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The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life, the sick, the needy and the handicapped. Hubert Humphrey, Nov. 1, 1977.

• • •

In 1850, when Western nations were the richest on earth, capitalists created the first market economy. By privatizing credit, land, and labor, they allowed human society to be regulated by the market. In 1950, when China was the poorest nation on earth, communists created an organic economy by subordinating credit, land, and labor to the service of society and trusting the government to regulate it. In 2020, after growing twice as fast, China’s economy is overtaking market economies in two important aspects: eliminating poverty and inequality.

• • •

In 2000, the United Nations set six Millennium Development Goals: eliminate extreme poverty, hunger, disease, inadequate shelter, exclusion, and gender bias in education by 2015 and, since then, on Poverty Relief Day, China’s President and Prime Minister, trailed by TV crews, have visited rural villages to remind urbanites what poverty looks like. In 2016, urban poverty disappeared and, by June 1, 2021, rural poverty will follow it and every Chinese in the lower half of the income distribution will own a home[1]. Here we briefly retrace the steps in this remarkable program before meeting the poorest man in a poor village.

In 1993, Shanghai’s successful Minimum Livelihood Guarantee Trial Spot[2] went national as today’s social safety net, dībǎo, which pays the difference between people’s actual income and the ‘dībǎo line,’ set based on local living costs. Though the qualifying process is daunting, the dībǎo gives recipients discretionary money and access to benefits like inexpensive medical insurance.

An ethnic Miao[3] family exemplified rural poverty in 2008. They owned a little adobe house, farmed their tiny plot, sold blood, and did odd jobs to get by. With three children (minorities are exempt from family planning), they were unable to afford furniture so their clothes were folded on the floor and their entertainment was a black-and-white TV. They received a monthly living allowance of two hundred dollars from the local government, the husband’s occasional day jobs earned ten to twenty dollars, and blood-selling brought in another hundred dollars. His wife said this paid for sixty pounds of rice, two packs of salt, a kilo of peppers and a bag of washing powder, electricity and transportation. Their village headman explained, “Our village population is 1,770 and more than two hundred people live on blood-selling. Our land is arid, seven hundred villagers’ homes have no arable land at all and, without a road, they walk three miles for drinking water.”

Rural pensions, introduced in 2009, lowered poverty to fourteen percent then, in 2014, workers’ compensation, maternity benefits, unemployment insurance, skills training and equal access to urban employment reduced it to seven percent.

Next, tens of thousands of anti-poverty teams moved into poor villages to help them join the cash economy by growing mushrooms, planting pear trees, raising mohair goats, or hosting eco-tourists–anything to bring them into the cash economy. By 2018, pinned to the door of every poor household was a laminated sheet listing its occupants, the causes of their poverty, their remediation program, a completion date and the name, photograph and phone number of the responsible official. Corporations pitched in. Foxconn, Apple’s assembler, moved two-hundred thousand jobs inland, Hewlett-Packard moved huge factories to Xinjiang, and Beijing moved entire universities.

But it was infrastructure–roads, railways, Internet and drones–that tipped the scales. By 2019, lives in one-hundred twenty-three thousand poor villages had been transformed by high-speed, low-cost Internet service that made e-commerce, distance education, remote healthcare and delivery of public services possible. Isolated villages soon averaged four daily drone pickups and demand for drone piloting classes exploded as crop-spraying, land surveying, and product delivery made off-farm employment the majority of rural income.

To combat isolation, Congress took $120 billion from vehicle sales tax revenues and built 150,000 miles of new rural roads, one of which reached Mashuping[4], an isolated cliff village on the bank of the Yellow River and one of the poorest in Shaanxi Province. Villagers cultivated apples and Sichuan pepper trees but were forced to sell their produce cheaply to the few dealers who came by motorbike. Then a new five-hundred mile, riverbank highway brought ‘targeted anti-poverty teams’ and now, said a grower, “Our apples sell out when they’re still hanging on the trees”. By 2019, per capita income was twice the national poverty level.

Villages like Liangjiahe, where Xi Jinping grew up, exploit unique niches. Though cabbage fields still line its single road, the canny inhabitants cultivate tourists, charging thousands of visitors eight dollars to hear tales of Xi’s Four Hardships–flea bites, bad food, hard labour, and assimilating into the peasantry. They give three hundred overnight guests a taste of Xi’s boyhood in cave inns decorated with vintage Mao posters and kerosene lanterns and furnished with hard brick beds warmed by earth stoves. “All authentic, of course. We want to protect the Liangjiahe brand image,” a young guide brightly explained.

