Development and Poverty Alleviation in China

98 Pages·2012·6.67 MB·English

,I
~~~
The Network
The Development Studies Network provides information and discussion on social and economic development issues. It
publishes a quarterly journal, Development Bulletin, runs regular seminars on development policy and annual conferences
on international development. Members of the Network are encouraged to contribute information and papers to the
Development Bulletin.
Subscription to the Development Bulletin includes membership of the Network. This allows you to publicise in the
Development Bulletin information about new development-related books, papers, journals, courses or conferences. Being a
member of the Network allows you special discounts to Network seminars and conferences.
Network Office Bearers
National Patron Advisory Board
The Right Honourable Mr Ian Sinclair Dr John Browett, Dean, School of Social Sciences and
Director Development Studies Centre, Flinders University
Board of Directors Professor John Overton, Director, Development Studies
Dr Pamela Thomas Centre, Massey University
Associate Professor Joe Remenyi, Deakin University Dr Terry Hull, Director, Demography Program, Australian
Professor Gavin Jones, Australian National University National University
Dr Sharon Bessell, Australian National University Mr Bob McMullan, MP, Canberra
Janet Hunt, Consultant Professor Mark McGillivray, World Institute for Development
Economics Research, United Nations University, Helsinki
Editorial Board
Dr Pamela Thomas, Managing Editor
Professor Dick Bedford, University ofWaikato Editor
Professor Dean Forbes, Flinders University Dr Pamela Thomas
Professor R. Gerard Ward, Australian National
University Associate Editors
Professor Cherry Gertzel, Curtin University Annabel Pengilley
Professor Joe Remenyi, Deakin University (Book Catherine Baird
Review Editor)
Correspondence
Development Bulletin
Development Studies Network
Research School of Social Sciences, Australian National University
Canberra ACT 0200, Australia
Tel: [phone]
Fax: [phone]
E-mail: devnetwork@ anu.edu.au
Website: http:// devnet.anu.edu.au
ISSN 1035-1132
The Development Studies Network

I
I
I
I
I
I
I
Editor's notes 3
Discussion
Introduction: Development policy and poverty alleviation in China 4
Pamela Thomas
Features
Attacking hard-core poverty in village China 8
joe Remenyi
en
International exchange and participatory discourse in Chinese 13
poverty alleviation
Nick Young
I ,
Engaging civil society in China 17
c Katherine Morton
China's Great Wall: Limits to law reform in the People's Republic 21
Stewart Fenwick
Improving maternal and infant health care for the rural poor? A case 25
Q) study of the implementation of the maternal and infant health care law
in two poor counties
Rachel Tolhurst, Zhang Tuohong, Yang Hui, Gao fun and Tang Shenglan
Entrenching poverty: The drawbacks of the Chinese 29
I '
government's policy programs
c Jonathan Unger
China's poverty pockets: Issues for sustainable development 34
Bob Frame
Rural finance and poverty alleviation in China: An institutional perspective 39
0
Caleb Cheuk-yin Kwong
Irrigation and poverty in China 43
Jonathan Unger
'Opening up': The politics of poverty and development in rural China 47
Ben Hillman
China's mountain poor: Integrating poverty alleviation and environmental 51
protection
Ben Hillman
Poverty alleviation in China: Current situations and trends in agricultural 55
and rural development
Li Ou
Agricultural development and poverty reduction in China: 62
Policy considerations
Xiaolu Wang and Ronald C Duncan
The Economics and Foreign Trade Training project and economic 65
growth and poverty alleviation in China
Gus Hooke
The HIV/AIDS problem in China 69
jane. Bell
May2003
Viewpoint
Insider/outsider perspectives on local-level aid to Bougainville and 73
Papua New Guinea: Dilemmas for communities, NGOs and donors
Ruth Saovana-Spriggs and Maev O'Collins
Publications
New books 79
Reports and conference papers 82
Journals 85
en
Resources
Organisations 86
Programs 91
I ,
Web resources 92
c
(])
I ,
c
0
2 Development Bulletin 61
This issue of Development Bulletin provides discussion on today's most critical development
issue - poverty reduction. We selected China as a case study of poverty alleviation and
poverty reduction because it provides an example of successful poverty alleviation, as well as
examples of missed opportunities for achieving sustained poverty reduction and for dealing
en
with entrenched poverty. The China example provides information on models of poverty
alleviation and poverty reduction and the impact of different political approaches to poverty
reduction. In particular, it provides insights into the need for policies, legislation and tax
regimes that support poverty reduction, rather than working against the very poor and further
(]) entrenching poverty. In addition, the papers in this issue provide valuable discussion on
introducing participation and participatory approaches to poverty reduction in a socialist state.
