Discuss China’s Social Inequality and Poverty in the Context of Post-Reform China

Topics: Poverty, Economic growth, Poverty threshold Pages: 9 (3100 words) Published: June 18, 2012
Introduction

Poverty and inequality has long been a feature of Chinese society (Li, 2003; Khan, et al., 2002). The long period of economic growth in China after reform has helped many people become richer. With an average annual GDP growth rate of 9.7 per cent since 1980, China “has had the largest and fastest poverty reduction in history” (World Bank 2008: 22). China has been the most rapidly growing economy in the world over the past 25 years. This growth has led to an extraordinary increase in real living standards and to an unprecedented decline in poverty. The World Bank estimates that the poverty rate in China fell from 64 per cent in 1981 to 7 per cent in 2007 using a “cost of basic needs” poverty line (World Bank 2008). A series of research studies in the late 1990s, however, unveiled a disturbing fact that alongside the ‘new rich’, there are people suffering from absolute poverty including urban marginalized groups, such as the long term unemployed (or laid-off workers) and low income households, rural-urban migrant workers, and farmers living in remote rural areas. The economic and social conditions of the poor contrasts sharply with the conditions of the booming middle class.

China's reform and opening up are always seen as a strong driving force for social and economic development and the country now faces new opportunities and challenges. Over the last thirty years, China has made notable and important progress in the reform of some crucial sectors, such as improving economic structure and the environment for private businesses, and promoting the reforms related to fiscal, taxation and financial systems (Tang & Ren 2003). However, it is never to be over looked that there are also downsides and negative outcomes result from this rapid progress since the great reform in China. For example extreme poverty, extreme polarization and social inequality, fragmentary social welfare system, serious natural resource scarcity and environmental degradation etc. At this point, Chinese government unavoidably comes to a central policy dilemma. Without sufficient financial resources, the state will not be able to handle social problems yet without dealing with the social problems, economic growth cannot be sustained. In this essay, I will briefly review the main elements of China’s economic reform and its impact on per capita income and the poverty level. I will also examine some forms of inequality in China and suggest that there need to be efforts to get the government out of the dilemma.

China’s economic reform and poverty
Poverty may mean different things to different people. Openheim and Harker (1996) state that “Poverty means going short materially, socially and emotionally. It means spending less on food, on heating and on clothing than someone on an average income.” There isn’t an official definition for poverty but it is suggested that if an income is half of the national average then it indicates poverty. (BBC Scotland.) The World Bank Organisation says that poverty is mostly based on incomes and writes that “A person is considered poor if his or her income falls below some minimum level necessary to meet basic needs.” The minimum level that is referred to in this quote is commonly known as ‘the poverty line’ and varies is different parts of the country.

Poverty usually refers to three different types of poverty; absolute poverty, relative poverty and social exclusion. Absolute poverty is defined as a lack of sufficient resources with which to provide necessary needs for an individual. Relative poverty regards income in relation with the average. Relative poverty is concerned with an absence of materials that may be needed in daily life. Social exclusion is described as a label for what can happen when an individual or area suffers from multiple issues including unemployment, poor housing and low incomes. Often people who are living on benefits such as housing benefit and council tax benefit are...

Bibliography: Chen, S. and M. Ravallion (2001), ‘How did the world 's poorest fare in the 1990s?’, Review of Income and Wealth, 47(3): 283-300.
Chen, S. and Y. Wang (eds.) (2001), China’s growth and poverty reduction: trends between 1990 and 1999, Policy Research Working Paper. Washington, DC: World Bank.
China Statistics Bureau (1999), Reports on the 50 years’ Achievements of New China (Xinzhongguo 50 nian xilie fenxi baogao),
http://www.stats.gov.cn/tjfx/ztfx/xzgwsnxlfxbg/index.htm.
Gao, Q. 2006. The social benefit system in urban China: Reforms and trends from 1988 to 2002.
Gao, Qin (2008). The Chinese social benefit system in transition: Reforms and impacts on income inequality. Annals of the New York Academy of Sciences, Vol. 1136: 342-347.
Gao, Qin and Carl Riskin (2009). Explaining China’s changing inequality: Market vs. social benefits. In Davis, D. and Wang, F. (eds), Creating Wealth and Poverty in Contemporary China. Stanford University Press. Palo Alto, CA.
Gordon. R.H. and Li, W. (2002), ‘Taxation and Economic Growth in China’, http://econ.ucsd.edu/~rogordon/hongkng4.pdf.
Jefferson, G.H. and T.G. Rawski, (2002), ‘China’s emerging market for property rights: theoretical and empirical perspectives’, The Economics of Transition, 10 (3), 586-617.
Khan, A. et al. (2002), ‘Inequality and poverty in China in the age of globalisation’, China Information, XVI: 141-142.
Khan A. and C. Riskin (2000), Inequality and Poverty in China in the Age of Globalisation. New York: Oxford University Press.
Li, S. and B. Gustafson (1998), ‘The end of the 1980s: An estimation of the scale and extent of poverty in China’, Social Sciences in China, XIX (1): 5-16.
Li, X.D. (2003), ‘Rethinking the peasant burden: Evidence from a Chinese village’, Journal of Peasant Studies, 30 (3-4): 45-74.
Qian, Y. (2003), ‘How Reform Worked in China,’ in D. Rodrik (ed.), In Search of Prosperity: Analytic Narratives on Economic Growth, Princeton, NJ:
Princeton University Press.
Ravallion, M (2004), Pro-Poor Growth: A Primer, World Bank Policy Research Working Paper 3242.
Tang, J., L. Sha & Z. Ren. 2003. Zhongguo Chengshi Pinkun yu Fanpinkun Baogao (Report on Poverty and Anti-Poverty in Urban China). Huaxia Press. Beijing, China.
Tang, J. (2002), Social Exclusion and the Life of the Urban Poor (Shehui Paichi Yu Chengshi Pinkun Qunti de Shengcun Zhuangtai,), Discussion Paper 13, Sociology Research Institute, China Social Science Academy.
World Bank (2008). China Quarterly Update, February 2008. Available online at http://siteresources.worldbank.org/INTCHINA/Resources/318862- 1121421293578/cqu_jan_08_en.pdf. Accessed on 06/06/2012.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Poverty and Income Inequality in China Essay
  • Poverty and Inequality Essay
  • Inequality and Poverty Essay
  • Poverty And Inequality Essay
  • China’s Economic Growth and Poverty Reduction Essay
  • Social Justice: Childhood Inequality Essay
  • Social Inequality Research Paper
  • Social Inequality Essay

Become a StudyMode Member

Sign Up - It's Free