China has followed its own path of reform and transition to a market economy. It did not adopt
the strategy of instant liberalization and privatization used elsewhere in the formerly centrally
planned economies. Nonetheless, China’s reform path has allowed for very rapid economic
growth for most of the transition period, a great rise in the average standard of living, and a big
reduction in the number of extremely poor people. While this study examines the contribution
of China’s anti-poverty programs in both rural and urban areas in some depth, it contends that
poverty reduction has been largely shaped by macro-policies and trends. It is therefore about
the relation of the pattern of growth and accompanying external and domestic macro-policies
to the condition of the poor.
Policy developments in the areas of foreign trade, FDI, exchange rate, capital account
liberalization, and, on the domestic side, monetary and financial policies, fiscal policy and
employment policies are reviewed against their impacts on growth and poverty reduction
outcomes. A key conclusion is that China’s current macro-policies can and should be made
more deliberately pro-poor.