Dedicated software apps help rural laborers connect with employment opportunities, veterans and disabled folk to find piecework, and young people returning home to start businesses. In one Zhejiang Trial Spot, five hundred villages employ 200,000 locals to promote local products and skills in e-commerce niches where villages have organized into clusters around market towns. By 2019, rural online stores employed thirty-million people, creating an e-commerce market bigger than Europe’s.

Beijing judges anti-poverty programs successful when ninety percent of villagers swear, in writing, that they are no longer poor and after roaming teams of auditors conduct followup studies and send their findings, with videos, to anti-poverty officers. Beijing plans to recoup its entire poverty alleviation investment by 2040, through e-sales taxes.

In 2016 the government shifted ten percent of the equity in the most valuable SOEs[5] into the social security fund and President Xi set a final goal[6], “If we lift ten million rural people out of poverty each year until 2020, the social security system will provide adequate financial support for our twenty-million disabled people.”

Accelerating inland growth has triggered coastal labor shortages and forced employers to automate, raise productivity, and move up the value chain–just as Beijing intended. In 2019, Mentech, a telecom manufacturer in coastal Dongguan, offered regular wages plus $1,100 guaranteed monthly overtime, air-conditioned dorms, free Wi-Fi, and birthday presents. Monthly manufacturing wages averaged $1800 in 2019[7] and overtime, bonuses, company housing and free meals allow workers to send money home. Factory workers are generally young, happy, and carefree, gossiping, flirting, listening to music and–except in large corporations–wearing what they please.

Today, adjusted for productivity, regulations and benefits, Chinese employees cost[8] employers more than their American cousins and barely two percent of them pay taxes.

Until recently, millions of migrant workers who contributed to urban retirement funds could only collect full pensions in their home provinces, and local governments had no money for them when they returned at the end of their working lives. Despite pleas from cash-starved inland provinces, rich coastal provinces clung to multi-billion surpluses so Beijing endowed a trillion-dollar National Pension Insurance Program in 2011 and strong-armed provinces to join and the People’s Daily drummed up support by appealing to national pride, “In developed countries like America–whose Gini index sometimes reaches .41–income disparities are eased through gradually increasing taxation on the wealthy and improving welfare systems to help the poor. China should learn from America’s experience.” In 2014, civil servants and academics joined the national scheme and, in 2019, Beijing issued a billion electronic cards that access personal and medical records, dispense social security benefits, receive government subsidies and reimbursements, and pay bills.

As wealth redistribution becomes a national priority, economists[9] are finding that inequality statistics have been exaggerated because land, housing and food are much cheaper inland–though their quality is identical–and rural incomes have fifty percent more purchasing power than coastal wages.

Adjusted for temporary migration, inequality shrinks even further. Until 2019, economists counted people by where their hukou were registered rather than where they actually lived, so the movement of three hundred million migrant workers distorted statistics severely. In reality, the coastal provinces have millions more migrant residents than their registered populations and the inland provinces have millions less, so a worker moving from the interior to the coast lifts inequality indicators because she contributes to aggregate income at her coastal destination but is still counted as living in her rural home. When analysts corrected[10] the error, they found that regional inequality has been declining by 1.1 percent annually since 1978. In 2002 for example, it took the combined earnings of fourteen Guizhou workers[11] to equal one Shanghainese but, by 2019, the number had dropped to five. Nor is the structural gap as painful as it sounds. Inlanders and their friends got richer every year and, to them, Shanghai’s glitzy lifestyle was no more relevant than Manhattan’s is to folks in Little Rock, AK.

Examining China’s inequalities from a global perspective is enlightening. In 2018, residents of coastal Guangdong Province were five times richer than those in inland Gansu–but Gansu folk were better off than average Armenians or Ukrainians–while residents of wealthy Beijing, Shanghai, Tianjin, and Jiangsu not only earned more than the average American but their median savings, $130,000 were higher, too.

Confucian attitudes will help the Great Rebalancing, since everyone knows the Master’s admonition, “The ruler of a state need not worry that his people are poor but that wealth is inequitably distributed for, if wealth is equitably distributed, there is no poverty.”

Gao Village. A Closer Look, by Prof. C.F. Gao

The economy is in such a state that men don’t have enough money to care for elderly parents and support their wives and children. Even in good years their lives are bitter while, in bad years, they struggle to avoid starvation and death. Under those circumstances, how can you expect them to be civil–or even lawful? Mencius, 320 BC.

