New Progress in Development-oriented Poverty Reduction Program for Rural China

Information Office of the State Council The People's Republic of China

November 2011, Beijing

Contents

Foreword

I. Development-oriented Poverty Reduction Policies and Their Implementation

II. Achievements of the Development-oriented Poverty Reduction Program

III. Special Poverty Reduction Programs

IV. Poverty Reduction by Industries

V. Social Involvement in Poverty Reduction

VI. International Cooperation

Concluding Remarks

Foreword

Poverty is a challenge facing all countries and the international community as a whole. To promote development, eliminate poverty and achieve common prosperity is an ideal that humanity constantly pursues.

China is a developing country with the largest population in the world, featuring a poor economic foundation and noticeable unbalanced development. In particular, it has a large poverty-stricken population in the rural areas, rendering the mission to reduce poverty particularly difficult. For this reason, China' s poverty reduction program is, to a large extent, nothing but solving the poverty problem in the rural areas.

The Chinese government has always made poverty reduction an important goal and task of national development, adhered to the principle of putting people first, and worked hard to enable all the people to enjoy the fruits of economic and social development. It was in the mid-1980s that the Chinese government started the development-oriented poverty reduction program in the rural areas in an organized and planned way. It formulated and implemented the Seven-year Priority Poverty Reduction Program (1994-2000), the Outline for Poverty Reduction and Development of China's Rural Areas (2001-2010), and the Outline for Development-oriented Poverty Reduction for China's Rural Areas (2011-2020), and a few other poverty reduction plans, making poverty reduction a common aim and action of the whole society. China's development-oriented poverty reduction program in the rural areas has promoted social harmony and stability, fairness and justice, and made contributions to the development and progress of the country's cause of human rights.

Poverty reduction is a common cause of the entire human society, and China's development-oriented poverty reduction program is an important component of the world's poverty reduction efforts. China has realized, ahead of schedule, the goal of cutting the poverty-stricken population by half, as listed in the United Nations Millennium Development Goals, thus making great contributions to the world's poverty reduction efforts.

In 2001, the Chinese government issued a white paper titled The Development-oriented Poverty Reduction Program for Rural China. Here, this new white paper is an account of the progress of this program over the past decade.

I. Development-oriented Poverty Reduction Policies and Their Implementation

In the past decade, the national economy of China grew rapidly and steadily, and the overall national strength grew constantly. During this period, the Chinese government incorporated development-oriented poverty reduction into its overall plan for national economic and social development, formulated and implemented policies and measures conducive to the development of poverty-stricken rural areas, made poverty reduction a priority in public finance budgeting, and poor areas key recipients of public finance support, continuously increased support to poor areas and earnestly enhanced ability in the implementation of poverty-reduction policies.

Rural policies. China is traditionally an agricultural country with a large rural population and a great number of people in dire poverty. The implementation of rural policies conducive to rural poverty reduction is thus extremely important for eliminating poverty in rural China. In the past decade, the Chinese government carried out the strategy of coordinating urban and rural economic and social development, and the principles of industry nurturing agriculture, urban areas supporting rural areas and "giving more, taking less and loosening control" to promote the comprehensive development of rural economy and society to benefit all poor areas and all rural poor. The government successively abolished the animal husbandry tax, pig slaughtering tax, and tax on agricultural and forestry specialties. Then, it abolished the agriculture tax and wrote it in the law, and this is of particular significance as it made rural people in China bid final farewell to the payment of agriculture tax that had existed in China for over 2,600 years. The government issued subsidies directly to grain growers, subsidies for purchasing fine seeds and agricultural machinery and tools and general subsidies for purchasing agricultural supplies; gradually established and improved the social security system for rural China, and pushed forward the construction of infrastructure related to drinking water, electricity, road and methane, along with the renovation of dilapidated rural housing. The system of collective forest rights was reformed to make farmers real contractors of forested land and real owners of trees in the forests, various preferential policies were implemented to develop the forest economy and forest tourism to increase the farmers' incomes. The government kept increasing investment into measures that strengthen agriculture and measures that bring benefits to the farmers and increase their incomes, as well as the development-oriented poverty reduction program. The outlays of the central finance on agriculture, the countryside and farmers increased from 214.42 billion yuan in 2003 to 857.97 billion yuan in 2010, representing an annual increase of 21.9 percent on average, indicating that the public finance is quickening the pace of supporting the countryside. Some state policies that strengthen agriculture and benefit farmers and increase their incomes were first carried out in impoverished areas. Of them, some policies were first carried out in key counties in the national development-oriented poverty reduction programs, and these policies included the pilot project to abolish the agriculture tax, the policy to exempt rural students in compulsory education from poor families from paying tuition and miscellaneous fees, and to provide living subsides for boarders, and the policy to reduce or cancel the required supporting funds to be supplied by local governments at and below the county level for the new public-welfare infrastructure projects listed in national plans. Poor areas and poor people were given top priority in the implementation of some policies that strengthen agriculture and benefit farmers. The central government gave considerable financial support to central and western regions in terms of subsistence allowances for rural residents, new cooperative medical care and new social endowment insurance for rural residents. In 2010, the civil affairs departments paid a total of 1.4 billion yuan in subsidies to 46.154 million people in the new rural cooperative medical care scheme, or an average of 30.3 yuan per person.

