Two children play in front of a Tujia ethnic group residence in Guzhang County, Hunan Province, a poverty-stricken area

The global quest to eliminate poverty has reached a pivotal moment as the international community enters the final year of the UN Millennium Development Goals (MDGs).

The MDGs, agreed on by world leaders at a UN summit in 2000, set eight goals: poverty alleviation, education, gender equality, child and maternal health, environmental stability, HIV/AIDS reduction and a global partnership for development. The goal on poverty alleviation aims to halve by 2015 the proportion of people below the international poverty line – living on less than $1.25 a day.

China achieved the goal five years ahead of the deadline. According to the World Bank, China reduced the proportion of its population living in extreme poverty from 43 percent of the world's poor population in 1981 to 13 percent in 2010, according to a report released by the World Bank.

Figures from the State Council Leading Group Office of Poverty Alleviation and Development (LGOPAD), China's taskforce for poverty alleviation, show around 660 million Chinese were lifted out of poverty from 1978 to 2010.

China is the first developing country to achieve the anti-poverty MDG target and has vowed to eliminate poverty and build a moderately prosperous society by 2020, LGOPAD Director Liu Yongfu said at a conference on poverty alleviation in Beijing on December 24, 2014. 

Extensive initiatives

Since the initiation of reform and opening-up policies in the late 1970s, the Chinese Government has implemented extensive poverty alleviation initiatives to secure subsistence, especially food and clothing, for poor rural residents.

In 1986, the anti-poverty program started in an organized and large-scale manner, putting 273 national-level poverty-stricken counties under national supports. In 1994, 592 counties in 27 provinces, municipalities and autonomous regions were listed as the key poverty-stricken counties to be aided at that time. Over the past two decades, the list underwent three major adjustments, with more than half of the counties being replaced.

Zhuang Jian, a senior economist with the Asian Development Bank, said the program has played a significant role in poverty alleviation by providing fiscal and technical support to poverty-stricken regions. "In many listed counties, we have seen an improvement in the local infrastructure as well as people's access to drinking water and electricity," Zhuang said.

Many rural poor have received government help to start their own businesses.

Gao Xinqiang is a farmer in Qinglong County in southwest China's Guizhou Province. In 2008, with the help of the local government, he became a shepherd breeding more than 20 sheep.

"Before I started to raise sheep, I used every method to cultivate barren and fragmented cornfields on the hillside, but those efforts were fruitless," Gao said.

As part of the local authorities' poverty alleviation efforts, many such hillside lands have been turned into pastures for villagers to breed sheep or cattle.

"I feel much more relaxed now," Gao said. "We used to plant corn but could only fill our stomachs without saving a cent."

Raising sheep not only frees his four-member family from laborious work in the cornfields, but also brings in 30,000-40,000 yuan ($4,878-6,504) a year. Such a household income is high enough to lift the family out of poverty.

By the end of 2010, China had reduced the impoverished rural population, who lacked food and clothing, from 250 million to 26.88 million. It meant the percentage of rural residents in poverty was slashed from 30.7 percent to 2.8 percent, according to a paper released by the Chinese Academy of Social Sciences (CASS) in 2011.

China has also made outstanding contributions to global poverty alleviation efforts, accounting for 76.88 percent of the reduction in the number of people living in poverty globally between 1990 and 2005, according to UN Development Program statistics.

"China's economic success is the key factor in reducing the country's poor population during the past 30 years," said Li Xiaoyun, Professor with the Beijing-based China Agricultural University.

He said increasing agricultural productivity resulted in a rise in farmers' incomes, and the development of small and medium-sized enterprises prompted the migration of rural labor forces to cities, where salaries augmented the income for families left behind in rural areas.

"Although the rich in China are reaping more benefits, the country's economic success still has great potential to further reduce poverty in most areas in the relatively poor central and western regions," Li said.

Along with overall GDP growth targets, the government is now focusing on doubling per-capita income from that recorded in 2010 by 2020. To expand the safety net for those in poverty, the government raised the poverty line to 2,300-yuan ($374) a year in 2011. It was a 92-percent increase from the standard in 2009 at 1,196 yuan ($194).

As per the new standard, an estimated 128 million rural residents were living in poverty at the end of 2011 - 13.4 percent of the total rural population.

"The previous poverty line underestimated the number of poor people in rural China," said Wang Sangui, Professor at the School of Agricultural Economics and Rural Development of the Beijing-based Renmin University of China. "Only 2.8 percent of the rural population was officially considered poor, which was lower than many developed countries such as the United States, which has a poverty rate of about 15 percent."

Wang believes the new poverty standard better reflects the situation in China and will bring more resources to poverty-stricken regions.

A lasting battle

In a teleconference on October 17, 2014, observed as China's first Poverty Relief Day, President Xi Jinping pledged to make continued efforts to fight poverty. He asked the authorities to mobilize all social forces in the war against poverty as the most arduous task in building a well-off society was raising the poor out of poverty.

Zheng Wenkai, Deputy Director of the LGOPAD, said at a press conference in Beijing that poverty is still a salient problem in China.

