China Rural Poverty

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China Rural Poverty

After Deng Xiaoping took over the power, he imposed a lot of policies to change the economic, social and political structure. The first thing that Deng insisted to do was to improve the economic growth. But the lack of concern with the rural area brings China the decline in output and income of the peasants which widened the gap between the coastal and interior areas. In the articles "Economic growth, income inequality and poverty in China under economic reforms", the author described the improvement under Deng's policies. In "Reducing Absolute Poverty in China", fundamental problems in education and health care aspects which remained unsolved were introduced. During these few years, the government put a great effort in minimizing the rural poverty situation and there was a significant change in the rural area. There was no doubt that China has improved from time to time, although rural poverty is always a problem for the government, they start to have better plans to implement compare to the Mao and Deng eras.

Yao's article, "Economic growth, income inequality and poverty in China under economic reforms", analyzed the failure of the Deng's policy. Because most poor people lived in the rural areas, Deng decided to reform agriculture first before reforming the urban and industrial sectors. The household production responsibility system was introduced. This system allowed farmers to keep a certain proportion of outputs after fulfilling a production quota set by the production team1. This method would be able to provide a better incentive for the peasants to work harder since now, they could get their own reward, the proportion of the production. Also, the government could still guarantee they would get the standard amount from the peasants, therefore, it seemed to be beneficial to both sides. Grain output increased from 305 to 407 million tons between 1978 and 1984. Real per capita income more than doubled, rising by 14.9 per cent per year2. Since the reform seemed to be very successful, they began to reform the state-owned enterprises. Mao's doctrine had put a lot of ideological barriers on the economic policies and it was time to break all those. Major reform methods were introduced to raise enterprise accountability and autonomy with a flexible wage system to link work efforts with rewards more directly for individual workers3. Although existing state-own enterprises were not privatized and they would be benefited from state budgets, non-state enterprises such as private and collective sectors got a lot of advantages as well. In order to increase the agricultural output, the government encouraged the rural peasants to work hard by giving peasants more capital, establishing better incentive systems, allowing greater freedom of crop selection, changing the structure of the administration of agriculture4. The agricultural production seemed to be ameliorated during the early 1980s. In the rural areas, non-farm enterprises, particularly the township and village enterprises (TVEs) quickly developed to become a new economic force. In 1992, TVEs employed more than a quarter of the total rural labour force and contributed about 40 per cent of per capita rural income5. There was no doubt that these policies had contribution to a great amount for improving the poverty situation, it had not solve the fundamental problems for the poverty.
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In the article "Reducing Absolute Poverty in China", the authors described poverty problem stepped backward after a short improve. During the second half of 1980, a few economic policies such as the increase in prices for grain and the rapid growth of the working-age population . The population exceeded the expansion of employment opportunities, created a worsening of rural underemployment from 1989 to 1990. Since the official government did not want to put as much subsidy on the farming projects, the costs for production increased quickly while the income from production remained the same. Officials tried to attract ...

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