The World Bank began tracking poverty in China in 1981. In that year, 88.3 percent of China’s population lived on less than $1.90 a day (roughly 870 million people). Push the threshold up a little bit and poverty in China was even more striking: 99.1 percent of China’s population lived on less than $3.10 a day (over 980 million people). The last year for which the World Bank has official data is 2010, and the transformation, as you can see in the line graph above, is extraordinary. In 2010, only 11.2 percent (almost 150 million people) lived on less than $1.90 a day. Not shown above is that 27.2 percent (almost 360 million people) lived on less than $3.10 a day.
However, the problem with these data sets should already be clear. If you factor in population growth, you can make the claim that China has lifted 800 million people out of poverty if you define poverty as living on less than $1.90 or $3.10 a day. This doesn’t say anything about how well those lifted out of poverty are doing. A rural household living on $1.91 a day by this standard wouldn’t be counted as suffering from extreme poverty, even though by any objective measure a household earning that much on an annual basis would be cripplingly poor.
Another less obvious problem is in some ways more serious. The average annual per capita disposal income by household in China in 2014 was about 20,071 yuan – about $3,000, or $8.22 a day. On the face of it that seems a somewhat promising figure. It wouldn’t make any of these households rich, or even lower-middle class by American standards, but it would be quite a leap forward from where they started. The average figure, however, is skewed by the huge disparity between urban and rural incomes. Urban households’ per capita income was 29,831 yuan – almost $4,500 a year. Rural households have a per capita income of only 9,892 yuan – about $4 dollars a day.
The rejoinder to this is that far more Chinese citizens work in the cities than in the countryside compared to any other period in Chinese history. And this is true, to an extent. One of the most remarkable things about China’s transformation is how it has urbanized. When the Communists came to power, 80 percent of the people lived in the countryside. There was no proletariat in China – the revolution was carried out by a massive agricultural peasant class. In 1978, only about 23 percent of people employed in China were urban workers – the country was still predominantly rural. As of 2014, over half of China’s roughly 770 million employed workers were urban workers. The problem is that the other half – almost 380 million people – are employed in rural areas. The urban households aren’t exactly raking it in, but the rural households have not progressed far enough beyond the World Bank’s arbitrary $3.10 to say they have escaped much of anything, and certainly not poverty.
There is another divide that also skews the data upwards: the division between the coastal and interior provinces. |
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