We have brought together papers from a very wide range of internationally recognised
I , researchers, writers and observers ofs ocial and economic development in China. We would
like to thank them for their contribution.
0
Peer review
The papers in this issue are fully peer reviewed and we would particularly like to thank our
international editorial board who assisted in this process.
z
Update
As a valuable addition to the perspectives on aid and development in the South Pacific
included in our last issue, South Pacific Futures, we have included Ruth Saovana-Spriggs and
en Maev O'Collins paper on insider and outsider perspectives on aid to Bougainville. This paper
provides useful insights for NGOs, consulting companies and donor organisations.
The 'back half'
We have listed some of the most recent literature on development and poverty reduction in
China and provided information on key organisations working on poyerty alleviation. If
you have further information on poverty alleviation in China or the organisations involved,
please contact us and we will include this information in the following issue of the journal
0
in our 'Update' section.
Next issues
I ,
Our next issue of Development Bulletin will focus on the development and policy implications
• of rapid changes in population structures in Asia and the Pacific. This issue will include a
number of invited papers, as well as the papers, discussion and recommendations from the
Development Studies Network symposium, 'Population change in Asia and the Pacific:
Implications for development policy', held at the National Museum ofA ustralia, 5-6 June
2003.
The following issue will mark the International Year of Fresh Waster, and will look
specifically at the relationship between development and access to water, management of
water resources, and conservation of water. If you would like to con tribute a paper to this
issue, please contact us.
Subscriptions
We appreciate your support-without it we would not be able to keep the journal going
as we are fully self supporting. Please renew your subscription when it is due and encourage
your friends and colleagues to become members of the Development Studies Network.
Annabel, Catherine and I wish you interesting reading.
Pamela Thomas
Managing Editor
May2003 3
Introduction: Development policy and
poverty alleviation in China
Pamela Thomas, Development Studies Network, The Australian
National University
c
Over the last 15 years China has made very considerable achievements in reducing rural
poverty. Based on the monetary indicator ofUS$1 per day per person, it is estimated that
the incidence of poverty among the rural poor has declined from 287 million in 1991 to
106 million in 1998. Since the mid 1990s, however, the rate of poverty reduction has
0
slowed and may even have reversed. The following papers outline some of the underlying
physical and political reasons for the decline in poverty reduction and discuss the potential
benefits of new policies for dealing with intractable poverty.
• Recurring themes throughout the discussion are the difficulties in addressing poverty
en through a highly structured, authoritarian and top-down bureaucracy; the limited
knowledge of the concepts surrounding participational development and civil society;
policies and legal structures that disadvantage the very poor; the narrow definition ofw hat
constitutes poverty; the widely held opinion among bureaucrats that the very poor are
en
· ignorant and not able to make decisions for themselves; and the physical barriers to
development posed by extremely poor and eroded soils, lack of water and social services,
most particularly in the western provinces where there are relatively high numbers of
ethnic minority groups. Lack of consideration for public health issues is a recurring theme
in these papers.
::J
Poverty reduction policies and participation
(.) Joe Remenyi and Li Xiaoyun review the history of poverty alleviation·policies in China and
focus on the potential of a new policy that provides a greater emphasis on participational
approaches to analysing and redressing the major causes of chronic poverty. County poverty
en
alleviation planning involves village communities in identifying problems and finding
solutions. This type of planing is new to China, and, as Remenyi and Xiaoyun suggest, the
increased emphasis on participatory, bottom-up procedures implies important changes in
governance at national and local levels that will meet with considerable resistance, as well
•
as bureaucratic inertia. It is hoped that by better targeting of the very poor and poor areas
and by-passing two levels ofg overnment, there will be lower administration and transaction
0
costs and fewer resource leakages. Studies on China's poverty alleviation program show
that poor targeting has resulted in resources intended for the poor have leaked to benefit
others.
