Introduction of Urban Poverty Reduction in China

Introduction of Urban Poverty Introduction of Urban Poverty Reduction in ChinaReduction in China

Huidong ZhangHuidong Zhang

International Poverty Reduction Center in ChinaInternational Poverty Reduction Center in China2005.12.82005.12.8

ContentContent PrefacePreface

Preview of China urban povertyPreview of China urban poverty

Determinants of povertyDeterminants of poverty

Urban poverty reduction polices in Urban poverty reduction polices in

China China

Features of poverty (poverty Features of poverty (poverty

reduction) in urban areas and in rural reduction) in urban areas and in rural

areasareas

1.Urban poverty is an emerging issue in the developed 1.Urban poverty is an emerging issue in the developed economy and society of China.economy and society of China.

1.1 Urban poverty is a newly tapped issue compared with rural poverty.1.1 Urban poverty is a newly tapped issue compared with rural poverty.

1.2 Negative effects of economic transition and market-based economic system1.2 Negative effects of economic transition and market-based economic system

☆☆Economic transition caused restructuring Economic transition caused restructuring

☆☆Negative effect of market economy: enlarging gap between rich and poorNegative effect of market economy: enlarging gap between rich and poor

☆☆Correlation between economic growth and wealth gapCorrelation between economic growth and wealth gap

1.3 It is an important issue to be addressed in building a harmonious society1.3 It is an important issue to be addressed in building a harmonious society

The eradication of urban poverty is the mandate of a socialist society, a The eradication of urban poverty is the mandate of a socialist society, a

foundation for coordinated development and a requirement in setting up the foundation for coordinated development and a requirement in setting up the

market-based economy.market-based economy.

2 Preview of Urban Poverty in China2 Preview of Urban Poverty in China

2.1The root and evolvement of China urban poverty2.1The root and evolvement of China urban poverty 2.1.1 In a centrally-planned economy——urban poverty wa2.1.1 In a centrally-planned economy——urban poverty wa

s beneath the surfaces beneath the surface2.1.2 At the beginning of reform and opening-up(1978—1992.1.2 At the beginning of reform and opening-up(1978—199

0):urban poverty was taking shape0):urban poverty was taking shape2.1.3 Reform on full swing2.1.3 Reform on full swing （（ mid-or-late of 1990s-nowmid-or-late of 1990s-now ）：）：

urban poverty was rampanturban poverty was rampant

2.22.2 、、 Magnitude and composition of urban poorMagnitude and composition of urban poor

2.2.1Magnitude2.2.1Magnitude The standard adopted to measure urban poor in China was the The standard adopted to measure urban poor in China was the

minimum security line in each areas: necessities, pricesminimum security line in each areas: necessities, prices Number below the line in 1997Number below the line in 1997 ：： 2 million2 million ；； Number below the line in 2003Number below the line in 2003 ：： 22.468 million22.468 million

Song and QiSong and Qi （（ 20052005 ）：）： those below the low income line numbthose below the low income line numbered 50.21 million and among which those with difficulty numbered ered 50.21 million and among which those with difficulty numbered 25.1 million25.1 million


Fang CaiFang Cai （（ 19981998 ））：： Assessed by household expenditureAssessed by household expenditure ：： 37.07 millio37.07 millionn

Assessed by household incomeAssessed by household income ：： 14.77 million 14.77 million UNDPUNDP （（ 20042004 ））：： Urban poverty incidence began to rise rapidly since the Urban poverty incidence began to rise rapidly since the

1990s. Official statistics showed the total urban poor reached 19.3 million by 1990s. Official statistics showed the total urban poor reached 19.3 million by mid of 2002, an equivalent of 4% permanent urban residentsmid of 2002, an equivalent of 4% permanent urban residents ，， (floating po(floating population not included). pulation not included).

Mei and QinMei and Qin ：： Two viewsTwo views ：Ⅰ：Ⅰ .16-18 million as concluded by Ministry of .16-18 million as concluded by Ministry of Civil Affairs, National Bureau of Statistics, All-China Labor Union and expertCivil Affairs, National Bureau of Statistics, All-China Labor Union and experts from Asian Development Bank.s from Asian Development Bank.

Ⅱ Ⅱ.Over 30 million which is more popular in academies.Over 30 million which is more popular in academies The White Paper on the China Social Security and Relevant PoliciesThe White Paper on the China Social Security and Relevant Policies ：： The nThe n

umber of poor entitled the urban minimum security allowance is 22.47 millioumber of poor entitled the urban minimum security allowance is 22.47 million and if those neglected were added, the number of urban poor may reach 3n and if those neglected were added, the number of urban poor may reach 30 million.0 million.

Conclusion: China urban poverty shall be between 25 million and 35 millnio.Conclusion: China urban poverty shall be between 25 million and 35 millnio.

