Xi’s signature ‘three sieges’ dominate domestic policy. The bar has been set low on poverty alleviation, offering a quick ‘win’ ahead of more difficult wars to clean up the environment and rein in debt.

This is the first in a three-part series on Xi’s three sieges. Forthcoming signals will cover the sieges on debt and pollution.

Xi Jinping sees ending poverty in China as a major test of socialist policy—and one he takes a great interest in supervising. Set at the low level of 2,300 per person per year, China’s poverty line is some 50 percent lower than the World Bank’s widely-used definition of extreme poverty. Pledging to raise the remaining rural poor up to this poverty line by 2020, Xi has made the campaign a whole-of-government priority. Those targeted are largely in rural, often remote, areas. When it is too difficult to bring services to people, people are instead being relocated to where the services are. Planning has also begun for post-2020 policies to take on what is called ‘relative poverty’, covering people above the current poverty line. Meanwhile, some scholars wonder whether the gains forecast under the new strategy will prove sustainable.

China confident it will win current poverty battle by 2020

2020 was established as a key date in poverty alleviation policy in 2011, as part of a Central Committee–State Council plan on rural poverty. The targets and terms have been revised several times. Though poverty alleviation has been a central government priority since 1986, Xi has a special commitment to it, in 2015 listing it one of the ‘three sieges’ that define his vision.

Xi has visited what official media refers to as ‘deep poverty areas’ [深度贫困地区] over 30 times since assuming office in 2012. Official biography stresses Xi’s empathy with poor peasants as a sent-down youth in Shaanxi during the Cultural Revolution. His thought and practice on poverty alleviation count as an important part of ‘socialist thought with Chinese characteristics’, the sinified Marxism celebrated at the national level this year.

shape of the plan

The State Council released a 5-year plan for poverty alleviation in 2016. The strategy is to

  • further develop rural industry
  • shift labour to areas in most need
  • relocate those living where poverty remains intractable
  • develop educational resources
  • ensure social welfare system covers all people in need

The 2020 target is now based on a poverty line of 2,300 a year per person (about USD 0.95 per day), set in 2013. This is nearly 50 percent less than the World Bank’s USD 1.90 per day definition of ‘extreme poverty’ (about 4,500 per year).

Officials report that this effort is on track for success. Liu Yongfu 刘永富 State Council Leading Group for Poverty Alleviation and Development office director told a March 2018 press conference that

  • 68.5 million people moved out of poverty from 2012-17
  • the remaining 30.4 million will move above the poverty line by 2020, with subsequent efforts focused on higher income levels

entire state mobilising to reach 2020 goal

Though policymakers expect to hit 2020 targets, inter-agency and centre–local cooperation will be needed to cross the final hurdle. Resources are being mobilised across government. The newly upgraded Ministry of Agriculture and Rural Affairs (MARA) has gained authority and budget for work on improving infrastructure and developing rural industry. The Ministry of Housing and Urban–Rural Development is tasked with renovating rural housing for the poor, the National Health Commission (formerly National Health and Family Planning Commission) is assigned to address high healthcare costs, while the Ministry of Education is to provide funds for children in all families recognised as poor. Party secretaries and governors at province level have been made directly responsible for poverty alleviation. Results are to figure prominently in rating their performance. Eight high-level officials in four provinces were warned about shortcomings in poverty work in 2017. Despite local government complaints, the centre has continued to add new evaluation mechanisms.

A final push from the centre is in the pipeline. The Politburo discussed ‘Guiding opinions on the three-year campaign to succeed in poverty alleviation’ on 31 May 2018, a document that when published will guide Party cadres and government officials in meeting the 2020 deadline.

plans to relocate 9.8 million people

Concluding that some areas are too challenging to develop, policy-makers plan to relocate 9.8 million poor people between 2016-20. (Some six million more are to be relocated for other reasons during the same period). Roughly 5.9 million people were relocated in 2016-17; the state targets relocation of 2.8 million more in 2018. Where geography is the fundamental cause of poverty, says Liu Yongfu, people have to move whatever the cost.

