Vulnerability to poverty in China: a subjective poverty line approach

Wide arrays of econometric techniques have been proposed to assess vulnerability to poverty. All such measures attempt to determine the probability to fall (or remain) into poverty given households’ characteristics. We have used cross-section data from the Chinese Household Income Project Series and subjective poverty lines to shed light on the sources of uncertainty in China. The lack of a comprehensive pension system and distance from the markets raise vulnerability in rural areas, whereas the hukou registration system has generated a growing mass of exploited and unprotected migrants in urban areas.     

Agricultural trade liberalization and poverty in China

The overall goal of this paper is to examine the impacts of trade liberalization on China's agriculture, in general, and poverty, in particular. The impacts on agriculture are analyzed by commodity and by region. Because different farmers (especially those in different income brackets) produce diverse sets of commodities, the main part of our paper analyzes the effects on households and their implications for the poverty through the simulation of household production and consumption changes in response to the trade-induced market prices changes on a disaggregated (by province), household-level basis. The results of our analysis lead to the conclusion that, unlike fears expressed in the popular press and by some scholars, the positive impacts of trade liberalization are actually greater than the negative ones. Although other effects on the rural economy from trade liberalization of other subsectors (such as textiles) may be equally large or even larger, this study's focus on the agricultural sector shows that there will be an impact from agricultural trade liberalization and that the net impact is positive for the average farm household in China. However, policymakers still need to be concerned. Not all households and not all commodities will be treated equally. Our findings show that poorer households, especially those in the provinces in the western parts of China, will be hurt. The main reason is that the farmers in Western China are currently producing commodities that are receiving positive rates of protection, rates of protection that will fall with additional trade liberalization. Hence, if policy makers want to minimize the impacts, there needs to be an effort to minimize the effect on these households either by direct assistance or by eliminating constraints that are keeping households from becoming more efficient by shifting their production more towards those commodities that will benefit from trade liberalization.     

Targeted poverty investments and economic growth in China

In the mid-1980s, the Chinese government launched its ambitious poor area development policy, which was centered around a series of grant, credit, and Food-for-Work programs. Ironically, for the remainder of the 1980s rural poverty remained at about 90 to 100 million, or approximately 10% of the rural population. The lack of progress cannot necessarily be blamed on ineffective poor area policies, since much of the agricultural economy was mired in a deep recession between the mid-1980s and the early 1990s. By the mid-1990s substantial additional poverty reduction had been achieved. Even in the late-1980s, farmers in many poor counties did better than the national average in terms of income growth. After accounting for the effects of macroeconomic elements, what factors can help explain the differences in performance among poor regions and between poor areas and rich ones? Can part of these differences be accounted for by poor area policies, in general, or by the way local and regional officials allocate their poor area investment funds, in particular?The overall objective of this paper is to analyze the effectiveness of Chinese poor area policy. Specifically, the paper seeks to meet three objectives. First, we want to understand the evolution of poor area policy since the mid-1980s, trying to deduce the true goals of central and regional poor area officials, as well as how these policies have been implemented in the provinces. Next, we want to understand the magnitude and scope of investment into poor areas, and examine if changes in these policies have affected the uses of the investment funds. Finally, we want to determine the effectiveness of the investment of poor area funds, analyzing which types of investments have generated growth, and which ones have not.     

Geography and educational inequality in China

Since the 1980s, educational reforms in China have decentralized administration and finance and privatized costs. These changes have emerged in the context of rapid economic growth and rising regional economic disparities. The reforms have mobilized new resources in support of education, but they have also exacerbated regional disparities in funding for schools. Analyses of trends in school finance and expenditures have emerged, but detailed studies of the shifting ties between geography and educational outcomes in the population have not.Using 2000 census data on year and location of birth and educational attainment, we begin to address this gap. We compare the links between birth province and educational outcomes across 5-year birth cohorts to illuminate trends in region-based inequalities. Results show that the percent of variation in years of schooling explained by birth province declined for cohorts born through the early 1960s, and then increased thereafter.Additional analyses use a dissimilarity index to characterize the strength of the link between geography and access to each level of schooling. This index indicates that the link between geography and access to primary school has greatly increased across cohorts, as the few without access to primary school are ever more concentrated in poor areas. The link between birth province and access to subsequent levels of schooling shows mixed trends through cohorts born in the early 1960s: stability for junior high school and a weakening trend for senior high school and college. Thereafter, the dissimilarity index increased, substantially for junior high school and slightly for senior high school and college.Results attest to the enduring significance of geography as an educational stratifier in China. More broadly, results suggest the importance of regional inequalities in conditioning the relationship between development and educational stratification.     