Nick Young provides additional information on the role that international organisations
have played in introducing participatory concepts of poverty alleviation into China since
the early 1990s.Although community participation was emphasised in most NGO and
World Bank projects in China, it proved difficult to introduce these concepts into large,
top-down, government-run programs. However, in the last ten years a number of Chinese
development practitioners have emerged who have a strong interest in more participatory
planning for poverty alleviation. They propose a participatory poverty index which includes ·
new indicators for identifying poor communities and househ9lds-these include health,
education, housing, and access to water, as well as the usual economic indicators. Five-year
Village Development Plans will be developed in a participatory manner and incorporated
into overall county development plans. However, there are considerable difficulties in
establishing participatory mechanisms. Chinese bureaucratic culture is steeped in a belief
4 Development Bulletin 61
that peasants are feckless, dimwitted and have no opinions worth to the very poor, and the deterioration in access to education and
considering. This, in part, informs the bureaucracy's history of health services. Credit, which was meant to assist the poor went
seeking technocratic solutions to poverty. instead to county enterprises and private firms in the belief that it
Katherine Morton reviews the growth of civil society in China would provide work for the poor. Taxation policies in China have
and the increasing potential for more participatory poverty tended to benefit the better off to the detriment of the rural poor
alleviation. Although genuine social empowerment will be difficult and policies to alleviate rural poverty have been negated by
to achieve and government support for it is likely to be guarded, government policy. In 200 1 new rural taxation policies shifted an
there is a rapid increase in the number and effectiveness ofNGOs even higher portion of the tax burden onto poor farmers. This is
and self-help organisations. NGOs now represent a major driving exacerbated by their lack of access to credit to buy fertiliser-a
force behind poverty alleviation. Chinese civil society, Morton critical factor in areas where soils are thin and infertile-and an
maintains, is best understood as the continuing consolidation of increasing lack of access to education and health care. This has
social power by the state, tempered by the emergence of an created a downward spiral resulting in entrenched poverty.
autonomous sphere ofs ocial activity. A push for social empowerment The issue ofm icrocredit and microfinance as poverty alleviation
is also coming from within Chinese society as a rising middle class measures are followed up by Bob Frame and Caleb Cheuk-yin
becomes more aware of the need to safeguard individual rights Kwong. Micro finance programs in China are very diverse but fall
and seek legal redress. roughly into two groups-small, usually foreign-assisted programs
that apply international lessons in microfinance to Chinese
conditions and the government's mass delivery of subsidised
Legal issues and poverty alleviation
micro finance to poor households under the 'ba-qt plan. Kwong
Issues of empowerment in the context oflaw reform are discussed provides two case studies, one ofa UND P project in Yilong County
by Stewart Fenwick. He queries the commonly held assumption and the other of the government-run large-scale Shangluo
that rule oflaw is necessary for economic growth or is an essential program, based on the Grameen Bank model. Frame provides
prerequisite to democracy. He reviews the basis on which foreign two case studies from Gansu Province, which look at the major
donors are supporting law reform in China and maintains they are constraints to poverty alleviation.
attempting to introduce law reform 'by stealth'. He gives the example Kwong found that the UNDP Yilong program was successful,
of the AusAID-funded China Capacity Building Program, which especially in providing microcredit to women. However, there
incorporates projects aimed at enhancing personal and business tax were significant institutional obstacles, including the issue of
laws in China and includes capacity building for a central legislative registration of credit providers as civil society organisations. This
review committee and seminars on current tax analysis. In conclusion, prohibits their involvement in all forms of financial services and
he maintains that while the Communist Party dominates political requires that the interest rates charged are equivalent to the
and executive decisions, reform in China will remain contingent · government's subsidised loan program rate of2.88 per cent. This
and limited, and it will be some time before the premise that growth makes autonomous programs economically unviable. The
is sustainable without democracy can be tested. government program, based on the Grameen model, suffered from
Rachei Tolhurst and colleagues undertook research into the inefficiencies and inconsistency between a top-down framework
impact in poor counties of the implementation of the maternal and the participational Grameen model. Staffhad little knowledge
and infant health care legislation, which came into force in June of the process and there has been serious mis-targeting. Overall,
1995, and covers antenatal and peri-natal health. It requires that the smaller UNDP program achieved a similar level of outreach
the state will provide material support to make health services compared to the state-implemented Shangluo program, but a much
more accessible for mothers and children, particularly in poor and higher level of impact and sustainability. It spent only half what
remote areas. The authors found that the law had had little or no the Shangluo program spent in the same period and was much
impact on improving maternal and infant health. They more efficiently run.
recommended that policy makers provide clear financial support
mechanisms to implement the legislation; provide dedicated and
Lack of water and irrigation schemes
qualified staff; encourage performance evaluations that focus on
quality improvement not punishment; that Ministry of Health Frame found that in the very poor counties ofJingyuan and Jingrai
and health departments design more specific regulations, roles the major causes of poverty identified by farmers were lack of
and responsibilities. Without sufficient resources, the law cannot access to irrigation, lack of access to social services and off-farm
be implemented. earning opportunities. There was a considerable need for
micro finance and microcredit, most particularly for small-scale
irrigation projects, yet micro finance was not available for irrigation.
