Specter of poverty starts to rise again in China
Accelerating unemployment and an aging population are challenges that Beijing can not ignore
It has been the cornerstone of “China’s Miracle.” Up to 800 million people have been lifted out of poverty in the past 40 years. Or, the number of Chinese citizens living on less than US$1.90 per day. President Xi Jinping basked in the glory, calling it a “complete victory” in 2021.
But during the height of his keynote address in Beijing, questions remained. They have surfaced again five years later. Poverty in the world’s second-largest economy is on the rise as China develops into a middle-income nation.
“Under the higher threshold, almost a fifth of China’s population would be considered to be living in poverty, [the World Bank highlighted],” the Semafor news site pointed out last week. “China is now clearly falling short,” a United Nations economist told the Financial Times.
Behind the news:
- The country has never fully recovered from the shock waves of the Covid-19 pandemic. An export-fueled model has only dampened domestic demand amid high unemployment.
- The real estate meltdown also “destroyed $18 trillion of household wealth,” according to the research group ICIS, which is part of LexisNexis.
Economists say China is getting old before it gets rich.
National Public Radio or NPR
Delve deeper: It was “the greatest property bubble in history” before it popped. Deflation followed with 70% of household wealth tied up in property. Spending dried up. An aging population has only added to the challenges alongside a shaky social security safety net.
Between the lines: “Income [also] remains poor, with per capita gains of around $12,700, one-sixth that of the United States,” Collins Chong Yew Keat, a global affairs analyst at the University of Malaya in Kuala Lumpur, wrote in the Eurasia Review in October.
Big picture: The United Nations has forecasted that China’s “population will decline from 1.4 billion [to] below 800 million by 2100,” the Pew Research Center, a think tank in Washington, reported more than four years ago. Nothing has changed since then.
Bottom line: “Economists say China is getting old before it gets rich, posing a massive challenge for the [Communist Party] leadership,” National Public Radio, or NPR, the nonprofit American media organization, stressed at the end of last year.
China Factor comment: One takeaway is that children from better-off families benefited far more from China’s explosive economic growth. But those from poor backgrounds have “remained poor,” an academic study revealed in 2021. The problem has only intensified.