Who are the poor in Gao Village? How poor are they? Why are they poor?


It is difficult to talk about these issues regarding the whole village. To start with, there is no institutional set-up to regularly record household or personal incomes. There are no taxes and no tax returns. Agricultural subsidies are distributed to the villagers not according to income, but on the basis of per unit of farming land. Secondly, most Gao Village income is from migrant workers, but hometown authorities have no knowledge of what migrant workers earn far away, all over the country. Local authorities will come up with some guesstimates if and when they are required to provide some statistics for government authorities. Finally, while there is a motivation for the provincial and even county authorities to present an average income figure as high as possible, because that can be a performance index for promotion, there is a motivation for the authorities at the village and village committee level to present the average income figure as low as possible. There are two main reasons for this behavior. Village and village committee officials do not have a promotion issue because they are villagers themselves and will never get promoted anywhere. Another reason for not reporting higher or even real income is that they want to get as many state subsidies as they can, and so the poorer the statistics show their villages to be, the better.

For those reasons, I will present a case study of one individual who is considered one of the poorest, if not the poorest in Gao Village. His name is Gao Renfang, but he is nicknamed Lati.

Gao Lati the Person

Gao Renfang is his official name, but he is usually known as and called by Gao villagers Lati (“one with impetigo”). He does not have impetigo anymore, but he did when he was little. As described in Gao Village, impetigo used to be a common contagious skin infection in the area and many Gao villagers had it, especially men. One Gao villager is simply called cou lati (“an additional person with impetigo”). Another one is even called lantou (“rotten head”) because his head is full of scars. Like many other contagious diseases in Gao Village, this kind of skin disease was eliminated due to improvements in hygiene and health in the general population in the Mao era. Lati is one of two sons of my mother’s elder sister, Jiang Xianhua. The other son, Gao Shihua, usually known as Baoshui, was not born a Gao villager but came to Gao Village from Wan Village with his mother when she married a Gao villager, after her former husband had passed away. Baoshui was a village barefoot doctor, and, as described in Gao Village, was the one who influenced me to become involved in Gao Village clan politics during the Cultural Revolution. Baoshui died of lung cancer in the early 1990s, but is survived by his wife and three children. Lati was 65 years old in 2015 and married with three children, and his wife Yuangui is from Wan Village, where Lati’s mother had her first family. In fact Lati and Yuangui are cousins, a blood relationship so close that their children were born with lower than average health and intelligence.

Marriages arranged between cousins were not uncommon in those days, partly because of the lack of knowledge of the risks involved, but also partly because of economic considerations. When two families of relatives arrange a marriage, it is not necessary to have a go-between to carry out sometimes complex and costly negotiations. As the two families know each other well, matters such as the dowry and gifts of this and that kind can be less difficult to manage. Furthermore, the relationship between the two families can be made closer with a marriage. This is called qin Shang jia qin, meaning to cement old ties by adding a new relative. One of their sons, Zhimin, developed epilepsy early on during childhood and died in his late 205 in 2006. Their daughter Pingping was born with some defect on her face and was considered unmarriageable. My family helped Pingping get a job as a maid to look after my ex-wife’s parents in Xiamen for some years. My ex-wife’s parents, two retired professors at Xiamen University, liked the honest, hardworking, and unassuming Pingping and even helped her to have an operation, which made her look much better. She left Xiamen when she married a man in Xiangshuitan, not very far from Gao Village.

Pingping has a son and a daughter now; a very good ending, apparently. The two retired professors have fond memories of Pingping to this day. Lati’s son Zhihua works as a migrant worker in Xiamen. Lati is considered by the villagers a laoshi ren (“simple and honest person”). The term laoshi ren is difficult to render in English, though the name of Voltaire’s innocent and naive Candide, when translated into Chinese by Fu Lai, was rendered laoshi ren. Lati can be described as a person who is the opposite of “slick and sly,” and is a person who is inarticulate and timid, but hard working. I will give an example as illustration, which not only shows what kind of person Gao Lati is, but also what kind of interactions are possible among the three parties of local governance: the State, the government agent, and the villagers.

