Regional Policy Seminar on Pro-Poor Growth and Scaling Up Poverty
Reduction in East Asia Gao Hongbin

Deputy Director General of the State Council Leading Group Office of Poverty Alleviation and Development
May 18,2005
　

Distinguished Mr Khandker and Mr. Bourguignon,
Ladies and Gentlemen,

　　First, on behalf of the State Council Leading Group of Poverty Alleviation and Development, I'd like to extend our warmest welcome to the representatives, experts and scholars from all over the world.

　　One year has passed since we met at the Global Conference on Poverty Reduction last May in Shanghai. This time, our meeting means more than response and continuity to that conference. It demonstrates our common acknowledgement of the policy of economic growth for the poor and our firm determination to implement this policy.

　　China has always advocated, supported and carried out the policy of economic growth for the poor. This policy has brought great benefits to China. Over the past twenty years of reform and opening up, the Chinese government has adhered to the fundamental principle of development and to the ideal of common prosperity. Poverty alleviation and reduction have been integrated into the overall plan for national economic and social development, which not only contributed to the rapid economic growth but also helped to achieve the goal of large-scale poverty reduction. Chinese economy grew 9.4% annually during the 26 years between 1978 and 2004. Meanwhile the total number of the rural poor who fail to feed themselves adequately declined by 9 million annually. The world today sees increasing economic development and yet worsening poverty problems. China's achievement in poverty alleviation is no doubt a remarkable one in such a paradoxical reality.

　　While looking back on our achievements, we give more emphasis attention to the difficulties ahead of us. However, we have the courage to solve the problems. China is a developing county with the world largest population and is impaired by unbalanced development. Therefore it faces arduous task in poverty alleviation and development.

　　First, a large absolute number of the poor. China's poverty incidence falls below 3%.Yet due to its population base, the absolute number of the Chinese poor remains huge. By the end of 2004, the number of the rural poor who fail to feed themselves adequately totaled 26.10 million, most of whom live in remote areas with harsh natural conditions and fragile eco-environment. It becomes more and more difficult to solve their problems.

　　Second, slowed pace in reducing the number of the poor. The number of the rural poor dropped by 13.70 million annually during 1980s, 6.2 million in 1990s, and only 1.5 million since this century. A main reason contributing to this is the poor are of weak capabilities against natural disasters and risks in the initial period out of poverty. Therefore we are still faced with tough task to prevent those people from falling back into poverty.

　　Third, continued widening gap of income between the poor and other groups of people. From 1992 to 2004, the ratio between the income of the urban residents and that of the rural residents rose from 2.33:1 to 3.2:1. The gap between the income of ordinary rural residents and the per capita income of the poor also jumped up from 2.45:1 to 4.39:1. The widening gap of income means the poor are in a pronouncedly disadvantaged position under the market economy and it requires big adjustment and improvement in macro policy.


Ladies and Gentlemen:

　　Since the beginning of this century, the Chinese government has set the great goal of building up a well-off society in an all-round way for the benefit of over 1 billion people by 2020. It proposed the human-oriented scientific development approach featuring all-dimensional coordination and sustainability and the strategy for constructing a socialist harmonious society. These fully reflect China's commitment to taking effective measures from a higher level and with greater determination to address the poverty issues, narrow the gap between the rich and the poor and achieve a well-off society.

　　It has been a year since we held the Shanghai Global Conference on Poverty Reduction. During the past year, the Chinese government, in line with requirements of "coordination of urban and rural development, regional development, economic and social development, harmony between man and nature, domestic development and opening up to the outside world," has called for consensus among participating countries on issues such as "economic growth for the poor" and also called for strict fulfillment of promises made in the "Policy Statement by the Chinese Government on Poverty Alleviation and Elimination". China has done a lot of fruitful work in this respect.

　　First, strengthen macro control and increase input into agriculture and rural areas so as to reduce rural poverty and raise the income of rural residents

　　Farm population accounts for the majority of Chinese population. Due to the dual economic structure in urban and rural areas that has been established for a long time, the rural residents' income is comparatively low and the poor are mainly concentrated in rural areas. Last year the macro control focused on strengthening agriculture. A number of important policies were made such as the reduction and exemption of agricultural tax, the cancellation of tax on special agricultural produce except that on tobacco products, direct subsidies to farmers who grow grains, subsidies to farmers who use improved crop strains in certain areas and floor price for the purchase of important grain products. These measures increased fiscal expenditure from the central government on "agriculture, rural residents and rural areas" to 262.6 billion RMB, an increase by 22.5%. The real benefits to farmers are so substantial that it was rarely seen in Chinese history. This greatly stimulated the initiative of most farmers. This year, 592 key counties under the national poverty alleviation and development program will be exempted from agricultural tax.

　　Second, push forward the poverty alleviation and development and improve farmers capabilities in self-accumulation and self-development.

