By working toward a better understanding of poverty and by tailoring efforts based on a rigorous system of monitoring and evaluation, China lifted more than 600 million people out of poverty between 1981 and 2004. The International Bank for Reconstruction and Development (IBRD) has a long history of working with China on an evolving approach to poverty reduction, with an emphasis on rural and minority populations.
Rapid growth and urbanization have been central to China’s poverty reduction in the past 25 years, as have a number of reforms, including the opening of the economy to global trade and investment. Even as the overall level of poverty has dropped, inequality has increased, and remaining poverty has become concentrated in rural and minority areas.
The government has implemented a series of programs to identify and reach those who have not reaped the full benefits of China’s rapid growth. Prior to 1990, China’s poverty reduction program depended primarily on single-year and single-sector projects that were not capable of overcoming poverty in the worst-affected areas. In addition, the statistical system used to assess where the poor were located was limited.
The government enlisted the IBRD to explore new poverty reduction measures, including improved targeting of programs to the remaining poor. The government also wanted to secure more accurate and timely information to understand the changing distribution of poverty and factors that have restricted the progress of those who have missed out on China’s prosperity.
The Bank’s partnership with China on poverty reduction has involved: 1) pilot projects supported by Bank finance and technical assistance, and 2) evaluation of results and integration of findings into the policymaking process.
In 1992, the Bank and China’s Leading Group for Poverty Reduction co-authored a landmark study to (a) introduce new methodologies to strengthen poverty monitoring; (b) introduce a multi-sector poverty-reduction model focusing on the enhanced mobility of labor; (c) translate results of poverty assessments and demonstration projects into policy options; and (d) develop a long-term approach to poverty reduction.
Two subsequent pilot projects—the Southwest Poverty Reduction Project (SWPRP) and the Qinba Mountains Poverty Reduction Project—introduced a new poverty monitoring system to China, which has now been adopted at the national level and rolled out to all of China’s 592 poor counties.
The pilots provided greater access to off-farm employment opportunities; strengthened health and education services; improved access to safe drinking water, rural roads and other basic infrastructure; and enhanced food security through land improvements and diversification into higher-value crops and animal products.
A 2001 Bank study recommended stronger participatory approaches and targeting projects more directly to the remaining poor, particularly those in remote, ethnic minority communities and the disabled.
The 2005-2010 Poor Rural Communities Development Project, supported by the Bank and the U.K.s Department for International Development (DFID), emphasizes community-driven development. This approach establishes village committees, who approve and evaluate projects, and allows for community control of funds.
The Bank’s partnership with China has contributed to:
- Enhanced understanding of the changing distribution, nature, and causes of rural poverty in China, and increased poverty monitoring capacity. The SWPRP poverty monitoring exercise provided the impetus for China to establish a nationwide poverty monitoring system. Since 1997, China has conducted a national poverty survey that covers all nationally designated poor counties. China now has a solid poverty assessment and mapping capability.
- Informed public policymaking. As a result of the two pilot projects, the Chinese government adopted a multi-sector approach in its poverty reduction program, and integrated components on labor mobility and community participation .The government formally shifted from county- to village-based poverty targeting, designating 148,000 poor villages.
The four main Bank-supported poverty reduction projects (including the Gansu and Inner Mongolia Poverty Reduction Project) have reached approximately 8 million beneficiaries to date. Using the poverty standard of $1.25 per person per day, the incidence of poverty in China declined from 85 percent in 1981 to 27 percent in 2004, a reduction of slightly more than 600 million people.
Toward the Future
The Chinese government and the Bank are currently preparing a Sustainable Development in Poor Areas Project. The project will pilot new ways to provide poverty reduction assistance to the poorest communities by enabling communities to select and implement initiatives themselves. Co-financed by the Global Environment Fund, it will also address potential climate change risks and land degradation.
Chinese government partners include the Leading Group for Poverty Reduction, the National Bureau of Statistics, and provincial and local governments. International partners include the Department for International Development (UK), United Nations Development Programme, Ford Foundation, Consultative Group to Assist the Poorest, Handicap International, Canadian International Development Agency, Global Environment Fund, Care Australia, and the China Foundation for Poverty Alleviation.