Rural poverty in China is much higher than urban poverty.
By Michael Karadjis
November 24, 2010 – Links International Journal of Socialist Renewal -- I strongly agree with Reihana Mohideen (“The left cannot ignore China’s achievement in poverty reduction”), that the left cannot simply ignore China’s impressive achievements in poverty reduction and other related social development. I also agree very much with Reihana that the main source of China’s outstanding success as a Third World capitalist power is to be found in the Chinese revolution itself, despite the undoing of its socialist basis and the uncontrolled capitalist development that has taken its place.
I would make a few points about poverty reduction.
First, it is true that China’s success has been outstanding, and Reihana claim that no other country has made such a significant contribution to reducing global poverty as China has is entirely true. Indeed, while global poverty fell from 1.45 billion to 1.1 billion over 1980-2000, if China is excluded, global poverty actually rose from 845 million to 888 million. However, such figures can hardly be separated from China's size – a large proportion of the world's poor live in China.
Second, regarding the incidence of rural poverty allegedly dropping from 30.7% in 1978 to 1.6% in 2007, this should be treated with extreme caution. This is based on 60 cents a day, not the international US$1 a day standard (itself an absolute minimum). Actually, Reihana makes a slight mistake in her article when she says that urban poverty, based on the $1 a day standard, fell from 31.5% in 1990 to 10.4% in 2005; this is in fact the fall of overall poverty in China, not just urban poverty, as can be seen from the chart Reihana supplies and from its original source. Given that rural poverty is much higher than urban poverty, we can surmise that the rural poverty rate is much higher than 10%, so I see little value in quoting the unreal 1.6% rate, except for the size of the reduction.
Reihana is completely right to point out that the most radical decline in poverty occurred during the first phase of China’s market reform, from the end of the 1970s to the mid-1980s, and that since then the decline has been more gradual. Indeed, according to the World Bank, while China reduced poverty by 400 million people in 1980-2000, a full half of this occurred in the first quarter of that period, the first half of the 1980s. This is not surprising – this was precisely the least capitalist period, when the major reforms were the end of the super-centralised collectives and allowed small peasants to farm their own plots, while largely leaving the rest of the socialised framework intact. Rural poverty began declining far more slowly after more radical market reforms began in 1985, and especially in the very capitalistic 1990s.
Third, while China certainly should be congratulated for cutting poverty from 30% to 10% over 1990-2005 (indeed from much higher than 30% if we go back further than 1990), this is not entirely a unique achievement, especially in Southeast Asia. It certainly contrasts fabulously with the only other very large country China is comparable with in size, capitalist India, and indeed with most countries in Africa, Latin America and South Asia. However, countries such as Vietnam, but also capitalist Thailand and Indonesia, have had huge successes in poverty reduction (not to mention the more historically exceptional cases of Taiwan and South Korea). Based on the international standard, Vietnam reduced its poverty rate from over 75% before 1988 to 16% in 2005, probably the world record, and this in a country that in 1990 was in ruins, close to being the poorest country on Earth.
The achievements in social indicators China has made are also impressive and should not be ignored. Nevertheless, we also ought not exaggerate this, given the extreme plight of many millions of people who fall into that 10%, meaning a rather large number of people in China’s case. It is true that under the Hu-Wen leadership since 2003, some progressive changes have been made to fix the ultra-liberal approach of the previous Jiang Zemin regime, including the new initiatives in health and education Reihana discusses. However, according to Jonathon London, who did a PhD on Vietnam’s health and education market liberalisation – about which he was rightly highly critical – Vietnam still compares well with China. Despite the serious regional inequality that has occurred in Vietnam, according to London it maintains a degree of equality via central funding for health care and for basic programs, and even expansion to allow “unprecedented access to primary and lower-secondary education as well as preventative health services”, which he contrasts with the “Hayekian nightmare in many parts of rural China”.
