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The World Bank, which defines poverty as survival on less than $1.25 per day, says China reduced the poverty rate from 84% of the population to 13,1% between 1981 and 2008. The number for 2010 is 12%. This decline in the poverty rate means that roughly 600 million people were taken out of poverty.
In absolute numbers:
That’s an impressive achievement, especially compared to other developing regions such as India and Africa. However, a lot of it is due to the fact that China started from absolutely nowhere:
Since 1978 China has liberated more people from poverty than any other country in history, partly because China before 1978 consigned more people to poverty than anywhere else in history. (source)
China still has around 100 million poor people consuming less than $1.25 a day, but this is only one in 6 of all the world’s poor people:
East Asia in the graph below is mainly China.
China’s Gini coefficient is above 0.4, higher even than the US. The figure was only 0.275 in the 1980s and will likely rise further.
Income inequality has risen faster in urban areas:
You can also see China’s rising income levels in the graph below:
This graph also shows increasing levels of income inequality: the annual distributions move to the right but they also become wider. A lot of this inequality is between well educated urban professionals and the urban working class, and between rural and urban populations.
China’s own system for poverty measurement also uses a poverty line (as does the U.S. and India, although obviously the level of the line is different). China recently doubled its national poverty line from 90 cents a day to $1.80 (adjusted to reflect constant 2005 purchasing power). The poverty line for rural areas is 2,300 yuan ($361) a year. About 128m Chinese countryfolk earn less. Both lines are close to the World Bank’s global standard of $1.25 per day. Compare this to other national poverty lines: the highest line is in Luxembourg, at $43 a day, while the United States, with a similar level of average consumption to Luxembourg, has a $13-a-day line.