This paper uses the household-level data to estimate trends in poverty in rural and
urban China during 1995-2002 and compare China’s performance in poverty reduction
during this period with that in the period prior to 1995, between 1988 and 1995 to be
more specific. These time periods are determined by the dates of the three household
surveys – respectively for 1988, 1995 and 2002 – which provide the data on which the
estimates are based. In the title of this paper the two periods have been assigned the
designations of the “pre-Asian crisis period” and the “post-Asian crisis period”. The
Asian crisis hit a number of East Asian countries in 1997, two years after the date of the
intermediate survey which separates the two time periods. The logic of the designation is
that China’s poverty reduction outcome in the second period is largely the consequence
of economic performance and policies that took place in the period after the beginning of
the Asian crisis, which was also a period of decline in the growth of the world economy.
As the paper will argue, some of the economic policies initiated in response to the crisis
had important effects on China’s poverty outcome in the second period.
Section II of the paper summarizes the principal features of China’s performance in
poverty reduction during the 1990s and discusses the weakness of the data on which the
measurements underlying the evaluation of such performance are made. It then discusses
the data that are used in the present study. In section III the method of estimating the
poverty threshold is discussed. Section IV estimates the changes in rural poverty while
section V explains the factors behind the difference in China’s performance in rural
poverty reduction in the post-Asian crisis period as compared to that in the pre-Asian
crisis period. Similarly, sections VI and VII are respectively concerned with the
estimation of poverty among those who are registered as urban residents (i.e., the urban
population excluding the so-called floating migrants) and the explanation of the
difference in the reduction of poverty in this group between the two periods. Section VIII
estimates poverty among the floating migrants in urban China while section IX explains
the causes of the difference in the incidence of poverty between the urban migrants and
the urban residents. The concluding section summarizes the broad features of China’s
performance in poverty reduction in the post-Asian crisis period and highlights the
principal aspects of China’s policy response to deal with the problem of poverty in this
period.