Specifically, for example, according to UNDP’s Human Development Report 2005, Vietnam has overtaken China in reducing infant and child mortality. Between 1970 and 2003, China improved from 85 deaths per 1000 life births to 30 for infants and from 120 to 37 for the under fives, while Vietnam progressed from 55 to 19 (infants) and from 87 to 23 (under fives). Even much richer Thailand had only brought infant and child mortality down to 23 and 26 respectively, both higher than in Vietnam. In the Philippines, the figures were 36 and 27, and in Indonesia, 41 and 31. Thus Vietnam, the poorest country in the region, comes out best in this; China comes out average for the region, about where its level of per capita GDP stands (though this is still far better than most of the Third World). The numbers in Bangladesh are 69 and 46, and in Pakistan, 103 and 81, these being countries with a similar level of per capita GDP to Vietnam.
Vietnam’s life expectancy is the same as that quoted for China in the article; Vietnam’s literacy rate of 93 per cent was close to that of Thailand, and better than that of China, Indonesia and even Malaysia, which had literacy rates of around 85-87 per cent several years ago. If China’s literacy rate is now well over 90 per cent, as Reihana’s article shows, this is an important gain, but it is only now catching up.
In the fight against TB, a most devastating disease in Asia, Vietnam has been the star and China a laggard; figures from several years ago show that while Vietnam was diagnosing 82 per cent of cases, the highest in Asia and the highest of a list of 22 highly populated countries with a serious TB problem, Thailand only managed 73 per cent, the Philippines 58 per cent, Indonesia 30 per cent and China only 27 per cent. Vietnam also had the highest success rate in curing TB, at 93 per cent.
The point is not, of course, simply to compare China and Vietnam as such. However, the fact that Vietnam has achieved this on a much lower level of GDP per capita than China is testament, in my opinion, to the fact that for most of the market reform period, at least let’s say from around 1990 to 2005, Vietnam’s reforms had a markedly less outright capitalist nature than China’s, and the stronger social commitment stemmed, I believe, from the influence of large numbers of cadres still alive with direct links to the revolution, in positions of authority at all levels throughout the country.
Indeed, the progressive changes to health and education in China under the Hu-Wen leadership since mid-decade are in many ways catching up with initiatives already adopted by poorer Vietnam: the fees that had been introduced in Vietnam in early market reform for primary education were abolished a decade ago; a system of health care for the poor (covering a quarter of the population), ethnic minorities, children and other groups was introduced and added to the existing health cover system in official workplaces so that some 60% of the population is now covered. In 2005, the Politburo of the Vietnamese Communist Party declared that by 2010 the whole population should be covered by some form of health insurance and up-front fees should disappear.
However, in saying this I am far from giving a free pass to Vietnam. On the contrary, for anyone living here, it is easy to see that the realities are often far different from the policies. Unofficial fees are regularly paid to low-paid medical personnel and to schools for a variety of reasons too complex to go into here, but generally related to the poverty of government administration services; the 2010 target has in any case been moved to 2014. It would be good if Reihana could provide some more information on China’s plans to cover 90 per cent of the population with health insurance; it sounds like a good move, but I nevertheless imagine they are quite similar to Vietnam’s policies, and I expect we will find the same problems. The same goes for the new schooling policies.
One important pattern I can detect here is that, in both countries, more radical market and capitalist reform (i.e., China 1985-2003, Vietnam since 2006) corresponds to relative social stagnation or regression (even if still better than much of the world), while far less radical market reform still within a more socialist framework (China 1978-1985, Vietnam 1992-2005), or attempts to turn back from extreme liberalism and partially re-statise the economy (China since 2003) correspond to far more radical social gains in poverty reduction, health, education etc. I think this is important for socialists to understand when discussing these issues.
For the record I believe that Vietnam’s pro-capitalist regression in 2006-2010, combined with Hu-Wen’s current turn back from the more radically capitalist period in China, has meant the two countries have met in the middle with a kind of state-capitalist “market-socialism”. It is no coincidence that, despite friction over the “South China Sea” (or “East Sea”), political, economic, military and ideological relations between the two countries and ruling parties is currently extremely close.
The China question is a fascinating one concerning one fifth of the world and I’m glad Reihana has raised it in this way. China is without question rapidly developing in a capitalist way but built on the remnants of the structure established by the revolution, and that is what gives it both its special dynamic, and its special importance for socialists to better understand. Ignoring China is wrong, and impossible; celebrating it too much, however (I’m certainly not suggesting Reihana is doing this), can however be interpreted as celebrating a new capitalist, if not semi-imperialist, “model” of development which in many ways has shown itself to be quite ruthless, in particular towards its own workers and peasants, and increasingly workers and peasants elsewhere in the Third World, as examples from as far afield as Zambia, Cambodia and Papua-New Guinea attest to.
