China’s official poverty statistics show a dramatic reduction in poverty from 31% of the rural
population in 1978 to 3% in 2000. We evaluate possible sources of bias in these estimates and
conclude that the official statistics underestimate rural poverty and overstate the speed of poverty
reduction. Direct measures of nutritional outcomes support the contention that poverty is more
widespread than suggested by official statistics. Priority should be given to constructing new statistics
to accurately measure urban poverty. The method for calculating county income per capita, a key
policy variable affecting official poor county designation, is ad hoc and subject to political influence.