Jobs, Houses and Cows: China’s Costly Drive to Erase Extreme Poverty
JIEYUAN VILLAGE, China – When the Chinese government offered free cows to farmers in Jieyuan, villagers in the remote mountain community were skeptical. They feared the officers would ask them to return the cattle later with the calves they could raise.
But the farmers kept the cows and the money they brought. Others received small flocks of sheep. Government workers also paved a road into town, built new houses for the poorest residents of the village, and used an old school as a community center.
Jia Huanwen, a 58-year-old farmer in the village in Gansu Province, received a large cow three years ago that produced two healthy calves. He sold the cow in April for $ 2,900, as much as he makes in two years growing potatoes, wheat, and corn on the terraced, yellow clay slopes nearby. Now he regularly buys vegetables for his family’s table and medication for an arthritic knee.
“It was the best cow I have ever had,” said Mr. Jia.
Jieyuan Village is one of the many achievements of President Xi Jinping’s ambitious pledge to eradicate dire rural poverty by the end of 2020. In just five years, China claims to have lifted more than 50 million farmers out of extreme poverty left behind by China’s breakneck economic growth.
The village, one of six in Gansu visited by the New York Times without government supervision, is also evidence of the significant cost of the ruling Communist Party’s approach to poverty alleviation. This approach relied on massive, potentially unsustainable, subsidies to create jobs and build better homes.
Local cadres fanned out to identify impoverished households – defined as living on less than $ 1.70 a day. They distributed loans, grants and even farm animals to poor villagers. Officials visited residents weekly to check their progress.
“We are fairly certain that China’s eradication of absolute poverty in rural areas has been successful. Given the resources mobilized, we are less certain that it will be sustainable or inexpensive,” said Martin Raiser, World Bank country director for China.
Beijing has poured nearly $ 700 billion in loans and grants into poverty reduction over the past five years – about 1 percent of annual economic output. This excludes large donations from state-owned companies like State Grid, an electricity transmission giant that has invested $ 120 billion in upgrading rural electricity and deployed more than 7,000 people on poverty reduction projects.
The campaign received a new urgency this year as the country was devastated by the coronavirus pandemic and severe flooding. One by one, the provinces announced that they had achieved their goals. In early December, Mr. Xi stated that China had “won a major victory that has impressed the world”.
However, Mr. Xi acknowledged that more efforts are needed to further share the wealth. A migrant worker in a coastal factory town can make as much in a month as a Gansu farmer in a year.
Mr. Xi also urged officials to ensure that newly created jobs and aid to the poor do not fade in the years to come.
Gansu, China’s poorest province, said in late November that it had lifted its last counties out of poverty. A decade ago, poverty was widespread in the province.
Hu Jintao, China’s leader before Mr. Xi, visited people who lived in simple houses with little furniture. Villagers ate so many potatoes that local officials were embarrassed when a young girl initially refused to have another meal with Mr. Hu in front of television cameras because she was fed up with it, according to a cable published by WikiLeaks.
Although many villages are only accessible by single lane roads, they are lined with street lights powered by solar panels. New pig farms, nurseries and small industrial-scale factories have sprung up and have created jobs. Workers build new houses for farmers.
Three years ago, Zhang Jinlu woke up in horror when the rain-weakened mud-brick walls of his house gave way. Half of the roof timbers collapsed with dirt slabs and barely missed him and his mother.
Officials in Youfang Village built a spacious new concrete house with new furniture for her. Mr. Zhang, 69, is now receiving a monthly grant of $ 82 through the Poverty Program. His original house was converted into a storage shed for him.
Apr. 30, 2020 at 9:23 am ET
“This house used to be dilapidated and it leaked when it rained,” said Mr. Zhang.
The government helps private factories buy equipment and pay salaries when they hire workers who are believed to be impoverished.
At Tanyue Tongwei Clothing & Accessories Company in southeast Gansu, around 170 workers, mostly women, sewed school uniforms, T-shirts, down jackets and face masks. Workers said several dozen employees were receiving additional payments from the poverty reduction program in addition to their salaries.
According to Lu Yaming, the company’s legal representative, Tanyue receives at least $ 26,000 per year in subsidies from poverty reduction programs, of which $ 500 per year was paid to each of the 17 villagers believed to be impoverished.
However, the viability of these factories without ongoing assistance is far from clear. Until the subsidies came in, the factory often had problems paying wages on time, Mr. Lu said.
Inevitable questions arise about whether some families have used personal relationships with local officials to qualify for scholarships. According to official statistics, corruption investigators linked to poverty reduction measures fined 99,000 people across the country last year. Local eateries in communities like Mayingzhen, where a spicy platter of roast donkey meat costs $ 7, the key is who got what and whether they should really have qualified.
While the poverty reduction program has helped millions of poor people, critics point to the campaign’s strict definitions. The program supports people classified as extremely poor from 2014 to 2016, without adding others who may have had tough times since then. It also helps very little poor people in big cities where wages are higher, but workers have to pay much more for food and rent.
The government’s complicated criteria for determining eligibility were excluded from anyone who owned a car, had assets over $ 4,600, or had a new or recently remodeled home. People living just above the government’s poverty line continue to struggle to make ends meet, but are often denied assistance with housing or other services.
Zhang Sumei, a 53-year-old farmer, makes $ 1,500 a year growing and selling potatoes and had to use her savings to build her house out of concrete. She says she should have qualified to help the extremely poor. Farming Gansu’s notoriously barren soil is tough and difficult.
“In this society, poor families are ruled by cadres and we have nothing.” she said bitterly.
The party’s campaign-like approach also fails to address deep-seated issues that disproportionately hurt the poor, including health care costs and other gaps in China’s burgeoning social safety net. Villages offer limited health insurance – for example, only 17 percent of the cost of the arthritis drug is paid for by Mr. Jia. High medical bills can ruin families.
Yang Xiaoling, a 48-year-old worker who works at another government-subsidized factory in Gansu, cried uncontrollably as she described the crippling debt she faced after paying medical fees for her husband, who suffered from kidney failure would have.
Three years ago she borrowed interest-free US $ 7,700 from a Poverty Reduction Bank to invest the money in buying cattle. Instead, she borrowed more money from relatives and then spent all of the money on a kidney transplant and medication for her husband.
Now all of the loan is due and she has no money to pay it back. Medical follow-up treatments for her husband use up all of her salary. The couple and their three children, as well as their husband’s invalid parents, live on monthly state poverty relief payments of less than $ 50 per person.
“I can’t pay it back. I can’t help it, ”Ms. Yang sobbed. “I’ve already borrowed a lot of money and now nobody lends me any more money.”
Despite the challenges, the poverty reduction program may have long-term policy benefits that will help some of it survive. The gratitude for the program seems to strengthen the party’s political power in rural areas.
In Youfang, Mr. Zhang was quick to praise not only the poverty program, but also Mr. Xi, comparing him to Mao.
“It is good for the country to have Xi Jinping,” he said, “and the national politics are good.”
Chris Buckley contributed to the coverage from Sydney. Liu Yi, Amber Wang, and Coral Yang contributed to the research.