Availability of microcredit and
One of the major constraints to poverty alleviation, especially
microfinance
in the karst region. ofw estern China, is lack ofirrigation. Although
In considering the factors which have entrenched poverty in China, in some areas there is adequate rainfall, moisture is not retained
Jonathan Unger looks at taxation policies, lack of credit available because of limestone substrata. Jonathan Unger considers the
May2003 5
potential benefits ofs mall scale and inexpensive irrigation works. of farming techniques appropriate to local conditions, low carrying
He found that the introduction of irrigation resulted in a doubling capacity, poor infrastructure, and lack of access to credit, markets,
of crop yields during a normal year and that small-scale irrigation education and health care. The top-down approach to planning
schemes in the poor regions of China could pay for themselves in does not allow for farmer's participation. Wang and Duncan discuss
just a few years. However, very few irrigation projects are installed. some of the reasons for the rural-urban income gap and why so
Banks and credit associations are not allowed to make loans for many rural farmers remain in poverty. These include government
irrigation because government is supposed to provide free grants pricing of grain and its policies affecting the domestic grain trade,
for irrigation. However, the number ofg rants made are very limited and China's accession to the World Trade Organization, which
as in the poor regions of China governments have very little money. will require that China opens its food markets to imports and the
Ironically, the irrigation projects that do get funded are those that introduction of a Tariff Rate Quota on major grains.
are relatively large scale, technically 'modern', and require expert
engineering. Unger recommends that donor agencies operating in
China's accession to the World Trade
China should consider giving priority to loans for small-scale
Organization
irrigation waterworks projects. He recommends loans rather than
grants and irrigation loans at commercial rates. In December 2001 China joined the World Trade Organization
Ben Hillman reviews the indicators used to identify poverty (WTO) and will be bound by a number of trading agreements
and discusses the benefits and constraints of China's new 'opening and quotas. To help China prepare for the extensive changes
up' poverty program. The logic behind 'opening-up' is that poor required by an open trading system, Australia has provided support
areas can only rise out of poverty through increased markets and that would lead to 'an increased appreciation by Chinese officials
income generating opporrunities. Hillman argues that this approach across the range orf trade and economic agencies involved, of the
makes the assumption that the poor just need more money in rights and obligati<;>ns which membership of the WTO provides,
order to make ends meet when, in reality, if they are to participate with an increased awareness of the benefits ofo pen trading systems'.
in the market economy they need education, training and Gus Hooke discusses the AusAID-funded Economics and Foreign
reasonable health, and projects need to built on indigenous Trade Training (EFTT) project, and how accession to the WTO
knowledge. Instead, projects are given to outside contractors who and to new foreign trade and investment regimes and the resulting
bring their own skilled labour teams with them. By. prioritising globalisation of the Chinese economy are likely to impact on rural
rural infrastructure and economic growth, health and education poverty. Hooke maintains that if the income of farmers is to be
have suffered. To escape poverty, the poor need greater investments increased and total farm income can be raised only marginally,
in social and human capital. In Hillman's opinion, China's 'opening poverty-reduction policies must place emphasis on reducing farm
up' policy will not substantially improve the battle against poverty. populations-a trend that has been particularly strong in China
over the last ten years.
Agriculture, farming and poverty
Poverty and HIV/AIDS
Rural poverty in China is often closely related to severe
environmental degradation. This is particularly the case in Jane Bell reviews the situation ofHIV/AIDs in China and current
mountainous regions. In an attempt to deal with the ecological efforts to address its spread. The major means of transmission
problems related to sloping land the Chinese government identified are fairly closely related to poverty and to the provinces
established the Sloping Land Conversion Program, which aimed where there are high levels of poverty. There appears to be a link
to convert large areas of farmland on steep slopes back to forest or between poverty, ethnic minorities and HIV Poor provinces with
grassland. Ben Hillman discusses the possibly negative long-term high levels ofHN/AIDS, such as Yunnan and Xinjiang, also have
impact of the program on poverty. high numbers of people from ethnic minority backgrounds.
Li Ou and Xiaolu Wang and Ronald Duncan discuss the role Yunnan, with 19 minority groups, has the highest reported HN
of agriculture in poverty reduction. Li reviews trends in agriculture positive rate in China. The major routes of transmission are from
and rural development and the increasing disparity in income and illegal blood collection - many poor farmers sell blood -
living standards berween urban and rural families. Most of the intravenous drug use and commercial sex work. Prostitution is
rural people living in poverty are farmers. In China, although in widespread in China and on the increase among poor rural women.
the last 20 years more than 200 million farmers moved out of Overall, the problem is one of unemployment, poverty and relative
agriculture, more than 60 per cent of the population lives in rural poverty.
areas and more than 50 per cent of the nation's labourers are
engaged in agriculture. However, rapid industrialisation has meant
Conclusion
that a once agriculture-dominated economy is now industry
dominated. From 1952 to 2001, the agricultural contribution to The following papers suggest that while China has been extremely
GDP declined from 51 to 15 per cent. Li found that the major successful in reducing the level ofp overty, it is now facing difficulties
constraints on farmers' incomes include high taxes and levies, lack in maintaining those who have climbed above the poverty line
6 Developmenr Bullerin 61