An Issue of Dibao for Lati

There are several Gao villagers who are in the category of what is called dibao, which literally translates as “low guarantee” and means the minimum living standard guarantee, a kind of social welfare. Those who are categorized as dibao persons are considered to be poor enough to receive annual government support in cash, the amount of which in 2013 was RMB 1,350. Lati is one of the Gao villagers belonging to the dibao category. In 2013, Lati went to the Yinbaohu Township administration to get his allowance, using his household registration card. For some reason, Lati was given RMB 2,700, two people’s entitlement.

Lati did not ask why he was given that amount, or whether he was given too much by mistake or whether he should pass half of that money to someone else, but he took the money, probably happily. A few weeks later, the then-chairman of the Qinglin Village Committee, a person from Jiang Village, paid Lati a visit, during which he demanded Lati give back RMB 2,000. Naturally Lati would not agree, as it meant he would only retain RMB 700. Chairman Jiang told Lati in no uncertain terms that if Lati did not give him RMB 2,000, he would exclude Lati from dibao in 2014. Confused by the situation and frightened by the threat, Lati complied and Chairman Jiang took the money. During our chat I asked Lati why he gave in like that. Lati said he was afraid of being excluded from dibao and that RMB 700 was better than nothing. Lati did not even dare to ask for a receipt, though I assume even if he did ask he would not get one anyway. In the end, Lati was 650 short of his due, the money that Chairman Jiang took remained unaccountable, and Lati did not receive any payment in 2014. For some reason, I was more angry than Lati after I was retold the story.

I immediately asked my brother Changxian to telephone Xu Congchang, who worked as a social work officer in the Yinbaohu Township government, to see if I could pay him a visit. In fact, I had met Congchang the night before when he came to a celebration dinner for my nephew’s wedding. Congchang and I were good friends back when I was in Gao Village, and we slept near each other on bunk beds when we participated in local militia training together. Later, tons haul; lotned the Chinese navy and we kept correspondence for some years belitre I Iril Gao Village. I walked to Xu Village and talked to Congchang about Lati’s case. Congchang was sympathetic and promised to look into the matter when he returned to work from the Chinese New Year holiday. Before I left Gao Village, I also asked Changxian to telephone Congchang to make sure that the matter had been dealt with. The latest I heard is that Lati is getting paid as a dibao person for the year 2015. As for 2014, the issue is too murky to clarify, I was told. The party secretary of the township government had actually paid Lati a visit to tell him to keep the matter quiet.

Work, Income, and Life

Lati is in poor health, is weak, often coughs due to bronchitis, and has stomach complaints all the time. He hates the cold weather because that makes his cough worse. We used to be next-door neighbors and one thing I remember of Lati as a child is that he was known to have an irresistible desire to eat charcoal, though I had never seen him doing it myself. He used to be a migrant in Guangdong working as a simple mechanic at construction sites. He taught himself how to work on engines during the Mao era, when Gao Village bought an engine pump to pump water from the river to irrigate rice fields. The pump engine would usually run day and night during summer, and Lati was one of those who would stay at the pump station on night duty. Even this kind of simple skill proved useful when he went to Guangdong in the late 1980s. However, as his son Zhimin’s illness got worse, he had to give up his work in Guangdong to go back to Gao Village, with great regret. For one thing, he preferred the warm weather in Guangdong where he felt much healthier, he told me. Now Lati is too old and weak to be a migrant worker.

He and his wife Yuangui work on a little more than six mu of land. Because Lati is weak and in poor health, most of the physically strenuous work is actually done by Yuangui, who is stronger and healthier. Based on the price index in 2014, what Lati and Yuangui produced was priced about RMB 15,000. Supposing that both of them spent 200 days in a year working in the field, each would earn only RMB 37.5 a day. They probably spend less than 200 days a year working on a little more than six mu of land, but their daily earning would not be more than RMB 5o a day. However, this income is considerably higher than the official poverty line of RMB 2,30o a year, which is set by the Chinese government. Lati and Yuangui have an income of RMB 15,00o a year, which does not include the hidden income that is not calculated. First of all, this income does not include the pigs and chickens that they raise at home. Nor does it include the vegetables they grow for their own consumption. Secondly, they do occasionally earn cash from work in and around Gao Village. For instance, starting in 2015, Lati earned RMB 1,500 a year by collecting rubbish along the main road running through Gao Village.