Regional policies. At the end of the 20th century, the Chinese government started to carry out the strategy of large-scale development of the western region. Compared to other regions of China, Western China has rather adverse natural conditions, underdeveloped infrastructure and a larger population of the poor. In the last decade, water conservancy projects, projects of returning cultivated land to forests and projects of resource exploitation, as planned in the strategy of developing the western region, were launched first in poverty-stricken areas, if all other conditions were equal; highways were extended to poor areas at a quicker pace to link up the county seats of poor areas with national and provincial trunklines; the labor force of poor areas was given preference in infrastructure construction projects to increase the cash income of the poor. The government worked out and implemented a series of policies for regional development to promote economic and social development in Tibet and Tibetan-inhabited areas in Sichuan, Yunnan, Gansu and Qinghai provinces, as well as in Xinjiang, Guangxi, Chongqing, Ningxia, Gansu, Inner Mongolia and Yunnan, and pushed forward the development-oriented poverty reduction program as a policy priority.

Rural social security system. To provide basic social security for the poverty-stricken population is the most fundamental way to steadily solve the problem of adequate food and clothing for such people. In 2007, the state decided to establish a rural subsistence allowance system throughout the rural areas that would cover all rural residents whose per-capita annual net household income was below the prescribed standard, so as to solve the problem of adequate food and clothing for the rural poor in a stable, lasting and effective way. The standards of rural subsistence allowance were determined by local governments above the county level on the basis of the fees needed for such basic necessities as food, clothing, water, electricity and other things throughout the year. By the end of 2010, the system covered 25.287 million rural households, totaling 52.14 million people. In 2010, a total of 44.5 billion yuan of rural subsistence allowance was issued, including 26.9 billion yuan of subsidy funds from the central government. The average standard for rural subsistence allowance is 117 yuan per person per month, and the average subsidy is 74 yuan per person per month. The state provides the five guaranteed forms of support (food, clothing, housing, medical care and burial expenses) for old, weak, orphaned, widowed or disabled rural residents who are unable to work and have no family support. During the decade, the government gradually turned these five forms of support from a collective welfare system into a modern social security system financed by the state instead of by the rural people themselves. By the end of 2010, the five forms of support had been extended to 5.34 million rural households totaling 5.563 million rural residents and basically covering almost all eligible rural residents. The public finances at all levels altogether granted 9.64 billion yuan to eligible rural residents for such support. In 2009, the state launched a pilot scheme of a new type of social endowment insurance for rural residents in some places. By July 2011, the scheme had extended to 60 percent of rural China, covering 493 key counties in the national development-oriented poverty reduction programs, accounting for 83 percent of such counties. Under this new type of social endowment insurance for rural residents, the funds needed are pooled from personal contributions, collective grants and government subsidies, and the pensions are paid from the basic funds and personal accounts; the central finance subsidizes central and western China all the basic funds for old-age pensions in line with the standards decided by the central government, and subsidizes 50 percent of such funds for eastern China. In 2010, the central finance provided a total subsidy of 11.1 billion yuan for the basic old-age pension funds of the new social en-dowment insurance for rural residents, while the local finances supplied 11.6 billion yuan for the same purpose. In 2004, the state introduced a standard minimum wage system, which has played a positive role in guaranteeing the rights and interests of laborers, mainly migrant workers from rural areas, with respect to remuneration for their labor.