The 2016 13th 5-year plan for relocation targets a number of categories, namely

  • 3.4 million people living where it is too expensive to provide basic public services
  • 3.16 million living in resource-poor areas
  • 1.57 million living in national reserve areas
  • one million living in geological hazard zones

Moving people out of these places is a first step, and authorities warn that follow-up is essential. Building housing is relatively easy, says Premier Li Keqiang, arguing the state must also ensure employment and sustainable income after relocation. Factory jobs and other low-skilled work have been good choices for new urban residents: the most successful relocations have been in regions near industrial zones or economically advanced areas. Though recently relocated people who remain unemployed are provided with training programs, these have been less effective than expected, says a 2018 report from Guizhou Academy of Social Sciences, further noting that local governments in some cases fail to provide education and medical services to relocated people.

policy has spillover effects beyond poorest areas

Data from a State Council March conference shows that in 2017, per capita disposable income in designated poor areas increased 50 percent over 2013. Further,

  • 98.2 percent of villages now have phone access
  • 91.4 percent of villages now have a healthcare centre
  • 77.9 percent of roads have been resurfaced or hardened
  • 67.6 percent have access to tap-water systems

But poverty alleviation has effects that extend well beyond the people and regions directly targeted. State support for solutions to poverty is attracting private players to the space. In 2016 the China Securities and Exchange Commission expedited approval processes and encouraged financial institutions to support investments, M&As and IPOs of firms based in less developed regions. Banks and insurance companies have responded, with nearly a trillion RMB in financing flowing into poor regions that year alone. Rural informatisation and e-commerce, promoted to connect poor regions with more resources and larger markets, is also paying dividends. Driven by investments from Alibaba and JD.com, the rural online retail market reached 1.25 trillion in 2017 and agricultural product e-commerce sales exceeded 300 bn, employing an estimated 28 million people, according to MARA data. These markets are growing rapidly—rural e-commerce sales grew over 38 percent in 2017, and sales originating in central and western China rose nearly 52 percent. Rural e-commerce pilots in officially designated impoverished areas generated over 45bn in sales and grew at over 60 percent last year.

As rich coastal areas pitch in to help with the national goal, the metropolitan east is also affected. Beijing now pairs each eastern province with a western one, encouraging industrial investment and professionals to flow from east to west and cheaper labour to migrate from west to east. Farmland swaps, in which major cities buy urbanisation quotas from underdeveloped areas, allow poor areas to earn money from distant urbanisation. Beijing had restricted these swaps to within provinces, but a March 2018 State Council policy loosened the rules so that some local governments could explore swaps with remote regions.

scholars question 2020 targets

Some see the 2020 goal of lifting people beyond a 2,300 poverty line as misguided. Eliminating poverty according to the existing standard is inadequate, says Li Xiaoyun 李小云 China Agricultural University professor. What matters, he says, is people’s satisfaction. The state, he insists, should adopt a qualitative metric, such as ‘secure access to food, clothing, compulsory education, basic healthcare and housing’, as listed in ‘Rural area poverty alleviation outline 2011-20’.

Quantitative targets have led to unsustainable practices that fiddle the figures, warns Wang Sangui 汪三贵 Renmin University. Some cadres, he reports, simply give livestock to peasants to sell, generating an immediate income rise but no long-term benefit. Only the development of industry and employment will lead to lasting results, he argues. A 2017 report from the Chinese Academy of Social Sciences found that many farmers whose income rises above the poverty line later fall back below it.

planning has begun for post-2020 goals

Planning for work after 2020 has already started, says Chen Zhigang 陈志刚 vice director for the State Council leading group on Poverty Alleviation and Development. China will move

  • from eliminating absolute poverty to alleviating relative poverty
  • from focusing on increasing income of poor residents to multidimensional solutions
  • from a focus on rural areas to both rural and urban areas

The term ‘relative poverty’ is clearly associated with post-2020 planning, but policymakers have not offered a definition. Relative poverty will linger long after 2020, says Liu Yongfu. New poverty alleviation policies will be rolled out as poverty under the current definition becomes less pressing.