Economic growth and child poverty reduction in Bangladesh and China

This paper analyzes child poverty in Bangladesh and China during periods of rapid economic growth. It compares the extent as well as profile of child poverty in both countries. Comparisons on the extent of child poverty over time and across countries are made using a decomposition framework attributing child poverty differences to differences in three components: mean child income, demographic circumstances and the distribution of child income. Child poverty is found to be more extensive in Bangladesh than in China, and is very much a problem for rural children in both countries. The results show that economic growth can reduce child poverty but does not always do so. For understanding changes over time and across countries in the extent of child poverty, it can be necessary to also consider changes/differences in the distribution of child income as well as in the demographic composition.     

Changes in poverty in Zimbabwe between 1990 and 1996: Worsening outcomes under adverse conditions

The article examines changes in poverty and sources of change in Zimbabwe between 1990 and 1996. Comparable national survey data are used for both periods. Findings indicate that levels of wellbeing and poverty worsened during the period, although there is some evidence that inequality is lower in the latter year. Rural poverty is more prevalent, severe and deeper than that in urban areas, but urban poverty grew dramatically during the period. Much of the growth of urban poverty is associated with economic restructuring and the failure of the urban economy to produce high-quality jobs. While the educational attainment of the urban population grew during the 1990s, secondary and higher levels of education were no longer a guarantee of escape from poverty in 1995/6. In rural areas, all land-use types exhibited an increase in poverty; these findings are robust to the welfare measure chosen.     

A multidimensional analysis of poverty in China from 1991 to 2006

Most studies have reported non negligible improvements for China in terms of poverty during the last three decades. However, this result is potentially hampered by two limitations. First, it may be contingent to the specific choices made regarding the poverty line and the poverty indices used for the analysis. As a consequence, it may collapse if one uses alternative poverty lines or poverty measures. Second, it results from a focus on the sole monetary aspects of poverty. As income does not cover all facets of well-being and since the relationship between these two concepts are quite fuzzy, it may be worth using a broader view of well-being, hence opting for a multidimensional approach of poverty analysis. In the present paper, these two issues are addressed using multidimensional stochastic dominance procedures on the joint distribution of income, education and health in seven Chinese provinces.     

Multi-generational educational mobility in China in the twentieth century

Two essential strategies to understand the mechanisms of intergenerational mobility are to compare mobility across countries and across time. However, for multi-generational mobility, estimates for developing countries are mostly missing, and trend studies are rare. This paper uses education to measure social status and provides nationally representative estimates of social mobility over three generations in China that are suitable for international comparison. Results show that grandparents’ education positively correlates with children’s education, controlling for the parents’ education. This grandparent effect is comparable to what is found in Western countries, despite differences in cultures and institutions. During the sample period, the correlation between grandparent and child education is relatively stable. When exploring mechanisms, we find that the observed grandparent effect is primarily due to omitted information from the parents’ generation, not direct interactions between grandparents and children.     

The long-term evolution of national income inequality and rural poverty in China

Using the five waves of the China Household Income Project surveys conducted during 1988–2013, we investigate long-term changes in national income inequality and rural poverty in China. National income inequality rose markedly to 2007 and thereafter fell slightly. Income growth was widely shared, but inequality increased because the high-income percentiles had faster income growth than lower percentiles and because the gap between urban and rural household incomes widened. The fall in income inequality after 2007 reflects faster income growth among low-income percentiles and the impacts of newly introduced redistributive policies. The paper also finds a considerable, ongoing poverty reduction in rural China. A poverty decomposition analysis indicates that this rural poverty reduction was mostly due to income growth rather than redistribution.     