[Michael Karadjis is an Australian socialist resident in Vietnam.]
 World Bank Vietnam, press release, Global Poverty Down By Half Since 1981 But Progress Uneven As Economic Growth Eludes Many Countries, Washington, April 23, 2004.
 London, J. D. Social Provision and the Transformation of the Socialist State: Mass Education and Health provision and Vietnam’s Market Transition, PhD thesis, Department of Sociology, University of Wisconsin, 2004.
 United Nations Development Program, Human Development Report, 2003. This masks a bigger difference: China’s female literacy in the earlier part of the decade was only 78 per cent (UNICEF, Information by Country, 2000); in Vietnam, female literacy, at 91 per cent, was only a few points behind the rate for males, United Nations, Statistics Division, Millennium Indicators, 2003.
 WHO, Global Tuberculosis Control - Surveillance, Planning, Financing, 2004.
Mike, Many thanks for this extremely useful contribution and precisely the sort of discussion that we need to have. I also think that using Vietnam as a comparison is perfectly legitimate and in fact necessary as the social gains made by Vietnam have been truly laudable especially in health and education indicators (maternal health for example, even in ethnic minority areas)and more importantly because, as you correctly point out, the difference is that Vietnam did not go as far as China in dismantling its' programs in an overtly pro-capitalist direction. I should add that the contribution by Chris Slee was also very useful. Many thanks, Chris.
I will try and write more about the issues that you and Chris have raised, maybe over the holiday period. I also think you hit the nail on the head that we can't be 'too celebratory' about China (or Vietnam) as this does fall into the framework of all these pro-capitalist pundits who praise to high heaven all and every move towards capitalist restoration. I was well aware of this danger when I wrote the article. Nevertheless, I was trying to bend the stick in relation to the left discussion, in a slightly different direction.
Finally, I also want to note the anti-China campaign being waged by imperialism in our region regarding China's geo-political 'ambitions'. This is a theme running hot in the Philippine press in which US imperialism is being projected as a more 'benign' power because it's more 'democratic'. We are being asked to forget the barbaric history of the US and other western imperialist powers with the 'threat' of the China bogey. In our discussions here we have taken a position of rejecting this line and supporting China, as still a third world oppressed nation, against the US and western imperialism's maneuvers in the region. From this point of view as well it's important that we start educating our members on the China question.
I'd like to raise a different issue, regarding how we look at statistics. Many Asian countries have managed to substantially lower their poverty rates in the recent decades, following the rapid industrialization, that's true. But let's not forget how these statistics are calculated. What is considered here is the income, so if a peasant who lives from its farm, earning (almost) zero, moves to the city to work in a factory, the statistics tell us that (s)he is no longer poor, even if the wage is very low. But, all things considered, (s)he might be living in worse conditions, taking into account that the wage might not be high enough to pay the rent and all the extra costs that living in the city imply and that (s)he no longer has access to a small piece of land to cultivate her/his food.
My point is, once one looks at the working conditions and the wages of the urban workers in these countries it is hard to say if urban workers live better than rural ones, despite the fact that their income per capita is higher, and this leads us to be somewhat skeptical of these statistics.
Personally, I am very impressed with how China has growth and also helping rural areas improving their living standard. I was in Sichuan last year to help out with the earthquake project, and how people come together and re-united to help their home really impressed me.
Sometimes I felt that 1st world countries need to embrace an open heart when comes to poverty questions, and the truth is we only live once, must else live it to the fullest..just my 2 cents.
Daniel Bardsley, Foreign Correspondent
20 November 2010
BEIJING: China's engagement in Africa has come under the spotlight amid claims from Zimbabwean union officials that Chinese companies are engaged in the "gross violation" of labour rules.
Chinese firms are said to have underpaid workers, forced them to work overtime for free, and not provided adequate safety clothing, according to the Zimbabwe Construction and Allied Trades Workers' Union.
The complaints were made to the Zimbabwean newspaper Newsday.
