China’s economic success has rightly been credited by academics and pundits alike for pulling tens of millions out of poverty. What is more impressive is that China has succeeded without following the dictates of the Washington Consensus. The introduction of capitalist reform under Deng Xiaoping and its proliferation under Jiang Zemin and now Hu Jintao has brought prosperity to the nation. But perhaps more importantly, economic growth has led to the degradation of China’s environment. While it has developed at an unprecedented rate, its cities are some of the most polluted in the world.
Look at this. Just look at how much pollution is in the air. In fact, Beijing is the air pollution capital of world.
The economic development has increased income inequality and many who have connections to the Communist Party have benefited from China’s introduction to the global economy. One of the lone bright sides of China’s economic success (meaning, a change that does not also have a negative consequence) has been the reduction in poverty.
The high growth of per capita expenditures of the poorer segments of the population in China suggests that the incidence of poverty in terms of international benchmarks has declined. In fact, a careful look at household survey data from the early 1990s onwards indicates that the country has achieved remarkable declines in poverty.
Unfortunately, the official Xinhua News Agency reported earlier this week that the Chinese government’s plan to change its poverty threshold to the international standard means that as many as 40 million more Chinese will be considered impoverished. Bloomberg notes:
The State Council, or cabinet, is considering using per- capita annual income of 1,300 yuan ($185) as a level to measure poverty, an increase from the current 1,067 yuan, Xinhua reported, citing a notice from the council’s Office of Poverty Alleviation and Development.
The 22 percent increase would provide real purchasing power of $1 a day, bringing the poverty line in the world’s most populous nation to international standards for the first time, Xinhua said.
Once the new figure is adopted, the number of people officially classified as impoverished would double to 80 million, the agency said, citing unidentified experts.
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