Are China's poor better off?

Not everyone in China is benefiting from the economy's stellar growth, according to a new World Bank report. FT Beijing correspondent Richard McGregor reports that China’s poorest worse off after boom

China’s poor grew poorer at a time when the country was growing substantially wealthier, an analysis by World Bank economists has found. The real income of the poorest 10 per cent of China’s 1.3bn people fell by 2.4 per cent in the two years to 2003, the analysis showed, a period when the economy was growing by nearly 10 per cent a year. Over the same period, the income of China’s richest 10 per cent rose by more than 16 per cent.

“Preliminary analysis on Chinese data indicates that average income of the bottom decile went down slightly between 2001 and 2003, whereas all other income categories saw significant increases,” said Bert Hofman, the bank’s lead economist in China. “Our analysis suggests that a considerable number of people below the poverty line were hit by an income shock – they only kept up consumption by spending their savings.”

The findings challenge the basis of government policies aimed at narrowing the country’s politically sensitive wealth gap. ...China, which had relatively even income distribution in 1980 when it embarked on market reforms, is now “less equal” than the US and Russia, using the Gini co-efficient, a standard measure of income disparities.

...The fall in income for the poor cannot be explained by declining farm incomes, as food prices were rising at a faster rate than urban prices in December 2003. Over the period that the study covers, inflation was low and in one year, 2002, negative.

The findings challenge the basis of government policies aimed at narrowing the country’s politically sensitive wealth gap. Hu Jintao, China’s president, who came to power in 2002 and is likely to win a second five-year term next year, has made narrowing the gap between rich and poor a centrepiece of his administration’s economic policies.

China, which had relatively even income distribution in 1980 when it embarked on market reforms, is now “less equal” than the US and Russia, using the Gini co-efficient, a standard measure of income disparities.

The Wall Street Journal also reported the findings today: In China, Growth at Whose Cost? The story, by Andrew Batson and Shai Oster, points out that "the poorest of the country's 1.3 billion people are getting even poorer."

From 2001 to 2003, as China's economy expanded nearly 10% a year, average income for the poorest 10% of the country's households fell 2.5%, according to an analysis by the World Bank that has been presented to the Chinese government. Those roughly 130 million Chinese earn $1 a day or less, the World Bank's global benchmark for poverty.

Meanwhile, the nation's total income rose sharply, and other income groups saw gains, suggesting that the rich are getting richer at the expense of the poorest.

The reason for the income decline at the bottom isn't clear. The World Bank hasn't completed its analysis and its conclusions haven't been published. Even so, the data call into question an economic model that economists have held up as an example for other developing nations.

"This finding is very important. If true, it sheds doubt on the argument that a rising tide lifts all boats," said Bert Hofman, the World Bank's chief economist in China.

...The World Bank's Mr. Hofman says the bank's analysis shows the majority of China's poorest 10% appear to be only temporarily poor, thrown down by some setback like sudden illness, the loss of a job or the confiscation of land. That suggests that a basic social safety net, like medical insurance or unemployment benefits, could help move them back out of poverty. Only about 20% to 30% of the poorest appear to be long-term poor, and even they have some savings.

Unfortunately I have not been able to find the report on the main World Bank website, or their China website. If anybody can send me a link, I'd appreciate it.

UPDATE: Dave Altig at Macroblog has also posted on this report. He comments:

Temporary bouts of economic hardship are clearly a much different thing than persistent poverty traps.  And if, in fact, poverty is predominantly transitory, we should perhaps be more circumspect about declaring that a rising tide fails to raise all boats.

China’s poor grew poorer at a time when the country was growing substantially wealthier, an analysis by World Bank economists has found. The real income of the poorest 10 per cent of China’s 1.3bn people fell by 2.4 per cent in the two years to 2003, the analysis showed, a period when the economy was growing by nearly 10 per cent a year. Over the same period, the income of China’s richest 10 per cent rose by more than 16 per cent.

“Preliminary analysis on Chinese data indicates that average income of the bottom decile went down slightly between 2001 and 2003, whereas all other income categories saw significant increases,” said Bert Hofman, the bank’s lead economist in China. “Our analysis suggests that a considerable number of people below the poverty line were hit by an income shock – they only kept up consumption by spending their savings.”