"We would like to warn the Chinese contractors who are operating in Zimbabwe that if they do not follow the laid-down laws, the union is going to take strong action against them," the secretary general of the union, Muchapiwa Mazarura, told Newsday.
He said members had complained of the "gross violation of labour laws", and called on Zimbabwean government ministries to make greater efforts to ensure Chinese companies complied with the law.
"When the Chinese donate funds for projects and development to the government, they should be reminded that our government does not donate human resources in return," Mr Mazarura said.
The comments have gained widespread media attention in China, and labour rights organisations said they had heard similar complaints.
They represent the latest controversy centred on China's extensive dealings in Africa, which have polarised opinion among observers as bilateral trade has grown to exceed US$100 billion (Dh367bn) a year.
Some see China's focus on building infrastructure as speeding development in a way aid money has failed to, while others have voiced fears China is exporting its own poor environmental and labour standards to Africa.
While as many as 750,000 Chinese nationals are thought to have moved to Africa, Deborah Brautigam, an academic and author of The Dragon's Gift: The Real Story of China in Africa, said during a visit to Beijing this year that Chinese companies operating in the continent employed about 80 per cent African staff. She said "often standards are not good" for such employees.
According to Geoffrey Crothall, a spokesman for the Hong Kong-based pressure group China Labour Bulletin, Chinese companies were "exporting their domestic management style" to Africa.
"We have seen several cases in Africa with local workers being treated very badly by Chinese companies, expecting the local workers to work in the same conditions as the same standards they would expect workers in China to work in. These conditions are pretty bad," he said.
Tensions between Chinese managers and African workers often develop, Mr Crothall said, as a result of "culture clashes". While in Chinese factories, staff are commonly expected to work long hours and at high speed, such expectations create "resentment" when applied in Africa. He called on Chinese companies in Africa to pay workers "decent" wages and not to flout the local laws.
Chinese companies operating in Africa have denied they are mistreating workers, in comments made to media in China.
Staff were provided with protective clothing and paid according to rules set out by the local trade union, Ge Yizhong, the deputy general manager of Zim Nantong Construction, said of his company's operations in Zimbabwe.
"There is no ill treatment of workers at my company," he told the Global Times newspaper. "We have adjusted working hours to meet workers' demands. We have raised their pay twice since last year to counter the devaluation of the local currency."
As well as disputes over labour standards, China's ties with Africa have sparked concerns that efforts to promote human rights and good governance are being undermined, because development assistance does not depend on improvements in these areas.
In November, Fred Magdoff traveled to Shanghai with his wife, Amy Demarest, to attend the Marxism and Ecological Civilization conference at Fudan University (see the Review of the Month in this issue). Here are some reflections from Fred about the conference, Shanghai, and China, past and present.
People attending the November 17-18 conference were from Fudan, other universities in Shanghai such as Donghua University, as well as Wuhan University, Tsinghua University (in Beijing), and Beijing University. Also attending were non-university personnel such as a representative from the Institute of World Socialism of the Central Bureau of Compilation and Translation. The only other Westerner attending was Joel Kovel, editor of the journal Capitalism Nature Socialism and contributor to MR. Many of the speakers were interested in contemporary Western Marxist thought, especially the ideas of Marx and Engels on the environment. Guo Jianren, one of those helping to organize the conference, did his doctorate on John Bellamy Foster’s work, and John’s ideas and contributions were cited many times throughout the conference. During informal discussion, a number of people mentioned how important MR and Monthly Review books have been and continue to be to them. People remember Paul and Harry. And the reaction to my recollections of Bill Hinton, called Han Ding in China, makes it clear that his contributions will be long remembered.
Although I was well aware of the sweeping changes since last being in Shanghai twenty years ago, the physical and cultural transformation is truly stunning. New elevated highways, new subway lines (quiet and clean, judging from our ride on the Number 10 line), new buses, lots of new automobiles, whole landscapes of high-rise apartments and tall commercial skyscrapers, a brand new international airport. Looking across the Huangpu River from the Bund—the natural levee near where the Western colonial powers set up shop in the nineteenth century—toward Pudong on the other side, I realized that all the buildings I was seeing were built within the last two decades. So much of the city has changed that you can almost believe you are in Paris or London or New York. Some of those attending the conference came to Shanghai on a high-speed train. A number of long-distance trains are now operating, and the 2011 opening of the Beijing-to-Shanghai route will cut the rail travel time between those cities from ten to only four hours. China is developing a network of high-speed trains, expected to cover nearly ten thousand miles by 2020.
