BEIJING — Despite a flourishing economy and an estimated growth rate of 6.8 percent in the fourth quarter of 2016, China still records 82 million individuals living below the poverty line of a dollar per day. A large proportion of these individuals lives in rural areas. Due to this fact, China has a Gini coefficient value of 0.49 – above the 0.4 value that denotes a high disparity value. Six billion yuan (USD$830 million) was allocated towards the provision of aid to rural areas in the year 2016.
China’s proliferating growth over the span of just three decades, owing to the work of both Chairman Mao Tse-tung and Deng Xiaoping, is indeed remarkable. Privatization paved the way for a more open economy with increasing aggregate demand. However, rapid growth directly resulted in income disparities and social inequality owing to the trickle-down effect; this phenomenon is an indicator of the wage gap between the rich and the poor. As a result, many individuals in rural areas were left behind, including more than 61 million children.
Additionally, a relic of Mao’s communist government still prevails in China. It is known as the Hukou — a passport system that has greatly augmented the social division between the urban and rural sectors of society. Individuals from rural settlements found it exceedingly difficult to migrate to urban areas as they had to persevere with the small plot of land that they were entitled to and had to adhere to many stringent regulations.
However, the State Council is spearheading reforms to the Hukou system. Municipalities are introducing a point-based system with relaxed criteria to enable individuals to obtain an urban Hukou more easily. Individuals still need to meet criteria for age, employment, location, and housing.
The reformed Hukou system will greatly increase the self-sufficiency of many individuals and will hopefully increase rural to urban migration and alleviate poverty in China. The government is also helping farmers make this transition by granting them more security for their property and assets and improving infrastructure.
The government’s efficacious Five-Year Plans have taken on many economic and social reforms over the years. The first Five-Year Plan was introduced from 1953 until 1957 by Mao Tse-tung, and the 13th Five-Year Plan is currently taking effect to fight rural poverty in China. From 1978 to 2015, the number of rural people in poverty plummeted from 770 million to 55.75 million. The Five-Year Plans have been lauded for their sustainable and viable solutions to social and economic issues in China.
The 13th Five-Year Plan is an intensive development plan that will take effect until 2020 with the aim of bolstering the position of poorer villages. This agenda will involve job creation, improving education and ameliorating healthcare. These improvements will also be effective to bridge the gap between the urban and rural areas in China.
Moreover, the government is planning to galvanize the rural online market this year and is aiming to use the internet as a way to combat rural poverty in China. Farmers living in rural areas are beginning to employ e-commerce to maximize the output of their product. Lecunatao, a popular online platform, is now expanding and diversifying and has physical stores in more than 70,000 villages across 25 provinces. The Government is also encouraging universal platforms like Alibaba’s Taobao to provide services in rural villages to ensure more inclusion so that farmers can easily sell their produce.
A possible long term solution is improving welfare and other services so that the poor have access to more resources. Improvements must also be made to make said services more streamlined and inclusive. Consequently, the central government is pledging a policy of universal access to health and medical services by 2020. This move will help to cater the aging population in rural areas.
It is vital to crack down on rural poverty in China to ensure that a greater proportion of the population is given the chance to be economically active and to productively contribute to their country. Minimizing the gap between the rural and the urban sectors is essential to alleviate income disparities and ensure more equitable growth for the economy.
– Shivani Ekkanath