Growing out of Poverty

The role that economic growth has had on poverty reduction in China should not be underestimated. It surpasses any effect from government policy.

This recent paper is a useful addition to the literature.

Growing out of Poverty: Trends and Patterns of Urban Poverty in China 1988–2002

Simon Appletona, Lina Songa and Qingjie Xiab

a University of Nottingham, Nottingham, UK

b Peking University, Beijing, China
Accepted 6 November 2009.
Available online 17 December 2009.

Summary

This paper estimates trends in absolute poverty in urban China using the Chinese Household Income Project surveys. Poverty incidence curves are plotted, showing lower poverty in 2002 than in 1988 irrespective of the poverty line chosen. Incomes of the poorest fell during 1988–95, contributing to a rise in inequality. However, inequality has been fairly constant thereafter. Models of the determination of income and poverty reveal widening differentials by education, sex, and Communist Party membership. Income from government anti-poverty programs has little impact on poverty, which has fallen almost entirely due to overall economic growth rather than redistribution.

Key words: poverty; inequality; economic growth; welfare; Asia; China

This DVD provides a real life backdrop to this academic article.

Sacrificing her education to earn money for her family, and suffering drudgery, loneliness and displacement, Li Jieli must leave her rural Chinese home to work in a far-away factory where she is only a number. Li's story gives us a look behind the factory gates. Will her job provide her a basis for growth and personal fulfillment? She has only been back home once in the last three years. In the depressed Iron Range of Minnesota, Wayne Peterson and David Olson are also forced to make difficult choices to survive in a job market impacted by global trade. The local iron mine had shut down due to high labor costs but has recently reopened because of demand for iron from China. Pensions and benefits from the previous owners are gone. Questions of corporate responsibility in both countries come into play as Wayne and David must decide about where their security lies in a shifting global economy.

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