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Special> NPC & CPPCC Sessions 2011> In-depth> Hot Topics
UPDATED: January 10, 2011 NO. 2 JANUARY 13, 2011
Redrawing the Poverty Line
A new threshold means more than 100 million impoverished people will be eligible for government assistance as China continues to battle poverty

STRONG SUPPORT: Workers with the China Foundation for Poverty Alleviation distribute charity goods to villagers in Jiegu County of Qinghai Province in June 2010. Since 2000, the Central Government has adopted a series of vigorous measures to promote the development of China's poverty-stricken areas and population (WU GUANGYU)

The Chinese Government has decided to set the nation's poverty line at an annual per-capita net income of 1,500 yuan ($226) starting this year. The new threshold is an increase of 25 percent over the 2008 and 2009 standard of 1,196 yuan ($180.7). This proposal will have to be approved by the National People's Congress, the top legislature, when it convenes for its annual session in March.

Raising the poverty standard will increase the number of people below the poverty line dramatically to 100 million from 36 million. It will also increase the government's financial pressure since China's capital input in poverty alleviation mainly relies on the financial expenditures of the Central Government and local governments at various levels.

At the same time, shifting the poverty line will create more space for further economic growth. As a result of various forms of assistance and findings in poverty alleviation, enormous consuming potentiality will be freed, which will vigorously promote economic growth.

This year, China will launch pilot comprehensive administration programs in poverty-stricken areas, and a series of public welfare projects in education, public health, culture, employment and social security will be carried out to tackle the bottleneck problem handicapping the development of poverty-stricken areas, said Fan Xiaojian, Director of the State Council Leading Group on Poverty Alleviation and Development at a national poverty reduction conference on December 21, 2010.

Right timing

China's poverty line has long been considered dismally low, especially when considering the country's burgeoning economic development and rising price index. Last year, China's GDP scored a record high of 37 trillion yuan ($5.59 trillion), 40 times that of 1985, but the country's poverty threshold has increased disproportionately to say the least. From 1985 to 1990 China's GDP increased 107 percent, but the poverty line only rose 60 percent, from 200 yuan ($30) to 320 yuan ($48.3); from 1990 to 2003, GDP increased 627 percent, but the poverty line only rose 99 percent; and from 2003 to 2009, GDP rose 172 percent, with the poverty line lagging behind at 87 percent.

China's fiscal revenue also saw unbalanced development: Last year's total was 38.9 times that of 1985, 7.8 times faster than the growth rate of the poverty line during the same period.

According to a research report from the Beijing-based Anbound Consulting Group, China should increase its poverty line in accordance with its economic indicators. "The ultimate goal of economic development is to ensure happier, more respectable lives for average people rather than simply pursuing GDP data that are pleasant to the ears," the report stated.

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