Further detail on Xi’s long-term approach to poverty alleviation is to be expected in the pending 5-year plan for rural revitalisation, and policy may change further as officials receive feedback about current initiatives and experiments. A May 2018 Politburo session declared poverty alleviation had ‘lain a good foundation for carrying out the rural revitalisation strategy’. MARA development programs, often targeted at poor areas, influence whole regions; including efforts to promote industrialised agricultural product processing, e-commerce, rural tourism, manufacturing and photovoltaic power station programs.

Success in ending deep poverty will not mean that a huge cohort of the indigent will suddenly become urban consumers or major players in the national economy; that goal is likely another generation away. Still, a victory in this battle will also be a triumph for Xi, and a success for his program of instilling self-confidence in socialism.


who is moving the agenda?

Liu Yongfu 刘永富 | State Council Leading Group for Poverty Alleviation and Development Office director and party secretary

Office director of the former Ministry of Labour and Social Security 1998-2007 and Gansu vice governor 2007-13, Liu took up his current position in 2013, leading anti-poverty policy. Liu serves as the public face of the leading group, routinely joining State Council press conferences. He promises real, sustainable poverty alleviation. Answering criticism that some local governments ‘alleviate poverty by numbers’ without following up on tangible outcomes, Liu personally guaranteed real change not only for individuals, but also for poor villages and counties. He says that the rural poor and areas recognised as impoverished will continue to receive policy support even after poverty is eradicated.

Li Xiaoyun 李小云 | China Agricultural University College of Humanities and Development professor

Li advises the State Council leading group on poverty alleviation and development. With experience in rural development issues in the public sector, Chinese and European universities, and NGOs, Li urges the state to focus on ‘truly poor areas, truly poor people and truly sustainable measures’. Current policy support aimed at developing industries to benefit the poor has resulted in overcapacity in basic agricultural production and entrenched the high costs of small-scale farming. Instead, Li argues, resources should be shifted to support production of competitive, distinctive and innovative products based on existing rural industries.

Li Daiqing 李黛青 Chinese Academy of Sciences Research Centre for Eco-Environmental Sciences environmental evaluation department vice director

Poverty alleviation should be keyed to the natural and social ecosystems of poor areas, argues Li. The poor tend to live in ecologically fragile regions with high occurrences of natural disasters, she notes. Therefore, any poverty alleviation initiative should be combined with ecological remediation work, such as reforestation of farmland. The state should carefully tailor policy support to rural industries, logistics and markets, Li says, in order to manage financial risk and ensure rural residents are actively included in industry rather than merely aid recipients.


context

1 jun 2018: Politburo discusses plans for rural revitalisation and poverty alleviation, announcing that three-year plan will be released soon

28 may 2018: State Council announces ‘Poverty alleviation funds performance management measures’ to ensure effective use of funds

23 may 2018: State Council Leading Group Office of Poverty Alleviation and Development announces it has begun research on post-2020 poverty alleviation work

26 mar 2018: State Council general office publishes ‘Inter-province farmland replenishment management measures’ and ‘Inter-province construction land quota adjustment management measures’ allowing inter-province farmland swaps and earmarking funds for poverty alleviation

20 apr 2017: National Health and Family Planning Commission and five other ministries jointly issue ‘“Three batches” poverty alleviation through medical treatment action plan’

18 dec 2016: Central Economic Work Conference highlights poverty alleviation

2 dec 2016: State Council issues the ‘13th 5-year plan for poverty alleviation’ aiming to double rural income per capita in poor areas from 2010 to 2020

29 nov 2015: CCCPC and State Council release ‘Decisions on winning the poverty alleviation battle’

3 nov 2013: Xi Jinping first uses phrase ‘targeted poverty alleviation’ in Hunan province

1 nov 2011: CCCPC and State Council publish ‘China poverty alleviation and development outlines for rural areas (2011-20)’


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