　　China sticks to the basic principle of poverty alleviation through development: the central government supports, guides and encourages the residents in poverty-stricken areas to rationally explore local resources, actively develop local commodity production, improve production conditions and further enhance their comprehensive strength and competence for future development by relying mainly on their own strength and hard work. Last year, the central government allocated 12.2 billion RMB in poverty reduction, up by 800 million RMB over the year before last. 29.9 thousand poverty-stricken villages carried out the village-based poverty alleviation and development program. 260 leading enterprises were given preferential policies including subsidized loans and tax reduction and exemption. These enterprises were identified to drive the economic restructuring of poverty-stricken areas and to increase the income of local farmers. Many regions have carried out large-scale training and transfer of labor force out of poor areas, about 3 million person times a year. Paralleled with the poverty alleviation and development, aide system for urban and rural residents has been established in certain areas. The accumulated number of disaster-stricken people who received aide from the system totaled 68 million person times. With concerted efforts, the per capita net income of farmers in 592 key counties under national poverty alleviation program rose by 7.3%, 0.5 percentage point higher than the national average. The number of the rural poor who fail to feed themselves adequately dropped by 2.9 million, which is the largest yearly decrease since the new century.

　　Third, strengthen policy support for and fiscal input into mid and west regions and promote the development of local public utilities

　　95% of the Chinese poor live in mid and west China. China began its educational program of "two basics" (that is, basic popularization of nine-year compulsory education and basic elimination of illiteracy among the young and the middle-aged) and the Teaching and Poverty Alleviation Relay Program of Young Volunteers in the western regions last year.。From this year on, the students from poor families in the key counties under the national poverty alleviation and development program will be exempted from book fees and extras during their compulsory education period. The resident students will get subsidies for their school life expenses. The work on the training and transfer of the poverty-stricken labor force out of rural areas will be strengthened. The pilot program of new cooperative rural medical care system is progressing steadily in most rural areas. The central government has designated special fund for building 533 county cultural stations and radio and TV facilities in 40 thousand villages. The public utilities in mid and west China have experienced great development.

　　Fourth, increase urban employment and further improve social security system

　　The government carries out proactive policies of employment. The registered urban unemployment rate dropped to 4.2% last year, a 0.5 percentage point lower than the expected figure. Moreover the government continues to implement the policy that guarantees the subsistence allowances for urban residents, to improve the basic living standard of the retirees from the enterprises and to push forward the pilot program of urban social security system. The central fiscal expenditure on social security reached 146.5 billion RMB, a rise by 18.1% over the previous year.


Ladies and Gentlemen:

　　The elimination of hunger and poverty is one of the top common concerns of the international community. It requires strengthened cooperation and concerted efforts from different countries. China will solve its poverty issues by relying mainly on its own strength and is looking forward to more help and support from international community.

　　China is always concerned about and gives support to the poverty alleviation practices by other countries. We signed The Memorandum of Understanding on the Establishment of the International Poverty Reduction Center in China with UNDP during last year's Shanghai on Poverty Reduction. And our signing of the official agreement the day before yesterday marks the launch of the all-round construction of IPRCC. The Center belongs to China as well as to the world. It will open a window for China to conduct exchanges and cooperation with international community in the field of poverty alleviation. Aiming at addressing the hot issues and difficult issues on the development of the poor, we will cooperate closely with East Asian countries and other foreign countries, pool the wisdom of experts and scholars who specialize in poverty reduction and make joint contribution so as to provide a new platform for the world theoretical research and policy innovation in this field. We will accelerate the relevant transformation of research gains into practices with a focus on the capacity building of the poverty alleviation staff. We will offer a training platform for most developing countries. Efforts will also be made to conduct international cooperation and exchanges in poverty reduction, to promote the comprehensive dialogues between governments and non governmental organizations, between policy makers and academic researchers and to improve the sharing of knowledge, information and experience across the world.

　　East Asia is concentrated with developing countries and has over half of the world's poor. The task that falls on this region is arduous and challenging. Here I would like to highlight the following four suggestions:

　　First, we should strengthen the joint policy research on economic growth for the poor, channel the information and knowledge exchanges and further enhance our cooperation level in poverty reduction;

　　Second, more frequent dialogues should be organized between poverty-reduction theory researchers and policy makers in East Asia. Relevant theoretical research gains should be put into policy practices more rapidly;

　　Third, we should call upon the international community to strengthen the training of staff engaged in poverty alleviation;

　　Fourth, international organizations should focus their attention and work more on East Asia and other areas that have larger number of poor people and more serious poverty problems.


Ladies and Gentlemen:

　　The Seminar of today is a new start for close exchange and cooperation between countries involved in poverty alleviation since we held the Shanghai Conference on Poverty Reduction. I believe, through the joint efforts from the participants and members of the international community, the successful experience of different countries based on local realities can go well beyond boundaries. They will be introduced to more areas and play greater role in those areas. The insightful vision of many experts and scholars will gradually be realized in wider scope of areas. All your wisdom will be turned into real contribution to world poverty alleviation.

　　Finally I sincerely wish the Seminar a complete success, and all of you good health and good work.

　　Thank you!