At the beginning of the month, The World Bank released its 2016 Poverty and Shared Prosperity report. And Chinese state-run media ate it up. Why? Let’s just say, it made China look pretty good.
According to the World Bank report, since 1990, worldwide extreme poverty fell from 35% to less than 11% today. And most of that change is from China, which has a fifth of the world’s people. According to the report, since 1978 China “has lifted more than 800 million people out of poverty.”
Even Westerners interviewed by Chinese state-run media agree.
Yes, this British guy was so deeply moved that he moved to China, got a cushy job at Renmin University, and now writes articles about how China’s economic model is so much better than what we have in the West.
But I actually agree with him on one point: It’s a good thing that so many Chinese people are no longer living in poverty. He just didn’t tell you the terrible catch.
Just because those 800 million people aren’t living in poverty doesn’t mean they’re doing great. The World Bank defines poverty as “the international poverty line of a dollar ninety per person per day.” In other words, if you make a dollar and ninety one cents per day in China, you’re counted as having been lifted out of poverty. You’re now called low-income.
And according to the Pew Research Center, China still has about 900 million people who are low-income—people who make more than $1.90 but less than $10 a day. That’s a day, not an hour. A day.
So while the version of China you see in the media looks like this, with sparking skylines and weird buildings, that’s just the part they want you to see. Most of China looks more like this:
So the great majority of people in China are still really, really poor. Just not in “poverty.” Thus, the Communist Party can brag about lifting people out of poverty, and still be technically correct. They’ve clearly been reading Derrell Huff.
And along with those 900 million really, really poor people, there is still a huge number of people living in technical poverty. For example, the 82 million who make less than a dollar a day. So the equivalent population of the entire Western United States is still living on less than a dollar a day in China.
But the Communist Party chooses to focus on the positive. The people they’ve lifted out of poverty. It’s just that the Communist Party maybe shouldn’t get all the credit.
I mentioned that the World Bank said that since 1978, more than 800 million people in China have been lifted out of poverty. But what happened before then?
Well, “for a long part of history, China was the largest and most advanced economy in the world.” That’s according to the World Bank. In 1820, China had 33% of the world’s GDP. In fact, during the 1600s through early 1800s, the world so admired China that the Europeans were making knockoff Chinese goods. They called it chinoiserie.
Fast forward through two opium wars, the Taiping Rebellion, the collapse of the Qing Dynasty. And just when the Nationalist government was starting to rebuild the economy, there was the communist insurgency, followed by World War II. At the end of World War II, China was in shambles. And the civil war between the Communist Party and the Nationalist government started up again almost immediately. In 1949, Mao Zedong took over the country. And the first thing he did was kill one or two million landlords and other wealthy people who may or may not have been a threat to his power.
And for the next 30 years, the Communist Party completely, utterly wrecked what remained of the Chinese economy, with insane policies like forcing farmers to make useless steel in their backyards instead of harvesting their crops. Tens of millions of people starved to death. And most of the survivors lived in poverty for decades. Plus Mao’s Cultural Revolution threw the country into further chaos.
But then Mao died, his yellowing corpse put on display for all to admire. And in 1978, the new leader Deng Xiaoping kind of figured it might be time to let people make money again. So he started lifting some of the communist economic restrictions. People began selling their extra crops, starting businesses—basically doing what they did before the Communist Party suppressed them. With hard work and ingenuity, Chinese people began lifting themselves out of poverty.
That’s right. The Communist Party backed off, and people started to make money. But the flip side is that the Communist Party also backed off from implementing meaningful regulation. So while a lot of poor farmers have been moving to cities for higher wages, they are often forced to work long hours in unsafe conditions for low wages with no right to unionize.
But still, the easing of communist restrictions has been enough for 800 million industrious Chinese people to lift themselves out of abject poverty—and into at least no-longer-starving-level poverty. And you know what? That’s a great step. I admire the hard work and tenaciousness of people in China.
But even so, China’s economy is still not as good as it was during the height of the so-called “backwards” dynasties. China now makes up 17% of the world’s total GDP, which is only half as much as it did 200 years ago. So don’t let the Communist Party take all the credit.
To be clear, I’m not saying that the Communist Party wants Chinese people to be poor. After all, a huge gap between the rich and the poor usually leads to social instability, which would be bad for the ruling Party. I’m just saying that by repeatedly claiming all the credit for “lifting people out of poverty,” the Party makes themselves look great while conveniently glossing over all of the things they did to put people in poverty in the first place.
It’s like a guy who congratulates himself on the nice new house he built you--after he set your old house on fire, made you live in the rubble for decades, and then allowed you to rebuild it yourself. But hey, he gave you a great deal on the bricks.
So what do you think about China’s “lifting people out of poverty”? Do you think that’s a fair measurement of progress? Leave your comments below.
