Development Strategies, Welfare Regime and Poverty Reduction in China (Country Overview Paper 1) (Draft)

China achieved historic highs in reducing poverty in the 1980s with Deng Xiaoping’s reforms. Growth in incomes and GDP have been phenomenal, especially during the early 1980s when the numbers in poverty were cut in half. A crucial question is how much of China’s success was due to poverty relief programmes and how much to the effects of economic development more generally. This paper begins with a brief overview of China’s efforts over time to relieve poverty through assistance to the poor to give a sense of the specific poverty alleviation efforts undertaken during the Mao period and during the early years of reform. Such policies are obviously necessary, no matter how successful a country’s economy. However, to understand how China managed to reduce poverty so quickly, one must examine those policies that promoted broad based economic growth and raised peasant incomes more generally.

This paper looks at how China could grow its economy so quickly and raise incomes, especially in the rural areas where the bulk of China’s poverty exists, to draw some lessons about successful development strategies that may serve other countries in their efforts to reduce poverty. A key part of that answer will centre on the particular nature of China’s policy regime.