Better implementation of poverty reduction policies. The success of a policy lies in its implementation. The Chinese government regards the establishment of a job-responsibility system, strengthening of the contingent of cadres and building of relevant institutions as the key to the implementation of poverty reduction policies, and has taken effective measures to ensure the implementation of the policies. The central government has raised a requirement that "provincial governments take the overall responsibility and county governments are responsible for the implementation to ensure that poverty reduction staff go down to the villages and the policies reach every household." In accordance with this requirement, provincial governments shoulder the responsibilities, take the tasks, receive funds and exercise the power; governments of key counties covered in the national development-oriented poverty reduction programs take poverty reduction as a central task, and are responsible for implementing the relevant policies and measures in every poor village and poor household. A responsibility system is established for top leaders of local Party committees and governments in the poverty reduction work, and the results of this work are taken as an important criterion for checking and evaluating their performance in their official career. To strengthen the building of the contingent of cadres in poor areas, the Chinese government has incorporated the training of county-level cadres and cadres from poverty reduction departments above the county level in poor areas into the program of Party and government cadre training, and strengthened and improved the contingent of cadres in poor areas by such means as appointing them to temporary posts or exchange of posts. The government has strengthened statistics collection related to and supervision over poverty reduction work to provide reliable data for scientific decision-making. The state has strengthened organizational building at the primary level in poor areas, worked hard to improve the ideology and work style of cadres at the primary level, and taken comprehensive measures to maintain law and order to maintain social stability in these areas. The state has enhanced poverty reduction working organizations at all levels, ensured their personnel stability, improved their conditions and qualities, and enhanced the organization, leadership, coordination and management of the poverty reduction work. Relevant departments under the State Council regard poverty reduction as an important task and conscientiously implement the poverty reduction policies in line with their corresponding functions and powers.

China' s development-oriented poverty reduction policies display the following characteristics:

Combining development-oriented poverty reduction with social security. By means of these policies, the state guides poor areas and people in poverty to, in line with market-oriented objective, adjust the local economic structure, exploit local resources, develop commodity production, and improve their capability of self-accumulation and self-development. The state also lays stress on comprehensive exploitation and overall development in order to promote local infrastructure construction and balanced economic and social development. The state also pays attention to sustainable development, strengthens resource conservation and ecological construction, and controls the rapid growth of the population. The state promotes equal share of basic public services between the urban and rural areas, establishes and improves the system of subsistence allowance in rural areas, gradually raises the level of the five forms of support, constantly improves the emergency-response and relief system in case of natural disasters, establishes the new type of cooperative medical care for rural residents, and introduces pilot projects in the new rural social endowment system for rural residents, so as to provide basic living guarantees for the poor. In the key counties covered in the national development-oriented poverty reduction programs, the state launches pilot projects to integrate development-oriented poverty reduction policies with the system of subsistence allowance for rural residents, endeavoring to extend the related policies to all the rural poor.

Combining special poverty reduction actions with industrial and social efforts. Targeting the poverty-stricken people and areas, taking special poverty reduction funds from the public finances as the main source and aiming at subsistence and development of the poor population, the state works out special programs for development-oriented poverty reduction and carries them out on a yearly basis. The state gives full play to the functions and responsibilities of the various industrial departments, makes poor areas the top priority for each industry's and department's development, and works hard to promote the development of water conservancy, transportation, electricity, land resources, education, health care, science and technology, culture, family planning and some other undertakings in poor areas. The state mobilizes and organizes all sectors of society to give various forms of support to poor areas in their development. Party and government departments, enterprises and public institutions give special support to designated poor areas, eastern and western China cooperate to reduce poverty, the army and armed police give their support, and all sectors of society participate in this program -- a poverty reduction model with Chinese characteristics, which helps poor areas to develop and poor farmers to increase their incomes.