Changes of Urban Poverty in ChinaChanges of Urban Poverty in China

YearYear 19881988 19951995 19991999 20022002

Poverty linePoverty line （（ RMB/Per RMB/Per capitacapita ））

289289 21072107 23822382 634——3840634——3840

MagnitudeMagnitude （（ 1millio1millionn ））

0.70.7 19.119.1 13.413.4 19.619.6

Poverty IncidencePoverty Incidence（（ %% ））

0.20.2 5.45.4 3.53.5 4.14.1

Source ： Hong ， Urban Poverty in China Since the Reform and Opening-up ， 2003

2.2.2 Composition2.2.2 Composition ◎◎Laid-off workers from State-owned and collective-owned enterprises Laid-off workers from State-owned and collective-owned enterprises

dominate the total urban poor: dominate the total urban poor: ◎ ◎Old and childless people entitled to social relief are called Three-no-pOld and childless people entitled to social relief are called Three-no-p

eople: with no provision, no labor ability and legal supportereople: with no provision, no labor ability and legal supporter ◎ ◎Newly-added unemployedNewly-added unemployed ◎ ◎Workers not included in official employment framework: migrant workWorkers not included in official employment framework: migrant work

ers from rural areasers from rural areas


2.22.2 、、 Magnitude and composition of urban poorMagnitude and composition of urban poor

Various types and corresponding proportions of these types of urban poorVarious types and corresponding proportions of these types of urban poor

SourceSource ：： From Statistical Statement by Disaster Relief Department, MinisFrom Statistical Statement by Disaster Relief Department, Ministry of Civil Affairs and excerpted by Song and Qi in October 15, 2002try of Civil Affairs and excerpted by Song and Qi in October 15, 2002

OthersOthers ：： Those without social insurance, those with disease, thosThose without social insurance, those with disease, thos

e with low or no income and those coming to cities for a job. e with low or no income and those coming to cities for a job.

A survey by All-China Labor Union showed 21.9% of urban poverty A survey by All-China Labor Union showed 21.9% of urban poverty come from East China and 25.2% from mid China.come from East China and 25.2% from mid China.

TypesTypes Three-Three-no-no-peoplepeople

Laid-offsLaid-offs RetireesRetirees OthersOthers

PopulationPopulation （（ 1010thousandthousand ））

84.584.5 572.8572.8 488.7488.7 1007.41007.4

ProportionProportion（（ %% ））

4.34.3 29.229.2 29.929.9 41.641.6

ResourceResource ：： China Statistics YearbookChina Statistics Yearbook ，， 2003 and 20042003 and 2004 。。

2.3Livelihoods and Development of Urban Poverty2.3Livelihoods and Development of Urban Poverty

2.3.1 Low income and single source of income2.3.1 Low income and single source of incomePer Capita Disposable Income of Urban HouseholdsPer Capita Disposable Income of Urban Households （（ 2002——20032002——2003 ，， YY

uanuan ））

YearYear AverageAverage Lowest Lowest Income Income HouseholdsHouseholds

Poor Poor HouseholdHouseholdss

Middle Middle Income Income HouseholdsHouseholds

Highest Highest Income Income HouseholdsHouseholds

20022002 7702.87702.8 2408.7 2408.7 1957.46 1957.46 6656.81 6656.81 18995.85 18995.85

393393 123 123 100 100 340 340 970 970

20032003 8472.208472.20 2950.17 2950.17 2098.92 2098.92 7278.75 7278.75 21837.32 21837.32

403403 140 140 100 100 346 346 1040 1040


Per Capita Annual Living Expenditure of Urban HouseholdsPer Capita Annual Living Expenditure of Urban Households（（ 2002——20032002——2003 ，， YuanYuan ））

YearYear National National AverageAverage

Lowest Lowest Income Income HouseholdHouseholdss

Poor Poor HouseholHouseholdsds

Middle Middle Income Income HouseholdHouseholdss


20022002 年年 6029.886029.88 2387.91 2387.91 2079.522079.52 5452.94 5452.94 13040.6913040.69

290290 117 117 100 100 297297 773 773

20032003 年年 6510.946510.94 2562.362562.36 2237.27 2237.27 5848.02 5848.02 14515.6814515.68

291291 114 114 100 100 261 261 648648

SourceSource ：： China Statistics YearbookChina Statistics Yearbook ，， 2003 and 20042003 and 2004 。。

Source of income: Salary from State-owned or collective-owned enterpriSource of income: Salary from State-owned or collective-owned enterprises, benefit from self-employed and non-official business and social transfer ses, benefit from self-employed and non-official business and social transfer payment.payment.