Housing inequality and housing poverty in urban China in the late 1990s

This paper discusses housing inequality and housing poverty in urban China in the late 1990s, using original household surveys. Focuses are on the distributive implications of the privatization of public-owned housing and the wave of rural–urban migration. Estimates of the imputed rent function for owned housing purchased at discount prices indicates that meritocracy and political credentialism work differently as determinants of housing inequality. The paper confirms that there has been a large disparity in housing conditions between urban and migrant households, and that a new type of housing poverty has been emerging among migrant households.     

Are poverty rates underestimated in China? New evidence from four recent surveys

Knowledge of poverty prevalence is essential for any society concerned with improving public welfare and reducing poverty. In this paper, we estimate and compare poverty incidence rates in China using four nationally representative surveys: the China Family Panel Studies (CFPS) of 2010, the Chinese General Social Survey (CGSS) of 2010, the China Household Finance Survey (CHFS) of 2011, and the Chinese Household Income Project (CHIP) of 2007. Using both international and official domestic poverty standards, we show that poverty rates at the national, rural, and urban levels based on the CFPS, CGSS, and the CHFS are all much higher than the official estimates and those based on the CHIP. This study highlights the importance of using independent datasets to verify official statistics of public and policy concern in contemporary China.     

Alleviating multi-dimensional poverty through land transfer: Evidence from poverty-stricken villages in China

This study constructs a Ramsey–Cass–Koopmans growth model of the agricultural sector, which includes land transfer characteristics, to investigate the theoretical basis of the land transfer impact on multi-dimensional poverty, under a steady equilibrium. Using 2010, 2012, and 2014 panel data from the Mutual Aid Fund for Poverty-Stricken Villages in China, we obtained results indicating the impact of land transfer on multi-dimensional poverty, based on the generalized propensity score method. The research results are as follows: (1) The intensity of rural households' land transfer in poverty-stricken villages remains low, at only 14.54%; however, it demonstrates an increasing trend. (2) When the intensity of land transfer is continuously enhanced, the multi-dimensional poverty of rural households in poverty-stricken villages decreases. (3) Rural households' land transfer in poverty-stricken villages can reduce multi-dimensional poverty by improving their savings behavior. “Precautionary savings motivation” is an important land transfer mechanism affecting rural households' multi-dimensional poverty in poverty-stricken villages.     

Measuring the poverty lines for urban households in China—an equivalence scale method

Laid-off employees in the state-owned enterprises (SOEs) due to China's economic reform and the enterprise-restructuring plan created newly urban poverty, lending urgency to the task of constructing accurate measures of poverty thresholds. Along this line, a fundamental question is: given the widely used poverty threshold for an individual, how should that threshold vary across households with different demographic characteristics? Equivalence scales, which can be used to derive comparable poverty lines for households of different sizes and compositions and in different regions, are ideally suited for providing answers to this question. Accordingly, this paper uses the Urban Household Survey (UHS) data of China to estimate the equivalence scales for Chinese urban households. The results provide a quantitative reference to calculate the comparable poverty lines for households with different demographic compositions. A useful byproduct of this study is a specification of the demand system of China.     

Financial permeation and rural poverty reduction Nexus: Further insights from counties in China

We investigate how financial permeation affects rural poverty reduction by matching representative county household data with the local banking market, FinTech development, and county characteristics data from China. We discover that financial permeation via bank branch expansion boosts household income and mitigates household vulnerability to poverty, and these effects are magnified on lower-income and more vulnerable households, especially in impoverished counties. Further considering the potential substitution effect of FinTech, we verify that enhancing financial permeation via bank branch expansion still matters to rural poverty reduction even in the digital era. Exploring the channels, we find that financial permeation accelerates rural poverty reduction directly through improving financial utilization and motivating investment activities and indirectly through spurring local economic growth. Notably, the more pronounced marginal effects of the channels on households in impoverished counties, to some extent, explain the poverty reduction effect of financial permeation. The results imply the necessity of financial permeation via bank branch expansion for the realization of shared prosperity.     

