Global poverty has been falling for decades: in the 1960s, around 50 percent of the world population was living in extreme poverty (defined as living on less than $1.90 per day); today, that number is around 10 percent. China has been at the forefront of this achievement and is responsible for over 70 percent of the fall in poverty levels worldwide over the past forty years.

Chinese poverty reduction is a success story of historical significance. Over the past forty years the Chinese government has embarked on a campaign to reduce poverty and turn the nation into a middle income country within a generation. The result has been unprecedented progress, with more people lifted out of poverty more quickly than has ever been achieved by humanity.

From the announcement of targeted economic reforms in 1978, the number of extremely poor Chinese went from 88 percent of the population to around 2 percent in latest estimates with over 700 million people being lifted out of extreme poverty in forty years. This has been achieved through a concerted modernization of the economy.  Agriculture has reduced in significance as a share of employment from over 75 percent to under 25 percent today, with manufacturing and now services accounting for the lion’s share of employment. This has been associated with a process of urbanization and a commitment to universal education and health services as well as access to clean water and electricity. Whereas barely 20 percent of the population lived in urban areas forty years ago, now over 60 percent of the population of 1.4 billon citizens are urban dwellers. Along with urbanization has come dramatic increases of 12 years in life expectancy to 77 years. Average incomes increased by over forty times and when adjusted by purchasing power by over 60 times.

The ambition of the Chinese government, as announced by President Xi Jinping at the Global Poverty Reduction Forum in 2015, is to eradicate extreme poverty in the country by 2020. Considering China’s extraordinary economic success, this objective appears to be in reach.

How has China achieved such a remarkable feat and what lessons can developing countries learn from China’s poverty reduction?

The key to the Chinese success is that, together with strong economic growth, development policies specifically aimed at poverty reduction have been firmly in place since the market reforms of the 1970s. The OECD identifies development-oriented leadership, and the building of a national consensus, as the main factors that have allowed for the near-elimination of poverty. This entails a rigorous implementation of development and social policies, a uniform system for measuring policy performance, and the concerted effort of the private and public sector, motivated by a unifying national commitment to shared goals. Defining precise developmental goals, and generating a collective impetus toward their achievement for the entire population, including both the public and the private sectors, has played a crucial role in the Chinese poverty reduction strategy, setting an example for developing countries in their struggle against poverty.

The achievement of such ambitious goals would not have been possible without coherent and effective policy implementation. The Chinese case is unique in the way development policies were trialed and if successful scaled up and rolled out nationwide, or withdrawn, if ineffective, in a dynamic learning process that proved extremely effective. Policy trial and experimentation has been common since the beginning of the Chinese poverty reduction effort: the effectiveness of policies, rolled out in local areas first, has been assessed empirically, and implemented on a national scale thanks to careful monitoring and the rotation of civil servants around the vast country.

The introduction of land ownership which spurred agricultural productivity in the late 1970s is, for example, the result of a successful village-wide experiment of “household land responsibility’’. In this as in other areas of development carefully planned experiments with close monitoring of the results, adjustments to improve outcomes through trial and error and then scaling of the lessons to a widening number of areas and people has been at the heart of the Chinesepoverty reduction strategy. The combination of the depth and breadth of commitment to the objectives and the process of learning by doing which is the most important lesson from China.

Funding for policy implementation has been sought both from public investment in infrastructure and technological innovation, but also through the responsible use of international resources and investments, which facilitated the learning, transformation and adaptation of best practices internationally. This remarkable openness to examining global experiences and being open to adapting and implementing changes in consultation with local communities is another vital lesson of the Chinese experience.

An early result from the initial institutional effort towards poverty reduction has been mass job creation, as private and public investments, and the construction of a network of transport and communication infrastructure created new jobs, and shifted workers towards the productive sectors of manufacturing and services. Today, over 90 percent of employment and 70 percent of GDP comes from the private sector. This would not have been possible without the creation of an impressive network of educational, social, and research institutions, and widespread transport and communication links. With such a solid underlying structure in place, the Chinese government has created the springboard for poor citizens to lift themselves out of poverty, inspiring a sense of responsibility and allowing the access of educational and technological resources. Self-reliance has been a key theme in this process, both at the individual, community and the national level, to an unprecedented extent for a developing country.

The Chinese growth phenomenon, impressive as it is, does have its risks: particularly, the environmental sustainability of such rapid growth. This has resulted in a need to reduce the intensity of water and energy use and overcome pollution and the reliance on fossil fuels. These challenges are recognized by the Government, and part of the 2020 ambition to eliminate extreme poverty.

Not only has China established itself as a global economic power, but it has also accepted its role in international governance. Beyond the commitment to global environmental standards and its leadership in combating climate change, it also is playing a growing role in overcoming poverty worldwide. Chinese investments have targeted the African continent, providing aid and, importantly, contributing to the development of better infrastructure for transport, communication, and market development. Its leadership role in establishing the Asia Infrastructure Investment Bank, New Development Bank, and One Belt, One Road Initiative similarly reflect these broader international commitments to shared development.

Over the past forty years China has demonstrated that the scourge of poverty can be defeated. The Chinese experience offers vital lessons which demonstrate that with the necessary will the global targets of the Sustainable Development Goals can be achieved. As China continues to focus on the elimination of extreme poverty domestically and further improving the lives of its citizens, its domestic achievements in poverty reduction increasingly will be strengthened by an emphasis on environmental sustainability and the strengthening its existing effort in helping eradicating global poverty and contributing to a more secure and sustainable future for all.

Ian Goldin is a professor of globalization and development at the University of Oxford. The views expressed do not necessarily reflect those of China Watch.

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