Combining outside support with self-reliance. By way of special poverty reduction funds, transfer payments from the central finance, projects undertaken by various departments, social donations and introduction and utilization of foreign capital, the financial input to poor areas has been continuously increased. Constant exploration in establishing various poverty reduction models, such as participatory and integrated village development, small-sum loaning, and mutual aid funds among poor villages. Respect is shown to the principal role of the local cadres and masses in development-oriented poverty reduction for poor rural areas, and extensive efforts are made to bring into play their initiative, enthusiasm and creativity. The cadres and masses exert themselves constantly, and they do not wait for or depend on outside support, but work hard, take an active part in decision-making, and make every effort to lift their localities and themselves out of poverty and backwardness.

II. Achievements of the Development-oriented Poverty Reduction Program

Thanks to efforts made over the past decade, the problems of subsistence, food and clothing for China' s rural residents have been basically solved, the production and living conditions of the poor have been markedly improved, infrastructure in poor areas has continuously improved, the level of social development has been enhanced, and ecological degradation has been initially brought under control.

The problems of subsistence, food and clothing for rural residents have been basically solved. In line with the increase of economic and social development level and based on the changes in price index, the state gradually raised the national poverty line for rural residents from 865 yuan in 2000 to 1,274 yuan in 2010. Based on this change, the poverty-stricken rural population decreased from 94.22 million at the end of 2000 to 26.88 million at the end of 2010; and their proportion in the total rural population decreased from 10.2 percent in 2000 to 2.8 percent in 2010.

Economy in poor areas has developed in an all-round way. The industrial structure in poor areas has been further optimized; specialty and competitive industries developed rapidly, and the comprehensive economic strength of poor counties grew constantly. From 2001 to 2010, 592 key counties in the national development-oriented poverty reduction programs have seen their per-capita gross regional product grow from 2,658 yuan to 11,170 yuan -- an average annual growth of 17 percent, and per-capita local budgetary revenue grow from 123 yuan to 559 yuan - an average annual growth of 18.3 percent. The per-capita net income of farmers has grown from 1,276 yuan in 2001 to 3,273 yuan in 2010, an average annual increase of 11 percent (not taking inflation into account). All these figures of growth are all higher than the national average.

Production and living conditions in poor areas have been greatly improved. The state has constantly increased investment in infrastructure construction in poor areas to improve production and living conditions there. From 2002 to 2010, 592 key counties in the national development-oriented poverty reduction programs saw their basic farmland increased by 52.456 million mu (approximately 3,497,067 ha), the mileage of newly constructed, renovated and extended roads by 952,000 km, and their buildings for education and health care by 35.061 million sq m, in addition to the solution of drinking-water problem for 56.757 million people and 49.993 million head of livestock. By the end of 2010, in the key counties in the national development-oriented poverty reduction programs, 60.9 percent of rural households had access to tap water or well water, 88.1 percent of villages had access to roads, 98 percent had access to electricity, and 92.9 percent had access to telephones. In addition, their per-capita housing space reached 24.9 sq m, and 88.4 percent of the rural households had hygienic latrines.

Social undertakings in poor areas have made constant progress. Compulsory education in rural areas has been strengthened, and the work to eliminate illiteracy among young and middle-aged people has made great headway. By the end of 2010, in the key counties in the national development-oriented poverty reduction programs, 97.7 percent of children aged between 7 and 15 were enrolled in school, close to the national average level; the illiteracy rate of young and middle-aged people had decreased to 7 percent, 5.4 percentage points lower than in 2002; and the average schooling time for the young and middle-aged had reached eight years. In addition, the new type of cooperative medical care system for rural residents had covered all the rural population, and the primary-level medical and health service system had been improved. By the end of 2010, in the key counties in the national development-oriented poverty reduction programs, 93.3 percent of rural households had participated in the new cooperative medical care system, and 91.4 percent of rural residents were able to get timely medical service; every township had a hospital, and most administrative villages had a clinic. Population and family planning work, and the building of a public cultural service system in poor areas were strengthened.

Ecological degradation has been brought under initial control. From 2002 to 2010, in the key counties in the national development-oriented poverty reduction programs 149.235 million mu (or 9.949 million ha) of farmland was restored to forest or grassland, and 226.434 million mu (or 15.0956 million ha) of economic forest was planted. In these counties, the proportion of households whose drinking water sources were polluted decreased from 15.5 percent in 2002 to 5.1 percent in 2010, and that of households having difficulty in getting fuel decreased from 45 percent to 31.4 percent.