In 2011 when I visited Gao Village, Lati was still fit enough to work at Gao Wenshu’s construction site for about RMB 100 a day plus a pack of cigarettes. Nowadays, Lati is too weak to do that but Yuangui actually still earns some money from this kind of work in Gao Village, as there is always some construction going on in the village. Lati’s son Zhihua is a migrant worker in Xiamen and now earns RMB 4,000 a month. According to Lati, his son only gives him a few hundred RMB a year. During the 2015 Chinese New Year, Zhihua came home for the festival and left RMB 600 for his parents before he left again for Xiamen. For Lati and Yuangui, this was not only disappointing but worrying. They thought, Zhihua earns a lot, so where is the money? If Zhihua could save up to build a house or for his own marriage, that would be great. But who knows what young people do these days?

When I visited Lati a couple of times in 2015, there was no evidence of lack of food. In fact, the leftovers on the dinner table were good food, like pork, fish, and tofu. When we sat down in the sun in front of Lati’s house, other villagers came along and we were treated with peanuts and tea. The peanuts tasted nice but were commercial ones they had bought from a shop. Lati ran around on an electric motorbike, which was very convenient and easy to use. His clothes—leather shoes, wool-like lined trousers, and an imitation leather jacket, which all appeared new—were more fashionable than those that Yuangui wore. Lati was proud to show me the lining of his trousers, but I guessed it was not real wool, although it still seemed to be warm enough. On the other hand, Yuangui’s shoes, trousers, and jacket were obviously made by herself. Lati told me that his jacket, trousers, and shoes were gifts from his daughter Pingping.

What Does It Mean to be Poor?

During one of those many informal chats when Gao villagers came to see me, one after another, my brother Changxian loudly proclaimed that there were no poor people in Gao Village, a statement concurred with by the other villagers present, including Lati, who said that life was infinitely better now in terms of food and clothing. There were only those who were better off versus those worse off, Changxian further commented, worse off either due to illness or laziness.

Changxian gave an example of one young Gao villager who could earn a few thousand a month and thus save up to start a family. It turned out that the young man would stop work after a couple of months and spend all the money on who knows what, before he would have to look for work again. I did try to talk to this young man but he was reticent and the only relevant information I got out of him was that work was too boring. All the same, this young man was an exception in Gao Village and even he left for Guangdong to look for work a couple of weeks after the Chinese New Year. He said goodbye to me, and added that it was too boring to stay any longer in Gao Village.

How poor is Lati then? For the Gao villagers, the fact that you are not poor is indicated by two accomplishments: that you have built a house that is up to the current standard, and that your son or sons are properly married. Girls are never an issue in rural China these days, for they can always get married. One of the consequences of the post-Mao family planning policies is that there is a huge imbalance between genders, with males far outnumbering females. In other words, the circumstances are such that almost any woman has the luxury of choice when it comes to choosing a husband. In contrast, in urban China there is a sociological phenomenon called shengna (leftover women), meaning women who remain unmarried after the age of 27.

The fact that there are women who remain unmarried in urban China can be explained in a number of ways. One is that there is in general no gender imbalance in urban China. In fact, it is possible that, if anything, there might be more females than males in the cities. This is the case because there is virtually no gender discrimination in urban centers like Beijing or Shanghai, where people would not even think of aborting a child because it is a girl. This lack of discrimination in urban centers has nothing to do with them having a higher quality of people (the so-called suzhi), as some Chinese intellectual elite would like to claim, but can be attributed to two main facts. The first fact is that away from clan villages and lineage traditions, urbanites don’t have the peer pressure or traditional value of having the male to carry on the family line.

The second fact, which is more powerful in influencing changing mentality, is that urban people have had a better welfare system for a long time, ever since the Mao era. Parents do not need, as rural people do, a son to stay with them and look after them when they are old, since they are looked after by the State. Another reason why more urban women remain unmarried is that women, for reasons that are too complex to discuss here, are not supposed to marry men whose social status is lower than theirs. A female university graduate would not marry a non-tertiary educated male; a woman with a doctorate degree would not likely seek a man without a postgraduate degree.

Most of all, and most definitely, an urban woman would not marry a migrant worker from rural China. The wall that has divided the urban and rural has never been higher. In many ways it is like a caste system. In any case, Lati and Yuangui have not accomplished either of the two achievements that is evidence of success and symbolic of not being poor. Even though their daughter has married, their surviving son Zhihua is still single at the age of 37. Every year, one of the main reasons that Lati and Yuangui want their son to come back to Gao Village during the Chinese New Year is to help him find a marriage partner. In 2015 when I was there, Zhihua was arranged to meet two women in nearby villages; however, Zhihua failed in securing a partner. They had wasted RMB 400 on the go-between, Lati complained. I was curious to know why Zhihua had failed in getting a marriage partner, as he was reasonably good looking and earned RMB 4,000 a month, which was not too bad for a rural villager in current China. Several reasons were offered.