Average income of Staff and Workers in Various EnterprisesAverage income of Staff and Workers in Various Enterprises （（ 2001——2002001——20022 ））

YearYear State-owned State-owned UnitsUnits

Collective-Collective-owned Unitsowned Units

other Types of other Types of OwnershipOwnership

20012001 1117811178 68676867 1214012140

20022002 1286912869 76677667 1321213212

SourceSource ：： China Statistics YearbookChina Statistics Yearbook ，， 20032003 。

2.3.2 Basic living demands dominates the total consumption .2.3.2 Basic living demands dominates the total consumption . Low expenditure, unreasonable composition of consumption, excessive proportion Low expenditure, unreasonable composition of consumption, excessive proportion

of food and insufficient expenditure on social serviceof food and insufficient expenditure on social service Composition of Per Capita Annual Living Expenditure of Urban HouseholdsComposition of Per Capita Annual Living Expenditure of Urban Households （（ 2003 2003 ，，

%% ））ItemItem FoodFood ClothiClothi

ngngHousehold FaHousehold Facilitiescilities ，， ArticArticles and Servicles and Serviceses

Medicine Medicine and and Medical Medical ServicesServices

TransportTransport ，，PostPost ，， anand Commud Communication Snication Serviceservices

EducationEducation ，，Culture anCulture and Recreatid Recreation Serviceon Servicess

ResidResidenceence

MiscellanMiscellaneous eous CommodCommodities and ities and ServicesServices

AverageAverage 37.1237.12 9.799.79 6.306.30 7.317.31 11.0811.08 14.3514.35 10.7410.74 3.303.30

Lowest Lowest Income Income HouseholdsHouseholds

47.7247.72 7.757.75 3.593.59 6.866.86 6.806.80 12.7912.79 12.0612.06 2.432.43

Poor Poor HouseholdsHouseholds

48.5948.59 7.027.02 3.433.43 6.486.48 6.156.15 13.1013.10 12.8312.83 2.402.40


29.8529.85 8.798.79 8.088.08 7.377.37 14.3414.34 15.2215.22 12.3612.36 3.993.99

ResourceResource ：： China Statistics YearbookChina Statistics Yearbook ，， 20042004 。

Per Capita Annual Purchases of Major Commodities by urban Households classiPer Capita Annual Purchases of Major Commodities by urban Households classified by Income levelfied by Income level （（ 20022002 ））

Item Item AverageAverage Lowest IncomeLowest Income

House-holdsHouse-holdsPoor House-Poor House-holdsholds

HignestHignestIncomeIncomeHouse-holdsHouse-holds

GrainGrain （（ kgkg ）） 78.4078.40 83.3283.32 84.2484.24 71.3671.36

PoultryPoultry （（ kgkg ）） 9.249.24 5.175.17 4.404.40 13.3413.34

Fresh Dairy ProductFresh Dairy Product（（ kgkg ））

15.7215.72 4.834.83 3.593.59 26.4626.46

Women’s ClothingWomen’s Clothing（（ PiercePierce ））

3.603.60 1.631.63 1.361.36 6.086.08

ResourceResource ：： China Statistical Yearbook 2003.China Statistical Yearbook 2003.

Number of Durable Consumer Goods Owned Per 100 Urban HouNumber of Durable Consumer Goods Owned Per 100 Urban Households at Year-end by Level of Incomeseholds at Year-end by Level of Income （（ 20022002 ））

ItemItem AverageAverage Lowest Lowest IncomeIncome

House-holdsHouse-holds

Poor House-Poor House-holdsholds

HighestHighest

IncomeIncome

House-holdsHouse-holds

Composite FurniturComposite Furnituree （（ setset ））

70.2470.24 52.0152.01 47.0147.01 85.6485.64

Refrigerator Refrigerator （（ uniunitt ））

87.3887.38 60.6360.63 56.3656.36 103.51103.51

ComputerComputer （（ setset ）） 20.6320.63 2.782.78 2.102.10 53.8153.81

Pickup CameraPickup Camera （（ ssetet ））

1.921.92 0.200.20 0.080.08 7.037.03

Air ConditionerAir Conditioner （（ uunitnit ））

51.1051.10 8.158.15 5.895.89 128.30128.30


2.3.3 Large scale of poor households, high burden2.3.3 Large scale of poor households, high burden

ItemItem NatioNationalnal

Lowest Lowest Income Income HouseholdsHouseholds

PoorPoor

HousehHouseholdsolds

Middle Middle Income Income HouseholdsHouseholds

Highest Highest Income Income HouseholHouseholdsds

Average Household SizeAverage Household Size （（ PersoPersonn ））

3.013.01 3.403.40 3.463.46 3.033.03 2.682.68

Average Number of Employees per Average Number of Employees per HouseholdHousehold （（ PersonPerson ））

1.581.58 1.351.35 1.251.25 1.651.65 1.621.62

Percentage of Employed Persons Percentage of Employed Persons per Householdper Household （（ %% ））

52.452.499

39.7139.71 36.1336.13 54.4654.46 60.4560.45

Number of persons Supported by Number of persons Supported by Each EmployeeEach Employee （（ PersonPerson ））

1.911.91 2.522.52 2.772.77 1.841.84 1.651.65

Employment Condition of Urban HouseholdsEmployment Condition of Urban Households （（ 20032003 ））

