Poverty and Inequality in China

Poverty and Inequality in China
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Poverty and Inequality in China
For years, poverty eradication has been one of the main goals on the international stage. People living in poverty have limited or no access to basic human needs, including water, food, shelter, health, and education (China Power, 2020). Poverty is usually measured by income level. According to the World Bank, the current international poverty line is $1.90 per day. In 1990, the global poverty rate stood at 36.2%. Based on the most recent statistic posted in 2018, the global poverty rate is at 8.7%. China has been responsible for a 60% decrease in the poverty rate. This has resulted mainly from the country’s transformation from an agrarian society and into the world’s second-largest economy. In December of 2020, President Xi Jinping declared a significant victory over poverty in the country. However, according to current household surveys, millions of people in China are still struggling with poverty (China Power, 2020). Hence, this paper explores poverty in China to determine the current situation, potential causes, consequences, and ways of reducing poverty and inequality in the country.
A majority of the poor in China live in rural areas (Wang et al., 2020). In the countryside, farming is the only occupation for many Chinese people. However, in urban areas, residents enjoy a well-grounded social security system that protects them from poverty. Following the world’s sustainable development goals (SDGs), China established a campaign to eradicate poverty ten years ahead of time. By 2018, the country’s poverty rate had declined by 1.7% (Wang et al., 2020). Given China’s strong leadership and rapid economic growth, the government could see extreme poverty eliminated from its rural areas. Still, as seen in the country’s 2020 figures, poverty eradication can be a herculean task. Poverty is a multidimensional topic. Therefore, even if absolute poverty is eliminated in China, relative poverty will still exist in the long run. This means that inequality in the country will continue to prevail for many years (Yangyang et al., 2019).
According to Zhou et al. (2020), poverty and ill-health are believed to have a causality relationship. Poverty-led illnesses unduly affect the poor, leading to an unending cycle of poverty among these populations. Among the poor, ill-health is a fundamental source of poverty because poor people have to live in unsanitary environments without clean water, decent shelter, and good food (Zhou et al., 2020). Unlike poverty, inequality often results from factors that are not within an individual’s control. In China, the largest source of inequality is the large income gap between different income groups. In China, the wealthiest 20% earn 50.24% of the total household income, while the most deficient 20% make a mere 4.27 % of the total household income (Gustafsson & Sai, 2020). Another source of inequality in the country is the income gap between rural and urban sectors. The World Bank reported that general living standards in urban areas are much higher than those published i...