Untitled Document

1. TRENDS IN RURAL POVERTY IN THE 1990s

　　Summary. China has experienced a tremendous decline in poverty over the last twenty　years. Based on the government's austere rural poverty line, official estimates indicate that　poverty declined from more than 30 percent of the rural population in 1978 to less than 5 percent　by end-1998. For the purposes of cross-country comparisons. The World Bank has developed an　international poverty standard. Estimates based on that international poverty line document an
equally @steep decline in the incidence of poverty in China. However, since the international　standard is somewhat less severe than China's official poverty line, it indicates greater numbers　of poor in all years, and that by end-1998 a much larger share of the rural population@about 11.5　percent or some 106 million people@remained in poverty. While China's austere poverty line　was a useful standard when the incidence of extreme poverty was greater, the international
standard has now become a more appropriate measure to gauge the extent of poverty and guide　the government's poverty reduction program in the next century.
　　Available evidence indicates that there has been an increasing concentration of remaining　poverty in China's western provinces during the 1990s. The proportion of China's poor residing　in the western provinces increased from less than half in the late-1980s to more than two thirds by　the mid-1990s. Most of these poor are concentrated in remote townships and villages, often in　mountainous, low rainfall, or other lands with limited potential for even subsistence levels of　production. It also appears that there has been a deepening of poverty during the 1990s, with the　very poorest slipping further below the poverty line. The concentration of large numbers of　extremely poor people in these areas suggests that geographic targeting of poverty reduction　assistance to these households and communities should be intensified.

A. CONTINUED REDUCTION OF RURAL POVERTY

　　China is widely recognized for its achievements in reducing absolute poverty since the　adoption of a broad program of rural economic reforms beginning in 1978. These reforms,　including the adoption of the production responsibility system, the dismantling of the commune　system, agricultural product price increases and market liberalization, have been associated with　dramatic rural economic growth. Broad participation in this growth, together with a well-funded　national poverty reduction program, have brought about a tremendous reduction in rural absolute
poverty during the past twenty years. Official government estimates indicate that the number of　rural poor declined from roughly 260 million in 1978 to 42 million in 1998, or from one-third to　about one-twentieth of total rural population. As summarized in Table 1.1 and Figure 1.1, this　decline continued through the 1990s.

\a The official government poverty line is the equivalent of S0.66 per day.
Source: State Statistical Bureau (SSB) for the official government estimates, and The World Bank for the international standard figures. Both sets of estimates are derived from per capita income data from the SSB's annual sample survey of rural households (see Annex I Tables I to 5). Poverty estimates based on consumption data are reviewed in Box I. I below.

[next]

	1. TRENDS IN RURAL POVERTY IN THE 1990s 　　Summary. China has experienced a tremendous decline in poverty over the last twenty　years. Based on the government's austere rural poverty line, official estimates indicate that　poverty declined from more than 30 percent of the rural population in 1978 to less than 5 percent　by end-1998. For the purposes of cross-country comparisons. The World Bank has developed an　international poverty standard. Estimates based on that international poverty line document an equally @steep decline in the incidence of poverty in China. However, since the international　standard is somewhat less severe than China's official poverty line, it indicates greater numbers　of poor in all years, and that by end-1998 a much larger share of the rural population@about 11.5　percent or some 106 million people@remained in poverty. While China's austere poverty line　was a useful standard when the incidence of extreme poverty was greater, the international standard has now become a more appropriate measure to gauge the extent of poverty and guide　the government's poverty reduction program in the next century. 　　Available evidence indicates that there has been an increasing concentration of remaining　poverty in China's western provinces during the 1990s. The proportion of China's poor residing　in the western provinces increased from less than half in the late-1980s to more than two thirds by　the mid-1990s. Most of these poor are concentrated in remote townships and villages, often in　mountainous, low rainfall, or other lands with limited potential for even subsistence levels of　production. It also appears that there has been a deepening of poverty during the 1990s, with the　very poorest slipping further below the poverty line. The concentration of large numbers of　extremely poor people in these areas suggests that geographic targeting of poverty reduction　assistance to these households and communities should be intensified. A. CONTINUED REDUCTION OF RURAL POVERTY 　　China is widely recognized for its achievements in reducing absolute poverty since the　adoption of a broad program of rural economic reforms beginning in 1978. These reforms,　including the adoption of the production responsibility system, the dismantling of the commune　system, agricultural product price increases and market liberalization, have been associated with　dramatic rural economic growth. Broad participation in this growth, together with a well-funded　national poverty reduction program, have brought about a tremendous reduction in rural absolute poverty during the past twenty years. Official government estimates indicate that the number of　rural poor declined from roughly 260 million in 1978 to 42 million in 1998, or from one-third to　about one-twentieth of total rural population. As summarized in Table 1.1 and Figure 1.1, this　decline continued through the 1990s. \a The official government poverty line is the equivalent of S0.66 per day. Source: State Statistical Bureau (SSB) for the official government estimates, and The World Bank for the international standard figures. Both sets of estimates are derived from per capita income data from the SSB's annual sample survey of rural households (see Annex I Tables I to 5). Poverty estimates based on consumption data are reviewed in Box I. I below. [next]