Resource ： China Statistics Yearbook （ 2004 ）

33 、、 Determinants of Urban PovertyDeterminants of Urban Poverty

3.1 The result of economic transition and following 3.1 The result of economic transition and following restructuringrestructuring

3.2Underemployment3.2Underemployment3.3Incomplete Social Security System3.3Incomplete Social Security System3.4Unequal income distribution3.4Unequal income distribution

3.1.1Strategic restructuring of state-owned economy3.1.1Strategic restructuring of state-owned economy State-owned economy is declining in its share of national economy State-owned economy is declining in its share of national economy

aggregate with weaker competitiveness: less employees being aggregate with weaker competitiveness: less employees being absorbed and less new workersabsorbed and less new workers

Junior laborers more and more prevail the state-owned economy, Junior laborers more and more prevail the state-owned economy, especially in Northeast, mid and northwest.especially in Northeast, mid and northwest.

The rise of non-public economy relieved unemployment pressure but The rise of non-public economy relieved unemployment pressure but no without concerns.no without concerns.

3.1.2 Consequence of Restructuring3.1.2 Consequence of Restructuring

Primary industry lowered its share. A large number of laborers broke Primary industry lowered its share. A large number of laborers broke away from agricultural production and stormed to cities which caused away from agricultural production and stormed to cities which caused environmental deterioration and new low incomersenvironmental deterioration and new low incomers

33 、、 Determinants of Urban PovertyDeterminants of Urban Poverty3.1 The result of economic transition and following 3.1 The result of economic transition and following restructuringrestructuring

Secondary industry upgraded its structure ahead of schedule, Secondary industry upgraded its structure ahead of schedule, in which capital replaced labor.in which capital replaced labor.

Tertiary industry can hardly absorb laborers, especially in those Tertiary industry can hardly absorb laborers, especially in those mid and small sized cities in northwest, northeast and mid mid and small sized cities in northwest, northeast and mid China.China.

3.1.3 Negative effect brought by fluctuation of macro-economy3.1.3 Negative effect brought by fluctuation of macro-economy Between the end of the 1980s and the mid and late of the Between the end of the 1980s and the mid and late of the

1990s: inflation of commodities closely related to daily life1990s: inflation of commodities closely related to daily life Between mid and late of the 1990s and the early 21st Century: Between mid and late of the 1990s and the early 21st Century:

deflation which constrain the increase of incomedeflation which constrain the increase of income

Fi xed-base Consume Pri ce I ndi ces i n Urban Area1985-2003（）

0

100

200

300

400

500

600

1985 1989 1991 1993 1995 1997 1999 2001 2003

1978=100

3.2 Underemployment: Direct cause of urban poverty3.2 Underemployment: Direct cause of urban poverty Large number of unemployed, rising urban registered unemployment rate eaLarge number of unemployed, rising urban registered unemployment rate ea

ch year, actual unemployment rate in urban areas 10 times as much as registch year, actual unemployment rate in urban areas 10 times as much as registered number (wang and shenered number (wang and shen ，， 2005)2005)

Surveys showed: households with unemployed members account for 13.2Surveys showed: households with unemployed members account for 13.2% of total households: those without account for 2.8%% of total households: those without account for 2.8% （（ xue and weixue and wei ，， 2002004)4)

Redundant laborers remain huge with basically low qualification. Large gap Redundant laborers remain huge with basically low qualification. Large gap between labor supply structure and that of demand.between labor supply structure and that of demand.

Invisible unemployed: Staff in stagnant or semi-stagnant operationInvisible unemployed: Staff in stagnant or semi-stagnant operation Rapid increase of new laborers can not be sufficiently absorbed by various Rapid increase of new laborers can not be sufficiently absorbed by various

industries.industries. Rural population poured into urban areas, adding to the already severe uneRural population poured into urban areas, adding to the already severe une

mployment.mployment.

Unemployment is worse in mid and west China than in east areas. Unemployment is worse in mid and west China than in east areas.

33 、、 Determinants of Urban PovertyDeterminants of Urban Poverty

YearYear 19941994 19951995 19961996 19971997 19981998 19991999 20002000 20012001 20022002

Urban Urban RegistrationRegistration

UnemploymUnemployment Rateent Rate

2.82.8 2.92.9 3.03.0 3.13.1 3.13.1 3.13.1 3.13.1 3.63.6 4.04.0

Actual Actual unemploymeunemployment rate in nt rate in urban Chinaurban China

26.926.9 25.725.7 26.926.9 27.727.7 25.825.8 25.525.5 25.225.2 26.726.7

Actual Unemployment Rate in Urban China （ % ）

Source ： Wang and shen ， 2005

Note: the actual unemployed include registered unemployed, laid-off workers and invisible unemployed

◎◎Narrow coverage of social security: those who are entitled to security are nNarrow coverage of social security: those who are entitled to security are not all includedot all included

◎◎Low security level and few security itemsLow security level and few security items◎◎Low social awareness, low payment rate of security fee.Low social awareness, low payment rate of security fee.◎◎Single source of security fundsSingle source of security funds◎◎Higher incomers get better social security service and vice versa.Higher incomers get better social security service and vice versa.◎◎Social security is excluded from the reform agenda of other sectors which rSocial security is excluded from the reform agenda of other sectors which r

esults in the high cost and heavy burden on poor households even if they results in the high cost and heavy burden on poor households even if they received the security.eceived the security.

