China declared in 2021 that it had stamped out extreme poverty. While critics question the self-proclaimed triumph, the central government’s strategy of adjusting cadre appraisals to focus on anti-poverty achievements did have considerable success. Rural incomes improved as local officials were spurred by potential promotions if they hit their targets.
At the same time, economic growth – long a mainstay on Chinese cadres’ report cards – has largely taken a backseat. Growth slowed for some counties during the anti-poverty campaign as local officials diverted manpower and financial resources into plucking the poorest out of their mud huts in remote corners of China, creating new livelihoods, and ensuring that the lowest rung of the population had basic welfare.
After 1978, when Deng Xiaoping first launched market-opening reforms, China experienced heady economic growth for the next few decades, lifting hundreds of millions from dire destitution. With the central government bent on expanding the economy during that era, local officials obeyed orders from the top by chasing GDP growth in hopes of securing promotions – a central-local compliance strategy that helped vault China to become the world’s second-largest economy. However, while there was general prosperity, a closer look showed that some – nearly 100 million people out of China’s 1.3 billion population – were still struggling to stay afloat.
Enter top leader Xi Jinping’s “targeted poverty alleviation” campaign. For Xi, claiming victory against “the war on poverty” would be paramount in consolidating his legacy and reinforcing the Chinese Communist Party’s legitimacy to rule. Under Xi, poverty alleviation went from an undervalued goal as part of efforts to achieve a “moderately prosperous society” to a key focus.
But how did China’s leaders get local officials to buy into the idea? Soon after Xi came into power, the central government issued a document in 2014 to change the performance evaluation of party and government leaders in poor counties. More than 3 million public sector officials from cities and counties to towns and villages were deployed in the poverty alleviation campaign, and the central government needed to nudge officials at local levels to comply with its plans by dangling some political incentives.
The new document required provincial governments to either reduce or remove entirely the weightage of local GDP in cadres’ appraisals in poorer counties. Under the new appraisal system, cadres’ performance would be mainly based on poverty alleviation-related indicators, such as rural income per capita and population in poverty. Leaders of China’s midwestern provinces – where the impoverished population was concentrated – were asked to sign letters of responsibility to guarantee the completion of poverty alleviation tasks.
Some provinces such as Ningxia and Guizhou were quick to implement the new appraisal system, while others were slower and did not implement it until 2016. Regardless of the start dates, all would need to hit the central government’s plan of ending absolute poverty nationwide in 2020, in time for Xi to announce the success in 2021, the 100th anniversary of the founding of the Chinese Communist Party.
Against this backdrop, I co-authored a research paper that was published in the World Development academic journal in April. We pored through and crunched data to explore what impact the shift in appraisals had on rural income, GDP, and promotions. We analyzed 1,281 counties across 16 provinces (out of a total of 22) that were targeted and specifically mandated by the central government to change their cadre evaluation systems to reduce poverty in the impoverished counties. We consolidated information from various statistical sources and tracked appraisal announcements from local government websites and the career paths of local leaders. We then plowed through and performed statistical analyses on the data from 2012-2018, which was two to three years before and after the new appraisal system rolled out.
Essentially, two groups were compared against the control group: counties that totally removed GDP in their appraisals and those that just reduced the weight GDP growth carried. Our statistical analyses showed that in the first few years after the new appraisal system was implemented, GDP growth slowed more starkly for counties that totally removed GDP as an appraisal requirement, implying that there was a trade-off between poverty reduction and GDP growth in the short term.
Our research also showed that rural income per capita increased in the initial year of the new appraisal system, particularly for counties that ditched GDP totally as resources were reallocated to anti-poverty activities. However, after crunching the numbers further, we noticed that rural incomes improved due to fiscal support, rather than an overall improvement in agricultural productivity, which would have been more sustainable for the rural population in the long run.
The effectiveness of the central-local compliance strategy was also seen in our statistical analysis on promotions – the predicted probability of a county mayor being promoted increased by 5 percent if the rural income per capita rose by 1 percent after the new appraisal system was implemented. Essentially, county mayors who achieved the anti-poverty goals had greater career advancement prospects, and this ultimately helped China’s fight in eliminating extreme poverty.
Even though our research included empirical evidence on the notable success of the anti-poverty drive, questions still abound over whether China has eradicated abject poverty. For starters, when China declared victory in its war on poverty, some media argued that it was because the country’s poverty line was lower than the World Bank’s $1.90 a day. Furthermore, as our study showed that agricultural productivity was still low, there are concerns as to whether the new livelihoods of the poorest can be sustained once the impact of fiscal support wanes. It may be that more needs to be done to prop up skillsets with human capital investments. Looking ahead, there are also worries over whether poverty numbers might creep up again with the after-effects of COVID-19 and the Ukraine war fueling inflation and hampering the economy.
Recently, there have been pockets of anecdotal evidence that in some areas, the battle against poverty might not be over yet. Earlier this year, there was a media report on Chinese censors deleting video clips of people still grappling to make ends meet. Authorities would have to come to terms with such problems, even as they prefer to only present the good side of things and scrub away any bad publicity. Hence, amid state media images of contented villagers relocating into apartments in newly constructed towns and the fanfare lauding the “complete victory” of the campaign, Chinese authorities need to keep plodding on with follow-up policies to ensure that absolute poverty can be eradicated absolutely.
Source : The Diplomat