Interview: Stable, high growth behind China's success in poverty reduction, World Bank expert says

10:06, April 24, 2010      

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A leading World Bank expert has attributed China's remarkable success in reducing poverty to its ability to maintain stable and high economy growth over the past decades.

"It is not just 'some' progress that china has made in poverty reduction," said Hans Timmer, director of the World Bank's Development Prospects Group (DPG), in an interview with Xinhua on Friday.

"In that area, China was the most successful of all developing countries."

Timmer spoke as the World Bank and the International Monetary Fund (IMF) released its Global Monitoring Report 2010: The MDGs after the Crisis, a publication that was prepared by DPG.

The MDGs (Millennium Development Goals) refers to a set of eight anti-poverty targets that world leaders have agreed to achieve by 2015.

China reduced its poverty rate from 60 percent in 1990 to 16 percent, as the absolute number of extremely poor fell from 683 million to 208 million, the report shows.

"Thanks to rapid economic growth, especially in China, East Asia has already halved extreme poverty," it says.

"And now we are expecting in 2015, the ultimate time goal for the MDGs, it (poverty rate) will only be 5 percent," Timmer said. "There is no other country that is so successful."


Turning to the underlying factors, he said that a strong growth -- continued growth rates annually of almost 10 percent -- obviously played a leading role here.

"But it is not only strong growth, it is also the character of growth and stability of growth."

China has been very successful in transforming a mainly agricultural economy into an industrial economy, "using very logical steps moving forward -- developing first very labor intensive light industry which created very quickly a lot of jobs for the people coming out of the agricultural sector," he said.

"Increasingly, China is also being successful in stabilizing growth," he said.

Despite several periods of slow growth during the 1990s, China has improved its macro-economic stability over the past decade, and as a result, China has achieved "much stable growth," he said.

"So, it is basically the economic development with all its characteristics that have been responsible for this enormous success," Timmer noted.


China owed its fast growth to domestic productivity progress rather than to a strong demand outside the country, he said.

Actually, as demand outside China was not accelerating, China's fast-growing export was the result of domestic reforms which helped increase productivity year after year.

"As a result of that, that could increase their market share abroad," he said. "That is not something that is completely dependent on what was happening outside China."

Rather, "it is to a large extent dependent on the productivity progress inside China, and that still can continue for sometime," he said.

In spite of that, China needs further transformation of the economy if it wants to continue to grow at the same high growth rate.

"We have seen the transformation from agriculture into industry and what we have to see now, is a transformation from industry into the service sector," he said. "The current 5-year plan in China exactly tries to do that."

Although the shock of the crisis may have delayed that process, "I am convinced that relatively soon that the Chinese government will pick up again on achieving that transformation," he said.


Turning to the bigger question whether China's success story can provide valuable lessons for other developing countries, Timmer expressed belief that "the whole development world can learn from the Chinese experience."

But "it will not be possible to exactly replicate these developments in other countries," because every country has its own characteristics and backgrounds, he said.

The growth in China was the result of reforming the formerly centrally planned economy, a process that cannot be replicated in many other countries, he said.

Besides, China has a "very stable governance situation, which is not the environment of many other countries, he said.

In fact, World Bank Chief Economist Justin Lin has set up a new research program to see to what extent the structural transformation in China can be replicated in other countries, especially in African countries, Timmer said.

"It is not something that is very easy. But obviously we learn lessons from this experience."

Source: Xinhua


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