Poverty and Living Standards since 1949

Abstract

Trends in poverty and living standards in China were mixed during the period from 1949 to 1978. In the 1950s and 1970s, the more egalitarian distribution and increased production of food, combined with improvements in access to basic education and public health, reduced poverty, and improved living standards. During the Great Leap Forward period (1959–1962), however, the collapse of food production and the failure to take corrective measures led to widespread famine of historic proportions and a sharp decline in living standards. China’s subsequent tremendous success in reducing extreme poverty during the economic reform period (1978–2013) is widely recognized. World Bank estimates indicate that the number of absolute poor (that is, those people consuming less than $1.25 per day in Purchasing Power Parity terms) in China declined by more than 600 million from about 835 million in 1981 to 173 million in 2008. Based on a much more austere poverty line, official government estimates indicate that the number of poor was significantly lower than the World Bank estimates throughout the economic reform period but confirm a similar sharp decline in poverty over these years. Moreover, these consumption- and income- based estimates of the decline in poverty are matched by broad-based improvements in nutritional status, educational attainment, health, and other indicators of well-being since the late 1990s. While there is consensus on the massive reduction in poverty in China during the economic reform period, there is continuing debate on the effectiveness of the government’s poverty reduction program. Other important issues include the deterioration of access to basic education and public health in rural areas resulting from the dissolution of the commune system during 1978–1984 and the widening of income disparity beginning in the mid-1980s. In addition, while very large-scale Labor Migration has made a massive contribution to economic growth and poverty reduction, there are also many well-recognized adverse social consequences to this demographic trend. There is also concern that ethnic minority people, people with disabilities, the elderly, and women are known to represent disproportionately large shares of China’s remaining absolute poor and suffer the greatest deprivation. China has actively collaborated with a host of international partners on its poverty reduction program during the economic reform period. Consistent with China’s strong economic growth, the Chinese government has begun the transition from development aid recipient to aid donor, and is expanding its role in international poverty reduction and development work. This article was compiled with the assistance of Wang Yilin.