A Study On Rural Poverty, Income Distribution And Anti-poverty Policies In China

In the past 30 years, China's rural poverty alleviation has achieved great efforts. If calculated in accordance with the official poverty standard, rural poverty rate dropped from 30.7% in 1978 to 1.6% in 2007 and the number of rural poor dropped from 250,000,000 to 14,790,000. It is unprecedented for the whole world that so many people were out of poverty in such a short period of time. World Bank studies have shown that without China's poverty alleviation efforts, the world's poor population won't decline. However, in China's reform and opening process, income distribution and the nature of poverty have taken place fundamental changes. Most studies have shown that rural China's income distribution has worsened and seriously affect the poverty alleviation progress. The latest World Bank study shows that anti-poverty work in China's rural areas will become more difficult and complicated. Therefore, the study of rural poverty, income distribution and anti-poverty issue has significant theoretical and practical meaning. The paper mainly analyze from rural poverty and inequality measurement, evaluation of anti-poverty policies and the characteristics & trends of poverty alleviation processing.The first part of the paper measured poverty and inequality in rural areas from different angles. The paper uses seven different poverty line and three different equivalent operator family poverty to perform Lorenz curve for Lorenz dominance analysis, a variety of inequality indices for comparative analysis, poverty indicator analysis and decomposition analysis on changes of poverty and income inequality. It was found that, 1 Whether or not to consider the family economies scale effect, with the Lorenz curve moving to the lower right corner rural China's income inequality has been worsening since the 80's in 20^th century. 2 In 1980 - 2006, allocation of the high-income group and low-income group is in dramatic changes and the fluctuations degree of inequality is intensified than middle-income group, that is, the polarization trend of income distribution is obvious. 3 The poverty line and equivalence scale has no impact of the changes in the direction of the poverty index. To calculate the poverty index according to different poverty line show that the absolute gap is narrowing; poverty index value from high poverty line and its fluctuation are larger than low-poverty line. There is no impact of family equivalent size in rural China. 4 Poverty decomposition analysis shows that average income in rural areas increased since 1980 but income inequality also increased. And the poverty reduction from income growth is not sufficient to offset the poverty increase from the inequality, that is, the expansion of income allocation gap reduces the effect of poverty alleviation from the growth.The second part of the paper focus on the evaluation of anti-poverty policies in rural areas of China. On the basis of summarizing the characteristics of rural poverty, this chapter mainly analyze the characteristics and reasons of rural anti-poverty policies processing by dividing the anti-poverty policies in rural areas of China into four phases as relief of poverty alleviation policies, development of poverty alleviation stage, focus participation and poverty alleviation for both inside & outside policies, diversification of poverty alleviation. Through these analysis, we believe that next step of rural anti-poverty should be the "three adhere to" (that is adhering to solving adequate food & clothing and stabling this at the same time; insisting that directly benefit the poor), doing a good job of "three keys" (that is, promotion of the whole village, training to enhance transfer of the labor force and the industrialized poverty alleviation).The third part of the paper focus on the characteristics and development trend of China's rural poverty reduction process. First on the basis of poverty decomposition, the paper uses the dynamic characteristics of poverty flexibility to discuss how income growth and allocation impact the poverty alleviation from a theoretical and empirical point of view. It was found that, 1 in the economic development, the higher the level of average income the stronger the poverty effect caused by income inequality. 2 The more serious the income inequality the slower of poverty reflection from income inequality. 3 1998 is the inflection point of changing nature of anti-poverty in rural China. The paper recommends that in future the focus of anti-poverty policies in rural areas should change from the development style which to promote income growth to the social protection style which to improve income distribution. In addition, in order to rapidly achieve poverty alleviation goal, we should implement pro-poor economic development policies.The final part of the paper use the threshold panel data model to empirically study the mechanism and relationship characteristics of how trade liberalization impact China's rural poverty. It was found that trade liberalization mainly impact rural poverty from the economic growth, employment, wages and price level channels. In addition, there is a non-linear inverted U relationship between trade liberalization and the urban poverty. Its policy implications is that our country should continue to expand the scale and level of foreign trade, so that the majority of people can fully enjoy the outcome of the reform and opening then are out of poverty.The main contribution of the paper are: 1 the use of different indices of poverty and inequality, as well as the different standards of measurement of the poverty line in rural poverty and inequality, to determine and understand the breadth, depth, intensity & trend of rural poverty. 2 detailed calculations of the typical curve of income distribution in rural provinces and its evolution characteristics, to explore the economic development model in each region. 3 Construction of a consolidated analysis frame to analyze the relationship between economic growth, income distribution and poverty reduction process.