"As of the end of 2013, demographically, 82.49 million people [were] still trapped in poverty according to China's poverty line, and 200 million according to the international one," he said.

Data from the office also show that 128,000 villages in 832 counties, including those located in extremely poor contiguous regions, remain poverty-stricken as of 2013.

Li Shi, Professor at Beijing Normal University, said China has a huge population compared to other countries. So it is understandable that it has a relatively high population living below the poverty line.

Poor people are not only poorly paid, but also beset by absence of water, roads, electricity, schooling, health care, and lack of access to higher incomes or loans.

Zheng admitted there are difficulties in solving these problems as poor populations are concentrated in extremely poor contiguous regions with substandard living conditions and inadequate infrastructure. They are also vulnerable to natural disasters.

The poverty alleviation authorities vowed in October last year to reform a program assisting national-level poverty-stricken counties after widespread public complaints of misuse of poverty alleviation funds and the counties' reluctance to exit the program.

In December 2013, the National Audit Office (NAO)reported a misuse of funds. The report was based on an audit carried out across 19 counties in six provincial-level regions - Guangxi, Yunnan, Guizhou, Shaanxi, Gansu and Ningxia. The NAO audited funds appropriated from 2010 to 2012.

During the three-year period, 3.92 billion yuan ($643 million) was injected into the 19 counties. The audit checked 32 percent of it, or 1.24 billion yuan ($203 million), and found 326 million yuan ($53 million) had been misused through false declaration, embezzlement and officials wasting on expensive gifts, banquets and tours. It led to 137 people being investigated.

Many counties took a short-sighted approach, using the fund to simply give money to the poor instead of taking more diverse and efficient supportive measures, said Liu Zhongcheng, head of the poverty relief office of the Inner Mongolia Autonomous Region.

Eliminating poverty is not simply about giving money to the poor. The more sustainable approach is to provide technological and policy support so that they can lift themselves out of poverty and thrive, said Wang Binbin, a project manager with Oxfam, a worldwide development organization focusing on poverty alleviation.

Su Guoxia, another official with the LGOPAD, said new measures will be taken to improve China's poverty alleviation program, including canceling or reducing the proportion of GDP in the assessment of poverty-stricken counties, establishing a restraint mechanism to prohibit counties from unnecessary infrastructure projects, and creating an exit mechanism with incentives for poor counties.

A nationwide campaign to gather detailed information on the poor has been launched, she added. It includes information on the causes and level of poverty so the government can offer specific support.

Du Xiaoshan, Deputy Director of the CASS's Rural Development Institute, said the measures suggested should be an effective way to tackle poverty as different development zones have different problems and needs.

"In counties with severe ecological or environmental problems, the GDP should not be assessed," said Du. "The assessment should focus on the recovery of its ecology and environment, such as air and water quality." He added that these strategies will allow officials to concentrate more on improving people's living.

New channels

On December 10, 2014, China's first industry fund in poverty-stricken areas was jointly founded by the Ministry of Finance, China National Tobacco Corp. and State Development and Investment Corp.

This is the first such fund with government backing and independent operations, an important move to innovate poverty relief and fiscal investment, the founders said in a joint statement.

The registered capital of the fund is 2.8 billion yuan ($455.28 million), all contributed by the founders. It aims to attract more social funding into featured and potential industries in poverty-stricken areas.

According to a cooperation memorandum, the fund will target areas such as farming, animal husbandry, product processing and tourism.

"Public finance shall improve the livelihood of people suffering poverty. The fund has made an innovative step in the country's poverty relief work," said Hu Jinglin, Vice Minister of Finance.

Private enterprises are encouraged to participate in poverty alleviation. Social organizations and individuals will also be mobilized to support the poor, according to a circular issued by the State Council in December last year.

Enterprises investing and creating jobs in poor regions will enjoy more favorable policies in taxation and other fields. China aims to establish an environment where the government, market and society join hands, with all willing participants allowed and able to provide help to the poor, according to the circular.

LGOPAD Director Liu Yongfu said at the conference in December last year that the Central Government is planning to push the use of e-commerce platforms in more than 60,000 impoverished villages in the next five years. Residents in poor rural areas will be encouraged to open stores on major e-commerce platforms to sell their agricultural produce. The authorities will select 1,500 poverty-stricken villages in 2015 for an e-commerce pilot project.

The e-commerce program is part of the effort to help those with the most pressing needs and to make the most efficient use of poverty reduction funds.

"We should intensify our relief efforts, but we should also make sure that efforts go to those who need it most," Liu said at the conference.

Several leading e-commerce companies in China have announced plans to boost their infrastructure and facilities in rural areas to explore the untapped market.

E-commerce giant Alibaba, for one, announced plans in October last year to invest 10 billion yuan ($1.63 billion) within three to five years to improve related facilities in rural China. The move will include 1,000 "county operational centers" and 100,000 "village e-commerce service stations," extending the company's network to one-third of China's counties and one-sixth of its rural areas.