我国西南地区旅游扶贫实施中应注意的若干问题

分析了旅游资源比较丰富的我国西南贫困地区旅游扶贫实施中应该注意的十大问题,包括实现多重目标的有机结合问题、旅游资源保护与开发的有机综合问题、旅游扶贫与小城镇开发建设有机整合问题、旅游扶贫与提升人力资源的有机会融合问题、旅游扶贫与旅游规划结合问题、旅游扶贫与其他扶贫方式结合问题、旅游扶贫理论与旅游扶贫实践结合问题、旅游扶贫的短期性的个别人收益与长期性的多数人受益结合问题、旅游扶贫与其他产业的共同发展结合问题、旅游扶贫和西部大开发结合起来等,为我国西南地区各级政府以及旅游部门有效开展旅游扶贫工作提供新思路。     

Exchange rate exposure and its determinants in China

This paper investigates the foreign exchange rate exposure and its determinants using the data of all firms listed on the Chinese stock market from 2005 to 2018. We find significantly linear and nonlinear exposures to bilateral as well as multilateral foreign exchange rates. Our temporal study also shows that considerably more Chinese firms were exposed to exchange rate fluctuations after the major exchange rate reform in 2015. We find a negligible role played by international operations of firms in explaining exposures. The level of exchange rate exposure is primarily explained by variables that are proxies for a firm's hedging costs. Larger firms, or firms with less leverage ratio, tend to have smaller exposures. Exposure is found to increase with a firm's growth opportunity. Last but not least, we find that leverage ratios and growth opportunities impact more significantly on exposures for firms with separation of control and cash flow rights.     

Born to be different: The role of local political leaders in poverty reduction in China

By incorporating imprinting theory into a political–economic framework, this paper studies the role of local political leaders in poverty reduction. Exploiting exogenous turnovers of city-level party secretaries in China, I find that city secretaries with early-life poverty experiences are more likely to increase the incomes of poor families in their jurisdictions. I further find that the effect of city secretaries' poverty experiences on the income of the poor is more pronounced in the counties that are not officially categorized as impoverished by the central government and among the families living above the poverty line set by the Chinese government but below the international poverty line proposed by the World Bank. It is suggested that local political leaders affect poverty reduction outcomes by instilling their personal preferences, which can be shaped by their early experiences, into their economic decisions.     

Community poverty and inequality in western China: A tale of three villages in Guizhou Province

Using a census survey of households in Guizhou Province, this paper examines the patterns of village poverty and inequality and their major correlates. The results show that poverty incidences vary greatly among villages and inequality is relatively high within villages in these impoverished areas. Although agriculture is still the major source of livelihood in this inland western region, income from local nonfarm jobs and remittance is more unevenly distributed and accounts for the largest share of overall income inequality. Surprisingly, blood donation is another major source of cash income. On the expenditure side, health care was found to be one of the most important sources of inequality. The paper also found that the distribution of assets, particularly land holdings, contributes to overall income inequality.     

Income growth, inequality and poverty reduction: A case study of eight provinces in China

This paper examines the growth performance and income inequality in eight Chinese provinces during the period of 1989–2004 using the China Health and Nutrition Survey data. It shows that income grew for all segments of the population, and as a result, poverty incidence has fallen. However, income growth has been uneven, most rapidly in coastal areas, and among the educated. A decomposition analysis based on household income determination suggests that income growth can largely be attributed to the increase in returns to education and to the shift of employment into secondary and tertiary sectors.     

Measurement of relative welfare poverty and its impact on happiness in China: Evidence from CGSS

Individual or household income has been the conventional yardstick of poverty. Presently, non-income factors are universally accepted as measures of poverty. Attention on the multiple dimensions of poverty and their policy implications has been growing in the past 20 years. However, few studies have analyzed relative multidimensional poverty, especially in China. Moreover, the relationship between relative welfare poverty and happiness has been rarely studied, particularly given that the decline of poverty seemed not bringing a significant increase in happiness in China. This research gap is noteworthy because enhancing the subjective well-being of the people is crucial to a nation's sustainable economic development. On the basis of the micro-level data from China General Social Survey, this study puts forward a welfare approach to analyzing the relative multidimensional poverty and then determines the link between relative welfare poverty and individual happiness. Our results show that 1) relative welfare poverty has not declined significantly and 2) there is a significantly happiness-reducing effect of relative welfare poverty.