33 、、 Determinants of Urban PovertyDeterminants of Urban Poverty3.3 Incomplete Social Security System3.3 Incomplete Social Security System

3.4.1 Enlarging income gap during the early of economic growth3.4.1 Enlarging income gap during the early of economic growth Economic rule: during the economic growth, a country would Economic rule: during the economic growth, a country would

undergo a period of gap enlarging followed by gap narrowing as it undergo a period of gap enlarging followed by gap narrowing as it transformed from a laggard agricultural country to an advanced transformed from a laggard agricultural country to an advanced industrialized country. China is in the early days of the above-industrialized country. China is in the early days of the above-mentioned period.mentioned period.

3.4.2 Unequal income distribution in China3.4.2 Unequal income distribution in China Rapid economic growth, enlarging income gap, unequal Rapid economic growth, enlarging income gap, unequal

distribution of benefits from developmentdistribution of benefits from development

3 Determinants of Urban Poverty3 Determinants of Urban Poverty

3.4 Unequal income distribution3.4 Unequal income distribution

Comparison of economic growth and Gini coefficient during 1995-2004Comparison of economic growth and Gini coefficient during 1995-2004

YearYear 19951995 19971997 19991999 20002000 20012001 20022002 20032003

Economic Economic growthgrowth

10.5%10.5% 8.5%8.5% 7.1%7.1% 7.9%7.9% 7.5%7.5% 7.9%7.9% 9.3%9.3%

National Gini National Gini CoefficientCoefficient

0.3890.389 0.3790.379 0.3970.397 0.4170.417 0.470.47

Urban Gini CUrban Gini Coefficientoefficient

0.280.28 0.290.29 0.2950.295 0.320.32 0.320.32 0.340.34

Estimate may be different from one another, but they are common in the general judgment that all the figures are rising year by year.

ConsequenceConsequence ：： The poor are bereft of the ability and possibility to share The poor are bereft of the ability and possibility to share the benefits from economic growth and they finally turn to social security fthe benefits from economic growth and they finally turn to social security for help.or help.

EvidenceEvidence ：： Enlarging income gap among urban residentsEnlarging income gap among urban residents Enlarging income gap among various social sectorsEnlarging income gap among various social sectors Enlarging income gap among areas; unbalanced developmentEnlarging income gap among areas; unbalanced development On the other hand, the basic living cost is rising too fast, so that the poOn the other hand, the basic living cost is rising too fast, so that the po

or are harder to make living than the rich.or are harder to make living than the rich. Cost of education, medical care and housingCost of education, medical care and housing

Average income by SectorAverage income by Sector （（ 20022002 ））

SectorSector Average Average incomeincome

Contribution Contribution to employmeto employmentnt（（ %% ））

FarmingFarming ，， ForestryForestry ，， Animal Husbandry and FisAnimal Husbandry and Fisheryhery

63986398 4.424.42

Mining and QuarryingMining and Quarrying 1101711017 4.454.45

ManufacturingManufacturing 1100111001 27.1727.17

Production and Supply of Electricity Gas and WaterProduction and Supply of Electricity Gas and Water 1644016440 2.712.71

ConstructionConstruction 1027910279 7.607.60

TransportTransport ，， storagestorage ，， Post and TelecommunicPost and Telecommunication Servicesation Services

1604416044 2.832.83

Wholesale and Retail Trade and Catering Services Wholesale and Retail Trade and Catering Services 93989398 5.805.80

SectorSector Average Average incomeincome

Contribution tContribution to employmeno employmentt（（ %% ））

Finance and InsuranceFinance and Insurance 1913519135 3.223.22

Real EstateReal Estate 1550115501 1.091.09

Social ServicesSocial Services 1349913499

Health CareHealth Care ，， Sports and Social WelfareSports and Social Welfare 1479514795 4.434.43

Scientific Research and Polytechnic ServicesScientific Research and Polytechnic Services 1911319113 2.022.02


