning less than 1. 25 dollars per day Goal 1 B：Let all ppl, incl. women and the young to have Basically achieved access to productive and decent jobs Goal 1 C：From 1990 to 2015, halve the population of starving people Achieved

Content China’s Achievement in Poverty Reduction China’s Experience in Poverty Reduction Challenges that China Faces in Poverty Reduction China’s Strategies in Targeted Poverty Reduction 11/25/2020

II. China's experience in poverty reduction Reform the Land Mechanism Basic Experience in Povertyreduction 1. Reform Driven Economic Growth Reform the Economic Mechanism Reform the Political Mechanism 2. Infrastructure Construction 3. Special Poverty. Reduction Policies Road Water Electricity Housing Gas Rural Development Policy Developmental Poverty-reduction Policies Social Securities Policies

(1) Reform Driven Economic Growth Reform is a major impetus to poverty reduction in China. In the west theory, it is called empowerment, in China’s theory, it is called to liberate productive force. 12

Stimulate Economic Growth with Reform (19781985) ßLand System. Reform Þ In the 1980 s, established the household contract responsibility system Þ Empowerment to farmers for their right to work ßEconomic System Reform Þ Removed restrictions on agricultural product pricing and built market price system, let the farmers have access to free trade Þ Allowed free movement of labor force, empowered farmers to work elsewhere to increase their income Þ Allow the establishment of private enterprises and granted the right to do business freely ßPolitical System Reform 13

Stimulate economic growth with reform (1978 -85) • From 1978 to 2009, economic growth rate maintained 10% • Large numbers of jobs created, shifting over 200 m rural labors to non-agricultural sectors • Rural infrastructure improved • Fed 22% world's population with 9% world's land 6% world's water resources • Adequate food and clothing achieved • In 7 years, poor population reduced from 250 m to 125 m, with annual decrease of 17. 86 m population 14

(2) Infrastructure Construction • 1. Road Traffic Construction in Poor Areas Cement roads in towns and villages Replace and renovation of dangerous roads and bridges Rural highway networks Coach stations in townships Important waterway transportation facilities 15

Jiangxi Gansu 16

Infrastructure Projects • Small-scale infrastructure • Starting from 1980 s • Recruitment of labors from poor families • Increase income of the poor • Build roads, agricultural irrigation facilities, drinking water projects, field construction, grass fields construction • 2001 -2010, accumulative investments reached 55 billion RMB. 17

ßWater conservation projects ÞFive small projects：water cellars , small ponds, small reservoirs, small pumping stations, small canals

Upgrading of Rural Electricity Network Henan Herdsman family 19

Upgrading of Dangerous Rural Houses 20

(3) Special Poverty-reduction Development Government Led Social Participation Targeted Povertyreduction To villages and households Regional Detoughness Comprehens ive Developmen t Self-reliance Inborn Drive 21

LGOP State Council Leading Group of Poverty Alleviation and Development LGOP 1. Government-led Poverty-reduction body：State Council Leading Group of Poverty Alleviation and Development provincial (autonomous region, or municipality) leading group of poverty alleviation and development prefectural (autonomous prefecture, league and municipality) leading group for poverty alleviation and development county (banner) leading group of poverty alleviation and development provincial (autonomous region, municipal) office of poverty alleviation and development prefectural (autonomous prefecture, league, municipality) office of poverty alleviation and development county (banner) office of poverty alleviation guiding and coordinating relationship leading relationship 22 town office of poverty alleviation

Government-led Target: Governments at all levels regard poverty-reduction as an essential goal Strategy: “Seven-Year Poverty Alleviation Priority Plan (1994 -2000)” “China Rural Poverty Reduction and Development Program (2001 -2010)” “China Rural Poverty Reduction and Development Program (2011 -2020)” 23

Special Poverty-reduction fund – 2015 46. 7 billion RMB 24 24

Content China’s Achievement in Poverty Reduction China’s Experience in Poverty Reduction Challenges that China Faces in Poverty Reduction China’s Strategies in Targeted Poverty Reduction 11/25/2020

III. Challenges in Poverty-reduction (1) Poverty-reduction and Development still face tough challenges China is still in the preliminary stage of socialism. Due to historical, natural and social factors, major conflicts and deep-layer problems, poverty-striken areas remain to be tackled. Much work remains to be done to help people shake off poverty and become well-off. Poor areas and poor people are the short slab in building a comprehensive well-off society. The major task for poverty-reduction and development is to repair this short slab. The fifth Plenum of the 18 th CPC Central Committee pointed out that by 2020, according to the current standards, all rural population will be lifted out of the poverty line. China will realize the United Nations MDGs 10 years in advance by 2030.

(2) New features of the poverty problem 1. China's development is unbalanced. The development gap between urban and rural areas and among different regions still exist. Income gap between different groups of people are still expanding.

2. China has a huge population under poverty. In line with the national poverty-reduction standards, China still has over 70 million people in poverty, dispersed in adjoining clusters with tough conditions. In these areas, the ecological environment is very fragile, living conditions are exceptionally bad, natural disasters frequently occur, high-level education coverage is slim, infrastructure construction and social development are far lagging behind. All these make the reduction of poverty in these places a "tough problem” to solve.

