Poverty in China

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In China today, poverty refers mainly to the rural poor. Decades of economic development has reduced urban extreme poverty.^[1][2][3] According to the World Bank, more than 850 million Chinese people have been lifted out of extreme poverty; China's poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms,^[4][5] which still stands in 2022.^[6][7][8]

The Chinese definition of extreme poverty is more stringent than that of the World Bank: earning less than $2.30 a day at purchasing power parity (PPP).^[9] Growth has fuelled a substantial increase in per-capita income lifting people out of extreme poverty. China's per capita income has increased fivefold between 1990 and 2000, from $200 to $1,000. Between 2000 and 2010, per capita income also rose at the same rate, from $1,000 to $5,000, moving China into the ranks of middle-income countries.

Between 1990 and 2005, China's progress accounted for more than three-quarters of global poverty reduction and was largely responsible for the world reaching the UN millennium development target of dividing extreme poverty in half. This can be attributed to a combination of a rapidly expanding labour market, driven by a protracted period of economic growth, and a series of government transfers such as an urban subsidy, and the introduction of a rural pension.^[10] The World Bank Group said that the percentage of the population living below the international poverty line of $1.9 (2011 PPP) fell to 0.7 percent in 2015, and poverty line of $3.2 (2011 PPP) fell to 7% in 2015.^[4]

At the end of 2018, the number of people living below China's national poverty line of ¥2,300 (CNY) per year (in 2010 constant prices) was 16.6 million, equal to 1.7% of the population at the time. On November 23, 2020, China announced that it had eliminated absolute poverty nationwide by uplifting all of its citizens beyond its set ¥2,300 per year (in 2010 constant prices),^[11] or around ¥4,000 per year in 2020.^[12] The World Bank has different poverty lines for countries with different gross national income (GNI). With an GNI per capita of $10,610 in 2020,^[13] China is an upper middle-income country.^[14][15] The poverty line for an upper middle-income country is $5.5 per day at PPP.^[6][7][8][9] As of 2020, China has succeeded in eradicating absolute poverty,^[8][9][16] but not the poverty defined for upper middle-income countries which China belongs to.^[17][16] China still has around 13% of its population falling below this poverty line of $5.50 per day in 2020.^[9] In 2020, premier Li Keqiang, citing the National Bureau of Statistics (NBS) said that China still had 600 million people living with less than 1000 yuan ($140) a month, although an article from The Economist said that the methodology NBS used was flawed, stating that the figure took the combined income, which was then equally divided.^[18][19]