The Chinese Government is raising the poverty line to an annual per-capita net income of 2,300 yuan ($365) for residents in rural areas, according to the working conference on poverty alleviation held at the end of 2011. This qualifies 128 million Chinese as poor and makes them eligible to receive government assistance by the end of 2011.

Fan Xiaojian, Director of the State Council Leading Group Office of Poverty Alleviation and Development, and Zheng Fengtian, a professor with School of Agricultural Economics and Rural Development of Renmin University of China, believe the move can be a significant step to alleviate poverty in China. Excerpts of their thoughts are as follows:

Currently, the problem of providing food and clothing for the poor in rural areas has been basically solved. China's poverty alleviation efforts now turn to focus more on consolidating previous achievements, speeding up poverty reduction, improving the environment, strengthening developmental capabilities and narrowing the wealth gap. As is clearly stated in China's Outline for Poverty Reduction and Development (2011-20), the Chinese Government is to ensure that the nation's impoverished will no longer need to worry about food and clothing by 2020. Their access to compulsory education, basic medical care and housing will also be ensured at that time.

As the threshold is raised, more people are eligible for government anti-poverty subsidies and the number of impoverished drastically increases. It seems to be retrogression, but is actually progress in the concept of governing the country, as it shows the government's resolution of making more people share the achievements of economic development and improving people's livelihood.

In the past, eradicating poverty across China was the drive for the country's poverty reduction efforts. During the three decades from 1978 to 2008, China's poverty-stricken population has drastically dropped from 250 million to about 20 million, being one of the countries that reached prominent achievements in poverty reduction in the world. The World Bank once praised what China has done as a miracle, defined it as the Chinese mode of poverty alleviation and promoted it worldwide.

Admittedly, the previous poverty line is too low to cover the whole poverty-stricken population. In a communiqué of China's National Bureau of Statistics in 2010, the threshold was set at an annual per-capita net income of 1,274 yuan ($200) or 3.5 yuan ($0.55) a day, which can buy about six steamed buns, or three bananas, or two and a half heads of garlic, or a handful of candy. Obviously, the line, which aimed at ensuring people have 2,100 calories a day for basic subsistence, is outdated.

From 1985 to 2009, farmers' per-capita net income had increased nearly 14-fold. However, the poverty line in 2009 was only five times higher than that in 1985. With rising wages, surging housing prices, widening income gap and continuing inflation, calls for raising the threshold continued. The decision is a positive response to public opinion. Internationally, redefining the poverty threshold based on people's basic living standard is progress as the standard is approaching that of $1.25 a day set by the World Bank.

There are still problems to be solved in future poverty alleviation and development efforts. Due to regional differences, local governments should adjust the threshold according to local economic development. In economically developed regions, people's living cost is higher and the poverty line should also be higher accordingly to cover those who are unable to make ends meet. In the future, the threshold should also continue to be raised. If the consumer price index changes, the poverty line should be renewed accordingly. And there should be a specific timetable for that. Compared with the World Bank standard, the redefined threshold is still relatively low.

It is also urgent to renew the decades old criteria for designating poverty-stricken counties. Some of the counties have successfully overcome poverty. And some that were previously not in the list now need government assistance. But there is no mechanism to update the list.

Instead of targeting counties, future poverty alleviation efforts should be focused on helping individuals get rid of poverty so that the policy will be more effective and practical. An efficient monitoring mechanism can be set up to supervise the whole process of governments' poverty reduction efforts. And a dynamic evaluation standard for qualified counties should also be established in case that those that have become rich take up the limited resources that are supposed to be used to help the impoverished.