China Is Still Really Poor
China says it has lifted 700 million people out of poverty. What does that really mean?
By Jacob L. Shapiro
If you go to the World Bank’s country overview page for China, you will find a striking comment in the first paragraph: “Since initiating market reforms in 1978, China…has lifted more than 800 million people out of poverty.” Speaking at the G-20 summit in Hangzhou at the beginning of this month, Chinese President Xi Jinping said that China has lifted “more than 700 million people out of poverty” and improved the living standards for 1.3 billion people overall. So China and the World Bank agree, give or take a hundred million people.
Xi also noted in his remarks that this success is unprecedented in human history. He happens to be correct about that – no country has ever made the sort of developmental leaps that China has made in the last 38 years since opening up its economy, or in the last 67 years since the Communist Party came to power. The problem is that the World Bank’s definition of poverty in this case is extremely narrow, and the 800 million figure obscures, rather than reveals, that poverty is still a significant problem in China and one of the most important drivers of our forecast for the country.