China poverty reduction:Much achieved,much could've been avoided

July 05, 2021 11:05
Photo: Xinhua

In a speech marking the 100th anniversary of the founding of the Chinese Communist Party, its current leader, Xi Jinping, announced the realization of the party’s goal of “building a moderately prosperous society in all respects,” a goal first enunciated by Deng Xiaoping in the late 1970s when China’s economic reforms were launched.

“This means,” said Xi, who is also president and commander in chief, “that we have brought about a historic resolution to the problem of absolute poverty in China, and we are now marching in confident strides toward the second centenary goal of building China into a great modern socialist country in all respects.” That is in reference to 2049, the centenary of communist rule.

China’s successes in battling extreme poverty have been widely recognized. Five years ago, Philip Alston, the United Nations special rapporteur on extreme poverty and human rights, in an end-of-mission statement, termed the lifting of hundreds of millions of people out of poverty “a staggering achievement.”

President Xi had set 2020 as the deadline for the total elimination of absolute poverty and the party and government are claiming success.

However, while the lot of many Chinese has been improved, the situation needs to be put in context.

Bill Bikales, a development economist who served as Resident Economist for the United Nations Resident Coordinator in China, published a study last month, "Reflections on Poverty Reduction in China," in which he says “much of the poverty reduction in the first years after 1978 was simply a result of reversing bad Maoist policies....One recent estimate is that two-thirds of the poverty reduction in the first decades after Mao was simply catching up to where China should have been if better economic policies had been followed before 1978."

This, while shocking, was foreshadowed in a 2018 book, “China’s 40 Years of Reform and Development, 1978-2018,” by Ross Garnaut, Ligang Song and Cai Fang, which reported: “In 1952, China’s per capita GDP was $538 in 1990 prices. This was 8.7 per cent of the average of the rich countries, 46.5 per cent of the ‘others’ and 23.8 per cent of the world average. By 1978, China’s per capita GDP ($978 at constant price) had fallen as a percentage of each of those three groups, to 6.8 per cent, 42.1 per cent and 22.1 per cent, respectively."

This means that in the first three decades of the People’s Republic, China not only missed the chance to catch up with the developed countries, but actually fell further behind the rest of the world.

While countries around the world were growing their economies in the postwar decades, China was falling further behind.

The reason: Mao Zedong and his obsession with ideology. He would not let farmers in China do what their counterparts were doing around he world, which was to work the land and sell the fruits of their labor to feed their families. Instead, the party, led by Mao, would not allow private farming from the late 1950s, taking away the incentive of farmers to work. The party in the early 1950s gave peasants land seized from landlords and, in the late 1950s, took that land away.

So Deng’s reforms were, to a large extent, undoing Mao’s policies.

At the third plenary session of the party’s 11th central committee held in December 1978, a communique called for the party to shift the emphasis of its work beginning in 1979 to “socialist modernization” and turn China from a backward state into a “great, modern socialist power.”

Ironically, the resolution adopted at the plenum explicitly prohibited any type of household-based farming arrangement. This shows that even reformers were at the time opposed to some of the most basic economic reforms needed.

Indeed, even Deng himself was immersed in the ideological ethos that characterized the party from the 1950s on. Fortunately, he was willing to keep an open mind and “seek truth from facts.” After he became convinced that family farming was what the people themselves wanted and would significantly increase output, he agreed.

So, while it is true that the last four decades have seen almost miraculous growth in China, how much more would have been achieved if the focus on growth had started in 1949 rather than 1979? Tens of millions of people would not have starved to death; a whole generation would not have been sacrificed in a social experiment on collectives. Absolute poverty would have been much less of a problem. What a pity.

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Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.

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