Amy and I made a point to visit the memorial at the site of the First Congress of the Communist Party of China, held in secret in the 1920s. We saw artifacts as well as exhibits about conditions in China at the time. We read about the great famines of the late nineteenth century (see below) and the colonial intrusions and economic control, including the Opium Wars. Quite a bit of mental juggling goes on when one considers that it is the Communist Party of China that is leading the headlong rush to capitalist development. Although a considerable portion of certain industries remains state owned, the profit motive is now the driving force of the economy.
The advances are amazing, but many problems have arisen in the rush to develop. Some examples are the continued exploitation of workers (though some have gained a little bargaining power); the confiscation of land/buildings at will for development by municipal and county authorities who inadequately compensate people for the loss of their homes or livelihoods; massive pollution of air, water, soil; many industrial accidents in poorly supervised and managed projects; and the inability of the economy to absorb college graduates in work appropriate to their education. (While we were in Shanghai, a terrible incident, taking fifty-eight lives, occurred as the supposedly fire-retarding insulation being sprayed on the outside of an apartment house under renovation caught fire from a welder’s torch.)
The disparities between the new wealthy and the poor are well known by all, and the government has done some, but not nearly enough, to remedy the situation. According to a November 20 editorial in the English language China Daily, it was not surprising that “China ranks 125th on the Forbes’ gross national happiness (GNH) index…[because thirty-six million people] in China still live in extreme poverty. Economic growth amid bipolarizing income certainly cannot solve their problems. The beautification projects—taller buildings, wider roads, and bigger cities—only makes these vulnerable people invisible.” And with significant food price inflation, “such people encounter untold suffering even at the slightest rise in food prices. They suffer the most because of environment degradation, soaring housing prices and dwindling jobs, especially decent ones….The poor desperately need help. Whatever gains have been made against abject poverty risk being undone by rising food prices.”
Many people in China have long memories and are trying to pass on some of their remembrances—whether regarding recent history, in an effort to keep some of Mao’s ideas and ideals alive, or regarding the more distant past—to the young. A very good friend of ours came to the conference from Shanxi Province (the one where Bill spent much time, and where the village of Long Bow, featured in Fanshen, is located). He was a farmer and village leader during the Cultural Revolution and for many years has been an important agricultural scientist, breeding new varieties of wheat for growing in northern China. One of his current interests is to remind people of the terrible famines that struck China (as well as India and other locations) in the late nineteenth century. He told us that he heard stories about the famines from his grandfather.
For a full year, from spring of 1877 through spring of 1878—part of the era that Mike Davis discusses in his book Late Victorian Holocausts—there was no rain whatsoever. As he visited fields around the region, our friend kept an eye out for artifacts from the famine and found eight large stones carved in separate villages, describing what happened in the village during the famine. On average, in a society wracked by severe drought and weakened by integration into the system developed by Western imperialism, about 70 percent of the people died.
As they had done in India, the English industrial looms destroyed the Chinese cottage industry of spinning and weaving cotton as a source of income. Additional problems included the dwindling Chinese system of grain storage because of the financial stress of the Opium Wars, the growing trade deficits resulting from forced opium imports, the adoption by the Great Powers of the gold standard, as well as midcentury civil wars and floods. When disaster struck, even the use of cash (instead of stored grain) could not relieve the problem, because the available money couldn’t keep up with the vast price inflation—there just wasn’t enough locally available grain. The difficulty of transportation to the famine areas also made long-distance transport extremely expensive. Areas depopulated by deaths and migration at the time of the famines did not recover earlier population densities until the mid-twentieth century.
As we consider the prospects of a destabilized climate in the future, we should keep in mind that dramatic climate anomalies such as those of the late nineteenth century—like nothing that has occurred since—can devastate large regions of the world. All the more reason to do whatever we can to help educate people about the environmental harm being done to the planet by a system whose only driving force is profits, a system that must grow continually to avoid recession or depression, that views resources as infinite, and that assumes that the earth can permanently absorb all the waste we generate.