Four takeaways from China's poverty alleviation drive
Which lessons have China learned from its successful battle against poverty? New China Research, the think tank of Xinhua News Agency, released a research paper on Sunday to shed light on the rationale for China's anti-poverty drive, including the following four conclusions:
OPTIMAL DISTRIBUTION MAKES DEVELOPMENT BETTER FOR POVERTY REDUCTION
The practice of poverty alleviation around the world has proved that economic development alone does not necessarily equate to poverty eradication. Wealth has been snowballing, but poverty has become increasingly like a fortress. How should we solve this huge imbalance? The answer is optimal distribution.
"You make a cake to divide it, and dividing it properly will promote the baking of a bigger cake." This clear logic runs throughout the history of poverty alleviation in China.
China's basic economic system sees public ownership play a dominant role with diverse forms of ownership developing side by side. It allows China to continuously explore new paths of "optimal distribution."
China has also benefited greatly in this process. By seizing the most important relationship between distribution and production, China has achieved a medium-high rate of economic growth in tandem with the elimination of absolute poverty, and has laid a solid foundation for future high-quality development.
GOVERNMENT AND THE ENHANCEMENT OF PRO-POOR TRAITS
Under the market economy, the market plays a decisive role in the allocation of resources and is an important force in poverty alleviation. However, the market allocation of resources is based on the principle of efficiency. Poor areas and poor people are often unable to participate in the market effectively or even excluded from the market altogether due to their remote geographical location, backward infrastructure and insufficient development capacity, and thus are in a weak position in the overall distribution pattern.
"Capable governments" are needed to adjust the primary distribution and create a more efficient redistribution. In addition to the advantages of top-level design to mobilize, organize and guide poverty alleviation, the government can also influence the allocation of resources by improving their mobilization and availability.
The main means are to increase the supply of public services, improve the precise allocation of poverty alleviation resources, introduce pro-poor policies, stimulate social investment, and promote the transfer of asset returns in order to increase opportunities for impoverished communities and individuals to access the factor and product markets and reduce risks and vulnerability.
PRO-POOR MARKET ACTIVATES POTENTIAL FACTORS OF PRODUCTION IN POVERTY-STRICKEN AREAS
Under a pro-poor market mechanism, trading barriers are continuously broken, trading links are continuously ironed out, and transaction costs are continuously reduced, thus creating favorable conditions for production and unleashing productivity in poverty-stricken areas.
A "winning formula" in China's poverty alleviation efforts was holding onto positive dialectical thinking and improving the pro-poor market mechanism under the guidance of the government. Meanwhile, the "burden" of poverty has been turned into a source of potential, and human and natural resources in poor areas have become a means to achieve common development and prosperity. At the same time, the Chinese government, through funding, resources and services, among others, has implemented precise measures to help poor individuals who have the ability to work cross the market threshold and complete the transformation from a natural person to a "market person."
OPTIMAL DISTRIBUTION MAKES POVERTY REDUCTION BETTER FOR DEVELOPMENT
Poverty alleviation has helped the "unified national market" in China expand capacity, providing new drivers for the economic cycle. By improving infrastructure and technological innovation, poor areas are better able to integrate into the market, open up and accept market resources from outside regions, and increase their production capacity.
The participation in the market by those living in deep poverty has increased in depth and scope, their labor skills have improved, and their ability to reduce poverty has grown. Income growth has expanded, and those living in poverty have successfully achieved a higher rate of income growth than that of society as a whole.
Their increased consumption capacity and demand as well as income growth are directly projected into market activities, promoting production and exchange, and creating realistic conditions for optimal distribution.