Poverty standards： 2300 RMB（as of 2010），2855 RMB in 2015 Population in poverty： 55. 75 million（end of 2015, amout to the overall population of a moderate population scale country） Villages under poverty： 128, 800 registered National key counties of poverty reduction and development： 592 1/5 national total county number Clusters of extreme poverty： 14, involving 680 counties Key and sectional counties： 832

3. The urbanization process leads to more poor people in urban areas, such as farmers deprived of land, farmer workers who can't find work or have an unstable income after enterting cities, and miners who still live in shantytowns. 4. Among the old people, women and children who have to stay in rural areas, women and old people suffer more labor burden and children suffer lack of education and malnutrition. 5. Becoming poor due to severe illnesses or disasters is rampant, the rate of returning to poverty in some places with fragile ecological conditions stays high

Content China’s Achievement in Poverty Reduction China’s Experience in Poverty Reduction Challenges that China Faces in Poverty Reduction China’s Strategies in Targeted Poverty Reduction 11/25/2020

IV. China’s Targeted Poverty-reduction Strategy (1)Major PR & D goals in the“ 13 th Five-year Plan” The 18 th CPC Central Committee's 5 th Plenum confirmed the goal that ：Rural people under poverty in line with current standards must all be lifted out of poverty, all counties under poverty will be removed of the title, and regional overall poverty problem will be solved. China Rural Poverty Reduction and Development Program (2011 -2020) requires “two no worries, three secures, one higher than, and one close to ”that by 2020, poverty -reduction targets should be secured access to food and clothing, compulsory education, basic medicare and housing; income increase per capita in poor areas should exceed that of the national average; indexes of major sectors in basic public services be close to national average level; and the expanding developmental gap should be turned back.

(2) China's Targeted poverty-reduction strategy • "Targeted Poverty Reduction" is a basic requirement for poverty reduction since the 18 th NPC was held and is also and will be the most salient feature of the poverty reduction strategy in the 13 th Five-year plan period. • From a birdview, the focus of poverty reduction follows a path from section to county, then to village and finally to household. Since the 18 th NPC, the new poverty-reduction leading group has upheld targeted poverty-reduction as guiding principle for the deployment of poverty-reduction tasks. • Currently, the poor people are dispersed over an extensive area with localized concentrations. Therefore, poverty-reduction must be shifted from regionoriented to population-oriented.

1、Content of Targeted poverty reduction Six "Targets" ßTargeted poverty-reduction target ßTargeted project deployment ßTargeted use of fund ßMeasures Targetedly implemented in household ßTargeted dispatch of "first secretary" in villages ßTargeted poverty-eradication effect Precision in target is the precondition, precision in project, fund, measure and personnel dispatch is the means, and precision in effect is the goal.

2. Major approaches to ensure Targeted poverty reduction How to achieve Targeted poverty reduction ßProduction development ßLabor transfer ßEcological protection ßEducation development ßSocial security network

3. Policy measures for Targeted poverty reduction • Utilize political advantages. Improve mechanism of leadership, reform assessment mechanims of counties in poverty, strengthen leadership force in poor counties, do well in grass-root organization buidling, select and dispatch "first secretary", delegate working teams to poor villages • Consolidate the registration mechanim. Check the registration mechanism, conduct random check of local data, on-site check to optimize the mechanism, increase data quality and dynamically upgrade data. • Increase capital input, such as fiscal reserve capital, financial capital and social capital.

• Explore the promotion of various "profit to household" mechanisms. Encourage local governments to boldly innovate mechanisms, such as poverty-reduction modes that are company-driven, cooperative-driven, collective household production, asset profit. The key is to ensure that poor household participate and gain profits from production, employment or asset income. • Mobilize more resources to participate in poverty-reduction. Improve point poverty-reduction, poverty-reduction coodination between the east and west, conduct health poverty-reduction activities, establish incentive mechanisms for enterprises, social organizations and individuals to participate in poverty reduction, set up the 1017 Poverty-reduction Foundation and establish the Promotion Association for Poverty-reduction Volunteers.

• Carry out 12 key programs based on local characteristics：wholevillage advancement, vocational education and training, small credit loans for poverty reduction, household transfer, ecommerce poverty-reduction, tourism poverty-reduction, photovoltaic poverty-reduction, training for poor villiage leaders to lead the rest out of poverty, flagship enterprise driven • Respect the free will of poor people. The government must not act on poor people's behalf, nor force them to accept what they don't want. The people have the right to know, participate in, manage and supervise poverty-reduction projects.

The 18 th CPCCC's 5 th plenum requires: ——As the concluding plan for buidling a comprehensive well-off society, the 13 th Five-year Plan must give more attention to reparing the short slabs in achieving the target. Lifting poor rural people out of poverty is a salient short slab. ——Launch a campaign to crack tough issues in poverty eradication. Lifting poor rural people out of poverty is the toughest task to complete before building a comprehensive well-off society. We must fully utilize political and institutional advantages and be resolute to win the battle against tough issues in eradicating poverty.

"China will fully utilize platforms such as International Poverty Reduction Center in China for international communications about poverty reduction, put forward Chinese schemes, and contribute Chinese wisdom, and more effectively promote the sharing of poverty-reduction experiences among developing countries“ ——Xi Jinping，Oct 16, 2015

Thank you！