Urban Poverty Warned in China

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Last updated at: (Beijing Time) Wednesday, October 30, 2002

Urban Poverty Warned in China

China must pay attention to its urban poverty, whose severity might have been greatly underestimated, warned a government think tank.

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China must pay attention to its poor population in cities, said a research report by the Development Research Center under the State Council, a government think tank.

The official figure of the urban poor population is 14.7 million if calculated according to their per capita income. But the number will shoot up two and half times to 37.1 million if the per capita expenditure is used as a benchmark.

Moreover, the severity of urban poverty might have been greatly underestimated, because the so-called urban population in the official statistics usually excludes two groups of people, according to the report published in the Beijing-based China Economic Times.

One is the shifting population, usually farmers moving to and among cities; the other, those living in suburban areas, who are actually living through non-farming means, but still counted as "farmers" due to their residentship.

Immigrating people suffer more

The mobile population usually suffer most from the urban poverty, said the report.

China has observed waves of immigrating workers since the mid-1980s.

By 1999, the number of the shifting population stabilized at 30 million. Although there is no latest statistics of the mobile workers in the recent a couple of years, analysts think it should be quite big.

The ratio of immigrating population living under the poverty line is very high, mostly around 15 percent, or 20 percent somewhere, about 50 percent higher than that for the constant urban residents, according to the report.

The other poor group consists of the unemployed and the laid-offs out of State-owned enterprises.

To date, China's social security network consists mainly of three lines.

The first one is the living subsistence allocated to laid-offs by the re-employment center at most State-owned enterprises they used to work for.

But the laid off workers can take their subsistence here for at most three years, a ceiling time period set by the government.

After that, if they remain jobless, all the laid-offs will be shifted out of the re-employment center and be required to sign an unemployment insurance.

As a matter of fact, since 2001, nearly all laid off workers have directly bought the unemployment insurance without experiencing the interim time in the so-called re-employment center, which is initially designed more as a cushion to reduce the shock coming with unemployment than any true mechanism to resolve the unemployment issue.

Then comes the unemployment insurance, the second line against the urban poverty.

Although the total number of jobless workers buying the unemployment insurance rose from 79.3 million in 1998 to 103.42 million in 2000, the actual ratio of the jobless covered by the insurance is only 48.9 percent, because the insurance policy excludes all the self-employed and immigrant laborers in cities.

A fragile plinth

As the last defense line against the urban poverty, the minimum living condition guarantee promised by governments at different levels is expected to deliver all the needy in cities a reliable poverty relief. But it proves unable to fulfill the designated role, according to the report.

First, the coverage of the minimum livelihood guarantee is so limited that only a small proportion, less than 25 percent in fact, of the acknowledged urban poor families finally get the relief support.

Like the unemployment insurance, the minimum livelihood guarantee also excludes all those immigrant workers, although they might have stayed in cities for over half a year or longer.

Greatly insufficient capital is the main reason for the out-of-elbow minimum guarantee.

Second, the procedure for diagnosing the qualification of receiving the poverty relief is still very imperfect.

With only sporadic surveys based on the coarse statistical methodologies, local governments usually come up with their number of to-be-supported people through some rough estimation if not simply guesswork.

Stringent fiscal condition has also discouraged local authorities' efforts to beg for a precise statistics.

Last, but not least, the actual support is too meager to substantially relieve the poverty.

Of 35 sampled cities, 27 ones set their relief lines under the estimated poverty lines. In 17 cities, the difference between the two lines is over 10 percent, and even larger in such cities as Qingdao in east China's Shandong Province, Urumqi in northwest Xinjiang Autonomous Region, and Shenzhen and Guangzhou in south China.

By PD Online staff Forest Lee

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