4 Policies to reduce urban poverty4 Policies to reduce urban poverty

4.1Features of policies4.1Features of policies4.2Policies and measures4.2Policies and measures 4.2.1Increase employment4.2.1Increase employment 4.2.2Security system for laid-off workers4.2.2Security system for laid-off workers 4.2.3Unemployment insurance4.2.3Unemployment insurance 4.2.4Minimum security system for urban residents4.2.4Minimum security system for urban residents 4.2.5Public services and social relief4.2.5Public services and social relief 4.2.6Other policies4.2.6Other policies ChangesChanges ：： 4.2.24.2.2 、、 4.2.34.2.3 、、 4.2.4 are regarded as the three major lines 4.2.4 are regarded as the three major lines

of securityof security ，， 4.2.3 and 4.2.4 shall take their place shortly4.2.3 and 4.2.4 shall take their place shortly ，， laid-off issue anlaid-off issue and unemployment insurance issue shall be unified to one issued unemployment insurance issue shall be unified to one issue

4.3Emerging challenges in the new century4.3Emerging challenges in the new century

☆☆Create favorable conditions for employment and market accessCreate favorable conditions for employment and market access☆☆The goal is a highly-efficient social security system in a market-based The goal is a highly-efficient social security system in a market-based

economy: direct transfer payment and social poolingeconomy: direct transfer payment and social pooling☆☆Government guidanceGovernment guidance☆☆Mobilization of social resourcesMobilization of social resources☆☆Coordination of social resourcesCoordination of social resources


4.1Features of the policies4.1Features of the policies

4.2.1 Policies of increasing employment4.2.1 Policies of increasing employment（（ 11 ）） ContentContent ：： Reemployment of laid-offs and unemployed, emploReemployment of laid-offs and unemployed, emplo

yment of newly-added laborersyment of newly-added laborers（（ 22 ）） MeasuresMeasures ：： A. Reemployment projectsA. Reemployment projects B. Industrial restructuring, expanded employment sectors and numberB. Industrial restructuring, expanded employment sectors and number C. Improve reemployment service systemC. Improve reemployment service system


4.2Policies and measures4.2Policies and measures

4.2 Policies and measures4.2 Policies and measures

4.2.2Basic livelihood security system for laid-off workers4.2.2Basic livelihood security system for laid-off workers （（ 11 ）） InceptionInception ：： In 1998, the Central Party Committee and State Council issued a note that In 1998, the Central Party Committee and State Council issued a note that

under the basic livelihood security system, employers shall establish reemplounder the basic livelihood security system, employers shall establish reemployment center or similar institutions for the laid-off workers from enterprises, pyment center or similar institutions for the laid-off workers from enterprises, provide them with allowance and pay the pension, medical and unemployment rovide them with allowance and pay the pension, medical and unemployment insurance fees for them.insurance fees for them.

（（ 22 ）） ExecutorsExecutors ：： Reemployment centers in all sectorsReemployment centers in all sectors ，托管下岗职工。，托管下岗职工。（（ 33 ）） ApproachApproach ：： Deliver allowance to laid-offs by month, with no exceeding of 3 years; pay the iDeliver allowance to laid-offs by month, with no exceeding of 3 years; pay the i

nsurance fees for the laid-offs; instruct or train the unemployed to help them fnsurance fees for the laid-offs; instruct or train the unemployed to help them find a job.ind a job.

（（ 44 ）） SourceSource ：： government input government input 1/31/3 ；； employer 1/3employer 1/3 ；； social pooling 1social pooling 1/3/3 。。

Financing and Expenditure of Re-employment Service CFinancing and Expenditure of Re-employment Service Centerenter （（ 20032003 ）（）（ 100 million Yuan100 million Yuan ））

FinancingFinancing TotalTotal From From EnterprisesEnterprises

From From SocietySociety

From From GovernmenGovernment Financet Finance

120120 19.419.4 17.317.3 83.383.3

ExpendituExpenditurere

TotalTotal Basic Living Basic Living Expense Expense

Medical Medical InsuranceInsurance

ExpenseExpense

UnemploymUnemployment ent InsuranceInsurance

ExpenseExpense

Old-ageOld-age

InsuranceInsurance

ExpenseExpense

121.4121.4 71.871.8 6.36.3 5.25.2 35.035.0

Resource ： China Labor Statistics Yearbook 2004 。

4.2 Policies and measures4.2 Policies and measures4.2.3 Unemployment insurance4.2.3 Unemployment insurance

（（ 11 ）） InceptionInception ：： 19861986 ：： Tentative Regulation on Temporary Unemployment Insurance for State-Tentative Regulation on Temporary Unemployment Insurance for State-

Owned Enterprise Laid-off Workers Owned Enterprise Laid-off Workers

19991999 ：： Regulation on Unemployment InsuranceRegulation on Unemployment Insurance

A social system to provide material support and reemployment opportunity for A social system to provide material support and reemployment opportunity for those involuntary unemployed.those involuntary unemployed.

（（ 22 ）） ApproachApproach ：： Execution by legal force, and insurance funds established by Execution by legal force, and insurance funds established by societysociety

（（ 33 ）） CoverageCoverage ：： Staff of all public units and enterprises throughout urban ChiStaff of all public units and enterprises throughout urban China. It covered 96% of all workers in 2002 and 99% in 2003. na. It covered 96% of all workers in 2002 and 99% in 2003.