The findings challenge the basis of government policies aimed at narrowing the country’s politically sensitive wealth gap. ...China, which had relatively even income distribution in 1980 when it embarked on market reforms, is now “less equal” than the US and Russia, using the Gini co-efficient, a standard measure of income disparities.

...The fall in income for the poor cannot be explained by declining farm incomes, as food prices were rising at a faster rate than urban prices in December 2003. Over the period that the study covers, inflation was low and in one year, 2002, negative.

The findings challenge the basis of government policies aimed at narrowing the country’s politically sensitive wealth gap. Hu Jintao, China’s president, who came to power in 2002 and is likely to win a second five-year term next year, has made narrowing the gap between rich and poor a centrepiece of his administration’s economic policies.

China, which had relatively even income distribution in 1980 when it embarked on market reforms, is now “less equal” than the US and Russia, using the Gini co-efficient, a standard measure of income disparities.

The Wall Street Journal also reported the findings today: In China, Growth at Whose Cost? The story, by Andrew Batson and Shai Oster, points out that "the poorest of the country's 1.3 billion people are getting even poorer."

From 2001 to 2003, as China's economy expanded nearly 10% a year, average income for the poorest 10% of the country's households fell 2.5%, according to an analysis by the World Bank that has been presented to the Chinese government. Those roughly 130 million Chinese earn $1 a day or less, the World Bank's global benchmark for poverty.

Meanwhile, the nation's total income rose sharply, and other income groups saw gains, suggesting that the rich are getting richer at the expense of the poorest.

The reason for the income decline at the bottom isn't clear. The World Bank hasn't completed its analysis and its conclusions haven't been published. Even so, the data call into question an economic model that economists have held up as an example for other developing nations.

"This finding is very important. If true, it sheds doubt on the argument that a rising tide lifts all boats," said Bert Hofman, the World Bank's chief economist in China.

...The World Bank's Mr. Hofman says the bank's analysis shows the majority of China's poorest 10% appear to be only temporarily poor, thrown down by some setback like sudden illness, the loss of a job or the confiscation of land. That suggests that a basic social safety net, like medical insurance or unemployment benefits, could help move them back out of poverty. Only about 20% to 30% of the poorest appear to be long-term poor, and even they have some savings.

Unfortunately I have not been able to find the report on the main World Bank website, or their China website. If anybody can send me a link, I'd appreciate it.

UPDATE: Dave Altig at Macroblog has also posted on this report. He comments:

Temporary bouts of economic hardship are clearly a much different thing than persistent poverty traps.  And if, in fact, poverty is predominantly transitory, we should perhaps be more circumspect about declaring that a rising tide fails to raise all boats.

Comments

[travesti video]

istanbul hotel conrad
This article is very beautiful, I really get very beyendım text files manually to your health as you travesti very beautiful and I wish you continued success with all respect ..

Thanks for helpful information travesti siteleri you catch up us with your sagol instructional çok explanation.
en iyi travestiler en guzel travesti

travesti
istanbul travestileri
ankara travestileri
izmir travestileri
travestiler
trv
travesti siteleri
travesti video
travesti sex
travesti porno
travesti
travesti
travestiler
travesti
travestiler
sohbet
chat
organik
güncel blog

[pandora jewellery]

Interesting perspective on India ... thanks!

[Maria]

Çilek sex shop Mağzamızda En Kaliteli sex ürünleri, sex oyuncakları şişme bebek ve erotic shop erotik giyim Ürünlerini Bulabileceğiniz Gibi Ayrıca, penis büyütücü, geciktirici, Bayan Uyarıcı, Ürünlerde Temin Edebilirsiniz. 1994 ten Bu Yana En Kaliteli Orjinal Erotik Ürünlerini Sağlamakta Olan Çilek Erotik Shop ta Tüm Cinsel Ürünleri Bulabilirsiniz

[VimaX]

I am thoroughly convinced in this said post. I am currently searching for ways in which I could enhance my knowledge in this said topic you have posted here. It does help me a lot knowing that you have shared this information here freely. I love the way the people here interact and shared their opinions too. I would love to track your future posts pertaining to the said topic we are able to read.

[Asics Tiger]

You can share some of your article, I'm like you write something, really very good! I will continue to focus on

[MBT Shoes]

Thankyou for a very entertaining and enlightening piece. It definitly opened my eyes to allot of things I had not thought of before.

[Asics Tiger]

I agree with you ,your saying is very good!