Current poverty line gives false picture
(China Daily)
Updated: 2005-01-13 08:34

The current poverty line in China may need to be adjusted to reflect the changing social and economic realities on the ground, says an article in China Youth Daily. An excerpt follows:

China Central Television (CCTV) reported on January 8 that China lifted another 3 million farmers out of poverty last year, the highest number in five years.

It seemed a piece of good news.

Our immediate joys were compromised, however, with the knowledge that the current poverty line is a yearly income of between 637 yuan (US$76.70) and 882 yuan (US$106).

China launched its sweeping anti-poverty campaign in 1986 when the poverty line was set at an annual income of 206 yuan (US$25), which given the then low cost of living ensured the subsistence of those on this level.

The poverty line-setting formula varies from country to country.

Some use the relative poverty standard, for example, they define the 20 per cent with the lowest income in society as poor, regardless of economic and price conditions.

For its part the World Bank defines those who live on less than US$1 a day as poor.

Whether China should adopt the internationally accepted poverty line is not of paramount importance at present, but what does is that its poverty line is set according to the principle of ensuring subsistence.

Under current price levels, however, the existing poverty line is barely enough to guarantee a subsistence living.

A considerable number of people who, according to the official poverty line, are not living in poverty, but are in reality impoverished, will justifiably feel aggrieved to hear they are not in fact poor.

China's low official poverty line presents a rather illusory and distorted picture of our poverty-reduction undertakings, a fact detrimental to policy-making.

Perhaps it is time, in line with changing social and economic conditions, to adjust our poverty line.

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