（（ 44 ）） EvolvementEvolvement

4.2 Policies and measures4.2 Policies and measures4.2.4 Minimum security system for urban residents4.2.4 Minimum security system for urban residents （（ 11 ）） Inception:Inception: Pilot in 1993 Pilot in 1993 ，， established by the government in 1997, thestablished by the government in 1997, th

e relevant Regulation on minimum security was promulgated in 1999. The goe relevant Regulation on minimum security was promulgated in 1999. The government shoulder the responsibility to provide relief for those who can not suvernment shoulder the responsibility to provide relief for those who can not survive even when they have received medical benefit, unemployment insurancrvive even when they have received medical benefit, unemployment insurance, pension and the income above the official minimum income line. e, pension and the income above the official minimum income line.

（（ 22 ）） SourceSource ：： Local financial budget, fund earmarked for social relief, etc. Local financial budget, fund earmarked for social relief, etc. （（ 33 ）） StandardStandard ：： Up to the local particularities, allowing for changes of the Up to the local particularities, allowing for changes of the

necessities items and their pricesnecessities items and their prices （（ 44 ）） ExecutionExecution ：： Applied by individuals, inspected and approved by goverApplied by individuals, inspected and approved by gover

nment nment A. Those urban residents without provision, supporter or provider for their liveliA. Those urban residents without provision, supporter or provider for their liveli

hoods are entitled to full allowancehoods are entitled to full allowance B. Those with meager income may cover the gap between their income level aB. Those with meager income may cover the gap between their income level a

nd local minimum security level with the corresponding amount of the allowannd local minimum security level with the corresponding amount of the allowance.ce.

Number of Poor Receiving Minimum Security Allowance in Urban AreasNumber of Poor Receiving Minimum Security Allowance in Urban Areas （（ 110000 Person0000 Person ））

Any changes happening to their income, the allowance may be pended, Any changes happening to their income, the allowance may be pended, reduced or increased.reduced or increased.

Local governments shall support them by instructing them of employment Local governments shall support them by instructing them of employment and self-employed business apart from the delivery of allowance.and self-employed business apart from the delivery of allowance.

Open to the public and supervised by the publicOpen to the public and supervised by the public

YearYear 19991999 20002000 20012001 20022002 20032003 20042004

NumberNumber 265.9265.9 402.6402.6 1170.71170.7 2064.72064.7 2246.82246.8 22012201

proportion of minimum allowance in the aggregate government budgetproportion of minimum allowance in the aggregate government budget ：： 0.11% in 10.11% in 1998998 ，， 0.48% in 20020.48% in 2002

Central finance input 9.2 billion RMB in 2003Central finance input 9.2 billion RMB in 2003 ；； local finance input 15.1 billion RMBlocal finance input 15.1 billion RMB In 2003In 2003 ，， 930 households were benefited, among which 1.793 million on job, 5.184 930 households were benefited, among which 1.793 million on job, 5.184

million laid off, 907 thousand retired, unemployed 4.091 million and three no people million laid off, 907 thousand retired, unemployed 4.091 million and three no people 9.999 million.9.999 million.


4.2.5 Public service system and social relief system4.2.5 Public service system and social relief system Domains relevantDomains relevant ：： Medical care, education, employment, housing and disMedical care, education, employment, housing and dis

aster relief.aster relief. A. Targets: A. Targets: Those who are entitled to low income insurance, extremely poor staff, lThose who are entitled to low income insurance, extremely poor staff, l

ow income retirees, laid-offs, chronicle unemployed, poor with disease.ow income retirees, laid-offs, chronicle unemployed, poor with disease. ProjectsProjects ：： medical care and medicinesmedical care and medicines ResourcesResources ：： government input and social pooling.government input and social pooling. B. Education supportB. Education support ：： Free occupational trainingFree occupational training Retraining to farmers with land lost, migrant laborers and disabled.Retraining to farmers with land lost, migrant laborers and disabled.C. Policies of disaster reliefC. Policies of disaster relief ：： Material donation and service to the disaster-stricMaterial donation and service to the disaster-stric

ken poorken poorNumber of poor having received emergency relief in urban China ( 10 thousand person time)Number of poor having received emergency relief in urban China ( 10 thousand person time)

YearYear 19991999 20002000 20012001 20022002

Person timePerson time 157.1157.1 155.6155.6 213.9213.9 321.4321.4

Source ： China Statistics Yearbook 2003 。

Number of Social Welfare Institutions and EnterprisesNumber of Social Welfare Institutions and Enterprises （（ 20022002 ）（）（ UnitsUnits ））

ItemItem Number of Institution or Number of Institution or Enterprise (Units)Enterprise (Units)

National TotalNational Total 8976689766

Adopting Social Welfare InstitutionsAdopting Social Welfare Institutions 3820038200

