POVERTY IN PRC

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Despite the magnitude of the reduction in the offi cial estimates of poverty

there is still a considerable debate on the scale of poverty in PRC and on the

accuracy of offi cial statistics. Further, with the restructuring of state-owned

enterprises and consequent unemployment, urban poverty is becoming a

sensitive political issue, even though offi cial statistics suggest that the latter

is still a trivial phenomenon. The Appendix to this chapter surveys the

debate on the poverty line and the alternative national poverty estimates

that are available for rural and urban areas. However, there is widespread

agreement that today poverty is principally a regional problem with serious

pockets of poverty in particular provinces.

PRC is a large country with wide differences in resource endowment,

climate, population, and economic and social development. Rural poverty

is to a large extent a regional phenomenon with a high concentration

in the southwestern, northwestern and central mountainous areas. The

problem of poverty is especially serious in the areas inhabited by minority

nationalities.

Based on the offi cial poverty line and income data in different provinces

collected from household surveys, the National Bureau of Statistics (NBS)

have estimated the poor population in each province and autonomous

region. Data on the provincial incidence of poverty and the proportion of

the provincial poverty-stricken population in the national total for 1985,

1993 and 2001 are given in Table 4.1.

Based on the data from these three years, we can conclude that broadly

the provinces or autonomous regions suffering from comparatively serious

poverty are Henan, Inner Mongolia, Shanxi, Shaanxi, Gansu, Ningxia,

Qinghai, Xinjiang, Guangxi, Sichuan, Guizhou and Yunnan, while

the provinces or regions having a comparatively large poverty-stricken

population are mainly Henan, Shaanxi, Gansu, Guangxi, Sichuan, Guizhou

and Yunnan. All are in the western region, except Henan.

Table 4.1 Poverty incidence by province (headcount ratio) (1985, 1993

and 2001)

Poverty Percent of national

incidence poor population

Province 1985 1993 2001 1985 1993 2001

North

Beijing 0.0 0.55 0.53 0.0 0.03 0.06

Tianjin 0.0 0.14 0.52 0.0 0.01 0.07

Hebei 4.90 13.76 1.81 1.88 9.07 3.33

Henan 24.90 12.59 2.10 13.68 11.92 5.64

Shandong 2.30 5.83 0.70 1.24 5.18 1.56

Northeast

Liaoning 6.50 3.85 3.22 1.14 1.07 2.55

Jilin 0.0 6.23 3.08 na 1.13 1.51

Heilongjiang 14.10 5.22 4.55 2.08 1.20 2.92

Table 4.1 (continued)

Poverty Percent of national

incidence poor population

Province 1985 1993 2001 1985 1993 2001

Northwest

Inner Mongolia 10.60 10.75 13.30 1.17 1.90 6.28

Shanxi 4.10 11.87 6.62 0.69 3.31 5.25

Shaanxi 41.60 19.19 7.78 8.33 6.50 7.36

Ningxia 53.00 29.53 13.60 1.34 1.31 1.80

Gansu 43.90 26.15 9.60 6.03 6.20 6.64

Qinghai 5.00 16.79 16.90 0.11 0.66 1.95

Xinjiang 0.90 14.10 6.50 0.05 1.48 2.02

Yangtze River

Shanghai 0.0 0.15 0.0 0.0 0.01 0.00

Jiangsu 0.0 2.42 0.20 na 1.61 0.36

Zhejiang 4.50 3.53 0.18 1.22 1.57 0.23

Anhui 5.10 8.55 1.79 1.83 5.19 3.13

Jiangxi 12.10 3.24 2.76 2.72 1.27 3.02

Hubei 3.70 6.16 1.82 1.16 3.12 2.44

Hunan 12.60 3.14 2.09 4.92 2.06 3.86

South

Fujian 6.30 1.14 0.24 1.16 0.37 0.22

Guangdong 0.0 0.50 0.06 na 0.34 0.14

Hainan na 4.67 1.72 na 0.27 0.30

Southwest

Guangxi 22.20 7.82 3.35 6.08 3.72 4.62

Chongqing na na 3.99 na na 3.33

Sichuan 35.10 10.12 3.31 24.98 11.77 7.83

Guizhou 36.80 21.85 10.40 7.72 7.90 11.12

Yunnan 41.30 23.77 7.89 9.90 9.71 9.34

Tibet na 5.98 15.20 na 0.15 1.13

National average 14.81 8.83 3.20 100.00 100.00 100.00

Note: na = not available.

Source: Calculated by the author from data supplied by NBS.

Since the poor rural population is mainly concentrated in remote

mountainous areas with a fragile ecological system, a harsh climate and

underdeveloped infrastructure and social services, the poor are vulnerable

to internal and external shocks. The high proportion of transitory poverty

found in studies discussed in the Appendix indicates that households around

the poverty line frequently move into and out of poverty, due to changes

both external and internal to their family environment. Poor households

in poor areas commonly suffer from damage to the natural environment,

water losses and soil erosion; a shortage of good quality agricultural land

(for example, in the southwestern rocky mountain and karst areas and

northwest where there is a scarcity of water); a defi ciency in infrastructure,

such as road and water conservancy facilities, and a lack of basic social

services, such as primary education and health care.

The consequences are low agricultural productivity and the

underdevelopment of market relationships in the areas in which the

poor are clustered. Research has shown that there are notable differences

between impoverished families and non-impoverished families in terms

of demographic characteristics, resources, assets and ability. Econometric

analysis has demonstrated that a rural household’s net per capita income

depends negatively on family size, and positively on labor availability within

the household, the education level of the household head, members’ nonagricultural

job experience, the quality of the cultivated land at its disposal

and the productive assets owned by the household (Li and Wang, 1999;

Wang and Li, 2003). In rural areas where grain production, in particular, has

grown most rapidly there is a clear tendency to fi nd the greatest reductions

in rural poverty (Weiss, 2003).