The Study About Poverty Reduction Mechanism Of Gansu Rural From The Perspective Of Economic Growth

Since more than30years of Reform and Opening-up, China’s continued rapid economic growth has greatly promoted the reduction of rural poverty, the rural poor dropped from260million in1978to14.79million in2007, and the rural poverty rate reduced from32.9%in1978to2.0%in2007. Although economic growth has resulted in striking poverty reduction achievements, there is still a high proportion of poor headcounts. The economic growth in new era has brought new forms and new characteristics of rural poverty, therefore, the issues of rural poverty have been transformed from large areas of poverty widespread in rural areas into a point-like poverty centralized or scattered toward the mid-west, remote and backward areas. Gansu, as such one of the provinces referred to economic development lags and comparatively deeper levels of poverty, needs to solve the tough problem of poverty. From the perspective of economic growth, therefore, Gansu is taken for an example to explore and study the transformation problem of the rural poverty, which carries quite a strong practical significance.This paper uses Gansu data to study the relations between Gansu’s economic growth and its changes in rural poverty since the period of Reform and Opening-up and explores how the economic growth promotes rural poverty reduction with some certain mechanisms and further influences the effectiveness on poverty reduction combining the methodology of theoretical analysis and empirical analysis. First, it uses empirically analyzes economic growth of Gansu Province impacts on its rural poverty changes from the three insights on influence direction, degree of influence and influence trends. The Least Squares Method is used to verify a negative relation between the economic growth in Gansu and rural poverty rates and make a conclusion in economic growth being an important factor in rural poverty reduction in Gansu. Furthermore, with the poverty change decomposition method we analyze specifically the impact of economic growth on poverty reduction. While introducing the poverty elasticity index, we show the rural poverty variable trend in Gansu’s economic growth through the simulation of the Lorenz curve. In addition we focus on poverty reduction mechanism in economic growth and study how economic growth affects the reduction of poverty in rural areas through income growth, agricultural development, non-farm employment, funding for poverty alleviation and human capital etc. Finally, through the evaluation on the impact of economic growth on poverty reduction in Gansu, a conclusion is made that the economic growth is the most important factor in rural poverty reduction whereas its impact on poverty reduction shows obviously the trend in diminishing marginal returns. Then we make the reasoned analysis for this result, and put forward relevant policy recommendations.