Run by GovernmentsRun by Governments 30823082

Run by Collective UnitsRun by Collective Units 3412234122

Run by Private UnitsRun by Private Units 996996

Social Welfare EnterprisesSocial Welfare Enterprises 3575835758

Run by GovenmentsRun by Govenments 15771577

Run by Collective UnitsRun by Collective Units 2815328153

Run by Private UnitsRun by Private Units 60286028

Administration Agencies for MartyrsAdministration Agencies for Martyrs 28262826

Community Service InstitutionsCommunity Service Institutions 78987898


Basic Statistics on Social Welfare Relief FundsBasic Statistics on Social Welfare Relief Funds （（ 0.1billion RMB0.1billion RMB ））

ItemItem 19991999 20002000 20012001 20022002

National TotalNational Total 143143 168168 178178 181181

Government FundsGovernment Funds 72.772.7 8888 108108 113113

Collective FundsCollective Funds 70.370.3 8080 7070 6868

ResourceResource ：： China Statistical Yearbook 2003China Statistical Yearbook 2003 。。

Regulation on Managing the Poor with No Regulation on Managing the Poor with No Livelihoods in Urban AreasLivelihoods in Urban Areas

☆☆ In 2003, government announced to support the vagabonds and poor witIn 2003, government announced to support the vagabonds and poor without livelihoods in urban areas. hout livelihoods in urban areas.

☆☆ Local governments set up relief stations with the fund needed by the staLocal governments set up relief stations with the fund needed by the stations put into government budgettions put into government budget

☆☆ Public security, health, transportation, railway, urban security managemPublic security, health, transportation, railway, urban security management agencies.ent agencies.

☆☆ Items to be provided: foodⅰItems to be provided: foodⅰ ；ⅱ；ⅱ housinghousing ；ⅲ；ⅲ medical caremedical care ；ⅳ；ⅳ ccost of travel back homeost of travel back home

☆☆ County government shall take steps to address the production and livinCounty government shall take steps to address the production and living problems, raise the awareness of people to support and take care of tg problems, raise the awareness of people to support and take care of the disabled, youth and the elderly.he disabled, youth and the elderly.


4.2.6 Other policies4.2.6 Other policies

A. Fiscal policiesA. Fiscal policies ：： Special financial inputSpecial financial input

Increase the proportion of government input in the total fundIncrease the proportion of government input in the total fund

Tax policiesTax policies ：： adjust the total amount of tax collected from the poor anadjust the total amount of tax collected from the poor and others and some preferential taxation policies to the poor. d others and some preferential taxation policies to the poor.

B. Monetary policiesB. Monetary policies ：： Credit preference to labor-intensive, medium and small sized and self-eCredit preference to labor-intensive, medium and small sized and self-e

mployed enterprises.mployed enterprises.

C. Income distribution policiesC. Income distribution policies ：： Interfere the first time distribution in a reasonable way and adjust the strInterfere the first time distribution in a reasonable way and adjust the str

ucture of second time distribution.ucture of second time distribution.

4.3 Emerging Challenges4.3 Emerging Challenges

4.3.1Raise poverty standard to refine the targets.4.3.1Raise poverty standard to refine the targets. 4.3.2Poverty of mobile population4.3.2Poverty of mobile population 4.3.3Neglect and exclusion of vulnerable groups: unofficial grou4.3.3Neglect and exclusion of vulnerable groups: unofficial grou

psps 4.3.4Complete social security system4.3.4Complete social security system ：： Expand coverage and Expand coverage and

improve fundraisingimprove fundraising

5 Difference of poverty (poverty reduction) in urban and 5 Difference of poverty (poverty reduction) in urban and rural areasrural areas

5.1 Difference of determinants5.1 Difference of determinantsRuralRural ：： Low agricultural revenueLow agricultural revenue Poor production and living conditionPoor production and living condition High burdenHigh burden Unreasonable resource distributionUnreasonable resource distribution （（ Economic transition brings positive effectEconomic transition brings positive effect ））UrbanUrban ：： Negative effect of economic transitionNegative effect of economic transition Incomplete social security systemIncomplete social security system Unreasonable resources distribution among different incUnreasonable resources distribution among different inc

ome groupsome groups

5 Difference of poverty (poverty reduction) in urban and 5 Difference of poverty (poverty reduction) in urban and rural areasrural areas

5.2 Difference of poverty reduction strategies5.2 Difference of poverty reduction strategiesRuralRural ：： Enhance productivityEnhance productivity Promote rural development: improve production and livinPromote rural development: improve production and livin

g conditions.g conditions. Reduce burden on farmersReduce burden on farmers Distribution of public resources in favor of rural areasDistribution of public resources in favor of rural areas Complete rural market economic systemComplete rural market economic systemUrbanUrban ：： Promote employmentPromote employment Eradicate polarization of rich and poorEradicate polarization of rich and poor Complete social security systemComplete social security system Eradicate public resource distribution problems Eradicate public resource distribution problems

The EndThe End ！！

Documents

Introduction of Urban Poverty Reduction in China