Poverty in China: Gone, but (not) forgotten?

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By Flickr user trey.menefee

The news that India is to keep receiving aid from the UK over the next four years was one of the more controversial outcomes of DFID’s Bilateral Aid Review, with a range of criticism from the slightly hysterical to the more thoughtful (though CAFOD, and most other NGOs, supported continuing to give aid to India.) Perhaps unsurprisingly in these straitened times there was much less media focus on any of the 16 countries, such as China, that will no longer receive any support from DFID.

Which is a shame, because this ignores the enormous success some countries have had in reducing poverty. A recent report by Laurence Chandy and Geoffrey Gertz from the Brookings Institution argues that income poverty in China could all but disappear by 2015. Their figures suggest that by 2015 only 0.3% of the Chinese population will be living on less than $1.25 dollars a day. This would mean that between 2010 and 2015 50.1 million Chinese people would lift themselves out of income poverty, potentially bringing the total reduction in Chinese citizens living on $1.25 a day since 2000 to 203.3 million, second only to India in the poverty reduction stakes for this period.

They have a pretty startling visual representation of China’s falling share of global poverty (according to their predictions):

Chandy and Gertz have arrived at their figures by taking World Bank household survey data and developing poverty estimates using historical and forecast per capita consumption growth figures. As the authors themselves acknowledge, their method is not without problems; for example they have had to assume that the income distribution in each country remains the same.

The World Bank itself has arrived at quite different figures, and estimates that poverty in China in 2015 will stand substantially higher at 5.9% of the population. Making predictions is a dangerous game, and whether Chandy and Gertz are right that income poverty in China will “effectively” disappear by 2015 remains to be seen, but they rightly raise the need to for accurate and, crucially, current statistics and argue that one priority for policy makers should be to build the capacity of domestic statistic agencies and to encourage the World Bank to produce global poverty estimates annually rather than every 3-4 years as they do now.

Of course, even assuming the figures are correct, 0.3% of China’s population is still a huge figure, over 40 million people, all of whom would be living on less than $1.25 a day. Nor are China’s development challenges solely based on poverty reduction; the environment, education, and growing income inequality are all concerns. But despite these problems, China’s economic growth and poverty reduction have been phenomenal and it is a great shame that much of the discussion around the Bilateral Aid Review in the UK seemed to focus  on whether aid should still be going to India, rather than celebrating the fact that one day, far off in the future, we might live in a world where the need for aid itself has been eliminated.

Blog entry by Robert Young

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