Poverty in China

China is the fourth largest country in the world and home to more than 1.3 billion people. It is an immense expanse that includes vast seacoasts, fertile plains and valleys, rugged mountains and windswept deserts.

Since the start of far-reaching economic reforms in the late 1970s, China has witnessed unparalleled economic growth that has fueled a remarkable increase in per capita income and a decline in poverty. The economy, which has since become the second largest in the world, has performed well in recent years, even against the backdrop of the worldwide financial crisis and soaring food prices.

China is the first developing country to achieve the United Nations Millennium Development Goal of reducing by half the number of its people living in extreme poverty and hunger. Its reform-driven economic growth, together with a well-funded national poverty reduction programme, has brought about a major reduction in rural poverty.

But despite its remarkable progress in economic and social development and poverty reduction, China still faces many challenges to reduce residual poverty. Disparities in income among provinces and between urban and rural areas have been widening. Urban incomes are now more than three times higher than rural incomes, and poverty remains primarily a rural phenomenon.

Between 50 and 55 per cent of the population resides in rural areas, where about two-thirds of the population is engaged in farming, forestry, animal husbandry and fishing. About 40 per cent of total employment in China is in rural areas. The poorest rural households tend to derive a large share of their income from agricultural activities, which often show low levels of productivity and net profits.

The most vulnerable groups in rural parts of China are women, children and the elderly, as well as ethnic minorities who live in remote mountainous areas. The increasing migration of rural male laborers to urban and eastern coastal areas has sharply extended the minimization of rural labor and agriculture.

Economic growth has been more rapid in the eastern provinces than in the west. About 40 per cent of China's poor people live in its seven autonomous regions and provinces. These areas are mostly situated in the central and western parts of the country, where the poverty incidence in 2008 was 11 per cent, compared with the national average of 4.2 per cent.

The main causes and characteristics of rural poverty vary in the different provinces and autonomous regions. In general, they include:

• Increasingly frequent natural calamities, especially floods and droughts, caused by extreme weather conditions that are associated with climate change
• Remote locations with poor community infrastructure and services, such as paved roads, markets and safe drinking water
• Depleted natural resources and decreasing farm sizes
• Lack of skills and capacity, and a disproportionate incidence of illiteracy and poor skills among women
• Limited access to inputs, financial services, markets and value chains
• Reliance on traditional farming techniques.