Poverty Reduction in China: Does the Agricultural Products Circulation Infrastructure Matter in Rural and Urban Areas?

Abstract

Since the reform and opening-up in 1978, a remarkable achievement has been made in poverty reduction in China. Many previous studies have analyzed the poverty reduction effects of economic growth, fiscal expenditure, education levels, information technology, urbanization, foreign trade, industrial development and other factors. As a bridge between production and consumption, the agricultural products circulation industry has an important role on the income growth of rural residents. However, the construction level of China’s agricultural products circulation infrastructure lags behind, resulting in a decline in the efficiency and quality of agricultural products supply, and farmers are also facing the embarrassing situation of increasing production without increasing income. Therefore, in this study, we selected the China’s provincial panel data from 2003 to 2017 to analyze the effect of agricultural products distribution infrastructure in narrowing the income gap between urban and rural residents and poverty reduction in China. First, we review the extant literature and elaborate the poverty reduction path of agricultural products circulation industry; secondly, we build models step by step and select nine variables; lastly, we carry out regression analysis on the overall poverty reduction effect of China’s agricultural products circulation industry, the poverty reduction effect of internal factors of agricultural products circulation industry and regional spatial heterogeneity with Stata software. Our results showed that the development level of the agricultural products circulation industry and the degree of opening-up have significant positive effects on narrowing the income gap between urban and rural residents and poverty reduction varied, with different regions in China. Among all the internal factors of development of agricultural products circulation industry in poverty reduction, the core explanatory variable is the investment in agricultural products circulation infrastructure with the largest poverty reduction effect, followed by the human capital, informatization level and number of employees of the agricultural products circulation industry, and the poverty reduction effects of the four internal development factors have had significant regional differences in China. Our findings further complement the internal mechanism of agricultural product circulation infrastructure on poverty reduction in China, suggest that we should apply appropriate strategies and give priority to the internal development factor of the agricultural product circulation industry, with the largest poverty reduction effect according to local conditions in different regions, and so be better able to achieve the targeted poverty alleviation and offer insights for the rural poverty reduction in other countries, especially in the developing countries.