Changing face of China’s muted poverty policy
President Xi Jinping now considers the subject taboo after his high-profile address in 2021
It was a scene choreographed against the backdrop of the Great Hall of the People in Beijing. As the state-run media cameras rolled, President Xi Jinping declared “complete victory” in eradicating poverty in China more than two years ago.
Fast forward to 2023 and that statement looks flimsy. Fallout from the Covid crisis has drained public funding even though the state is sitting on US$6 trillion of foreign-exchange reserves.
At least half is stashed away in “hidden” accounts, according to a commentary last week by former US Treasury official Brad Setser for China Project, a New York-based media group.
Sickening when you consider that poverty has now become a dirty word among the ruling Communist Party elite and is blocked on social media.
“A heartbreaking video of a retiree that showed what groceries she could buy with 100 yuan or $14.50 – roughly her monthly pension and sole source of her income – went viral on the Chinese internet. The video was deleted,” the New York Times reported.
Figure it out:
- Xi and his gang now consider poverty a taboo subject after his address in 2021, even though they rigged the numbers.
- Beijing draws the line between poverty at about $2.25 a day or at 2011 prices, adjusting for purchasing power.
- But the World Bank reported that for upper-middle-income countries such as China, the poverty line should be $5.50 a day.
China’s poverty reduction record has become diminished.
Indermit Gill of the Brookings Institution
Delve deeper: Economist Indermit Gill, of the Brookings Institution, brought this issue into sharp focus in 2021 in a commentary for the Washington-based think tank.
What he said: “Because of its deliberately frugal standard, China’s poverty reduction record has become progressively diminished as it has grown richer.”
Big picture: Shan Wei, of the National University of Singapore, captured the mood perfectly as China’s poverty alleviation policy disappeared into cyberspace.
Why it matters: “The government has long realized that [economic inequality is] a threat, and they need to do something. But so far, what they have done, is to control the flow of information on [these] issues,” Shan told TIME online last month.
China Factor comment: Last year, the Financial Times reported that “cash-strapped local governments” had “been forced to divert funds from poverty alleviation.” It was used to “finance mass testing” during Xi’s zero-Covid policy. Now the poor are paying the price.