China’s war on poverty is in danger of turning into a war on the poor.
At China’s 19th Communist Party Congress in October, President Xi Jinping renewed a lofty pledge to lift 70 million people out of poverty by 2020.
That’s a worthy goal in a country where over 43 million people still live on less than 2,300 yuan (S$470) a year, the poverty line set by the government. Roughly 40 per cent of the population, some 500 million people, get by on less than US$5.50 (S$7.30) a day.
But that effort relies heavily on an opaque, arcane and already overburdened social benefits system that is likely to buckle under the strain – and on policies that may leave poor Chinese worse off than before.
Mr Xi’s pledge is an extension of the government’s effort, starting in 2012, to move 100 million rural residents into the cities by 2020. Officials believe that urban life brings higher standards of living and, more importantly, increases domestic consumption to rebalance China’s export-reliant economy.
In a 2014 speech, Premier Li Keqiang vowed to “wage a war against poverty with a stronger resolve”. The key to the plan, according to Mr Li, was to “relocate people living in inhospitable areas, and nurture small towns where the relocated (people) can enjoy the same public services as urban residents”.
But China doesn’t want the poor moving to any old city. Thriving megacities like Beijing and Shanghai have officially capped their populations, following existing residents’ worries that an influx of migrants could drown out their access to superior schools and hospitals.
on to US$28.2 trillion, and it is projected to rise to nearly 300 per cent of gross domestic product by 2022.
The fate of China’s war on poverty rests on shaky ground. Moving 70 million people out of poverty will require a complete overhaul of its entire social welfare system as well as trillions in new debt. However the cost is managed, China’s farmers will have to suffer the consequences of the government’s plans, as they always have.