“China’s rural poverty falls but inequality rises”

The Hindu has a report on a new Chinese white paper making this claim- and in this case, it seems likely enough to be true:

The paper, the first released on poverty since 2001, attributed the steep decline to the effectiveness of a series of subsidies for China’s farmers, including the removal of agricultural taxes and a new social security assistance programme. Despite fast-declining rural poverty, the report also warned of new — and, analysts said, harder to address — developmental challenges as a result of increasing inequality between the countryside and cities.

The number of rural poor had declined from 94.22 million in 2000 to 26.88 million in 2010, or 2.8 per cent of the rural population today. Behind the decline, said the paper, were several pro-farmer measures, particularly the abolishing of agricultural taxes in 2006, which was part of a series of rural reforms unveiled during the mid-2000s, shortly after the Hu Jintao-Wen Jiabao administration took over following a decade of rapid, but increasingly uneven, urban-focused growth.

The central government’s spending on agriculture in this time rose from 214.42 billion yuan ($34 billion) in 2003 to 857.97 billion yuan ($136 billion) last year — an annual 22 per cent increase. Much of this spending went to a development programme that targeted 592 of the poorest counties. The programme, said the paper, helped increase farmland by 3.5 million hectares in these counties, as well as renovate and extend roads by 952,000 km.

Some measures which had helped bring growth, such as marketisation, had now left a legacy of rising health and education costs, particularly in rural areas. A urban resident earns more than 3.3 times a rural one in China today, with the Gini income inequality index rising from 30.9 per cent in 1981 to 45.3 per cent in 2003.

Some of those numbers might well be off by a bit, but the notion that rural poverty has continued to decline seems believable.

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Filed under Beijing does a Good Thing, economy

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