1.1 Poverty reduction in China’s rural areas before 1985

1.1.1 Poverty reduction in China’s rural areas before 1978[1]

In the early days after the founding of the People’s Republic of China in 1949，almost all rural areas were severely hit by poverty because of outdated technology and the fact that a large number of farmers had no or only a small patch of land as a result of enduring wars and relatively concentrated landholding.In order to change the situation，a priority in government institutions and policies was given to reducing and alleviating poverty.The Chinese government launched a series of programs including land reforms，cooperatives and the people’s communes to narrow the gap between resource holding and personal income.Although no poverty reduction plan was put forward before the reform and opening-up，a host of institutions，policies and plans，directly or indirectly，were targeted on alleviating poverty and rich-poor polarization which prevailed in China rural areas.

From 1949 to 1978 （the period before the reform and opening-up），the Chinese government had mainly taken the following measures to reduce rural poverty.

1.1.1.1 Rural residents were granted more and improved rights to possess and use land （natural resources）

The occupation of land in China rural areas was uneven before the founding of the People’s Republic of China in 1949.According to statistics，landowners who accounted for only 4 percent of total rural residents，occupied 50 percent of arable land，while poor peasants and farm laborers only took up 17 percent despite that they represent 70 percent of total rural households.Since 1949[2]，land reform took place nationwide，by which land was confiscated from former landlords and redistributed to landless peasants and owners of small plots.The reform introduced peasant landownership.As a result，the uneven occupation of land among different classes in rural areas almost disappeared by 1952[3].Landlessness，which underlay rural poverty in many developing countries，was no longer a problem in China，thus creating a favorable property system necessary for the success of the following development-oriented poverty alleviation program.Since mid-to-late 1950s，rural residents’ occupation of land was first transferred to cooperatives，then collectively granted to people’s communes，production brigades and production teams.Although reforms of production relations in rural areas brought about several changes concerning peasants’ right to control，manage and use land，legally speaking，rural residents were always co-owners of the land possessed by the community they were in.

1.1.1.2 Infrastructure in rural areas was improved

From 1950s to mid-1970s，by virtue of its effective control of resources and a large lead in terms of land occupation and manpower utilization amassed through collectively ownership，the Chinese government carried out massive infrastructure construction in rural areas throughout the country to ameliorate water conservation facilities and public transportation.During this period，national highway mileage increased 9 times while irrigated areas mounted 125 percent.

1.1.1.3 Education and health care facilities were improved in rural areas

From 1949 to 1978，China saw a 1.6-times increase in its number of primary schools and a 28-times surge in that of middle schools.Primary school enrollment rate ramped up from less than 50 percent to 96 percent.The government established a rural health care system that depended on paramedics called “barefoot doctors”，and ameliorated and built over 50 thousand hospitals in different towns and 600 thousand village clinics that covered 68.8 percent of villages nationwide.Although China’s economy was still in bad shape，all these efforts greatly popularized the prevention and control of infectious，endemic，occupational and parasitic diseases，enhanced health care in underserviced areas，and improved the physical health of the rural population[4].

1.1.1.4 A social security system based on rural collective economy was established

The Chinese government established the “Five Guaranteed Households” social security system based on collective rural economy，by which food，clothing，medical care，housing and burial expenses of people who lost ability to work were taken care of or subsidized by the government.For extreme poverty caused by natural disasters or other reasons，relief was also provided by the government.In addition，rural families with semi-able-bodied workers，the disabled and weak labor were taken care of by production teams，arranging them to do some relatively light work in order to ensure their basic needs.Despite its low level and limited coverage，the social security scheme at that time still played a critical role in rural poverty and famine reduction and social order stabilizer.

1.1.1.5 Agricultural techniques were popularized by network building

In this period，China built networks covering villages （then called production teams） to popularize agricultural techniques including improved varieties，fertilizers，pesticides，agricultural machinery and seeds and soil improvement，which greatly boosted productivity in rural China.As a result，in 1978，grain yield per unit area increased by 1.46 times compared with that in 1949.

Meanwhile，poverty alleviation in this period was also powered by rural credit cooperatives，supply and marketing cooperatives and the family planning policy across the nation.

Owning to the above significant policies and measures，rural livelihood in China saw apparent improvement.From 1949 to 1978，China’s total grain output increased by 1.69 times[5]；Caloric intake for rural population mounted by an average of 20 percent[6]；the proportion of rural residents without enough to eat and wear declined from 80 percent to 30 percent[7]；infant mortality rate was down by 75 percent，while life expectancy increased by nearly 30 years[8]. However，according to the current poverty line （the annual net income per capita being less than 2300 yuan against the price level in 2010），China would have 770 million rural residents living in poverty in 1978，which means Poverty headcount ratio would be as high as 97.5 percent[9].

Box 1：Changes in China’s rural poverty line

Since 1978，central government has adopted 3 rural poverty lines in different periods of time，namely，the 1984 Standard，the 2008 Standard and the 2010 Standard.

The 1984 Standard，put forward by the State Council’s leading group on economic development in impoverished areas，defines “poverty” as annual per capita income of less than 200 yuan against the price level in 1984.That was a living standard of low level，which guaranteed a food expenditure of 2100 kcal per person per day.Expenses on food accounted for about 85 percent of one’s total expenditure.Based on the actual situation in rural areas，food demand was of relatively low quality，as exemplified by the high proportion of coarse grains in staple foods and the low proportion of meat and eggs in non-staple foods.In addition，food expenditure took up a high proportion in the standard，which means that people could spare almost no money for other activities.

The 2008 Standard，called “low income standard when it was adopted in 2000”，was officially used as a poverty line in 2008，hence its name.It defined “poverty” as annual per capita income of less than 865 yuan against the price level in 2000.According to this standard，the least caloric intake per capita per day was still 2100 kcal，but non-food expenditure increased appropriately，reducing food expenditure to 60 percent.Against the background of that time，this standard could basically ensure people’s basic living needs for food and clothing.

Figure 1-1 Number of poor population （1978-2015）
Note：Poor population gauged by 1984 Standard was reduced from 250 million in 1978 to 14.79 million in 2007.Poor population gauged by 2008 Standard，decreased from 94.22 million in 2000 to 26.88 million in 2010.Poor population gauged by 2010 Standard sit at 55.75 million in 2015.
Source：Xian Zude，Wang Pingping，Wu Wei，“Rural Poverty Lines and Poverty Monitoring in China”，Statistical Research，2016，No.9.

The 2010 Standard is the currently used poverty line.It defines “poverty” as annual per capita income of less than 2300 yuan in constant 2010 prices，or 2800 yuan and 2855 yuan against 2014 and 2015 price levels respectively.This Standard took into account the basic requirements and key indicators for poverty alleviation，namely making sure rural poor people are free from worries over food and clothing （“two assurances”） and have access to compulsory education，basic medical services and safe housing （“three guarantees”） by 2020.According to the survey results of national households，on condition that the “three guarantees” are achieved，food expenditure in the current poverty standard can allow the consumption of 500 grams of rice or flour，500 grams of vegetables，50 grams of meat or 1 egg every day gauged by composite average price of agricultural products，with an intake of 2100 kcal of calories and 60 grams of protein to meet people’s daily needs.Meanwhile，the proportion of non-food expenditure in the current standard is also on the rise，reaching 46.5 percent in 2014.For those living in alpine and severe cold regions，poverty line is 1.1 times higher than the standard in real calculation.