One was that the Lati family did not have an impressive house to show, and this was of course known around the area. They had started to build a house but the project was stopped due to lack of money, as a result of Zhimin’s illness and Lati not being an earning migrant worker in Guangdong anymore. The second floor of the house has been left unfinished and they do not have the money to decorate either the interior or the exterior of the house. Compared to the other beautifully decorated and imposingly big houses in Gao Village, the description of which is in the next chapter, this decent and adequate, though not luxurious, house looks an eyesore. Another reason offered was that Zhihua is another laoshi ren, like his father: inarticulate, timid, and simple. Zhihua would not know how to start a conversation, especially among strangers. He would appear nervous in this kind of situation. This weak point was especially damaging in Zhihua’s prospect of looking for a female partner, because these days even rural young women would have had a few years of education and would have “seen the world” as they are also migrant workers. They would not start a relationship with a man if they were not attracted to him in the first instance.

This lack of attractive personality is made worse in regard to Zhihua’s prospect of finding a marriage partner by the fact that there are so many men looking for female partners. Lati could see the situation clearly. The second woman that Zhihua met during the 2015 Chinese New Year actually was a divorced woman with a child. For Lati and Zhihua, to agree to meet a woman of these circumstances was already a concession on their part. For a long time in Gao Village, according to traditional values, a divorced women was considered to be second rate for marriage, and in the mind of some even today, a breakdown of marriage is always the fault of women, just as it is considered to be the fault of the wife if she does not give birth to a son. Of course, that kind of attitude and value is eroding in China, but Lati indicated that he had lowered his standard in agreeing that his son meet a divorced woman with a child. Alas, the problem was his; on the day when Zhihua met that woman, five other men were lining up to meet her, as Chinese New Year is the time when young migrant workers return to their home villages to get married or to look for marriage partners.

Why Is Lati’s Family Poor?

Apart from the fact that he is weak and always sick, which reduces the chance of making more income on the one hand and incurs a considerable medical cost on the other, another reason is that his son Zhimin’s epilepsy meant that not only could he not make an income like other young men in the village, but he also incurred significant medical costs also. Furthermore, Zhimin’s illness meant that Lati, who could have made some money as a migrant worker for a few more years, was unable to do so. Yet another reason why the family was poor, Lati pointed out to me, was that as Zhihua was single, the family had lost income from another able person. If he had a daughter-in-law, she would work as a migrant worker earning something like RMB 3,000-4,000 a month for the family. According to Lati, his family was caught in a conundrum: unless he has a good house ready, no girl will marry his son, but he is not able to build a house unless there is additional income.

Underlining all these reasons is the fact that farming does not make enough income; not enough to get married, not enough to build a house. All the successful households in the Gao Village area are successful because of additional income from sources and work other than farming. Farming can yield you enough to eat, maybe to clothe oneself, but not enough to build the best house possible.


In this chapter, I have discussed the life of an individual, Gao Lati, and his family, to illustrate what it is to be poor in Gao Village. There are several conclusions that can be drawn from the personal life of Lati. The first one is that, in terms of income, the poor in Gao Village are still considered to be above both the World Bank’s and the Chinese government’s official poverty line. From what I can observe, this seems to be the case in the Gao Village area and in the whole of Poyang County, which is classified as one of the poor counties by the provincial authorities of Jiangxi, which itself is considered a second-tier and backward agricultural province without much industry.

There is also some anecdotal evidence that Gao Village is certainly not among the poorest in China. During the 2015 Chinese New Year, I encountered a very pretty and articulate young mother of a six-year-old child, a daughter-in-law of a Gao villager, who looked like a university student. She was from Hubei Province and worked in Hainan, but traveled back to Gao Village every Chinese New Year to see her child, who had been left behind with the grandparents. She said she liked Gao Village, much better than her home village in Hubei. She spoke perfect Mandarin and, of course, her hometown language, but also the Gao Village dialect. When she heard that I was living in Australia, she said the company where she worked produced massage armchairs that were even exported to Australia. The fact that such an able woman finds Gao Village better than her hometown is an indication that Gao Village is certainly not the poorest in China. Furthermore, two Gao Village women divorced their husbands after they had visited their husbands’ hometowns.

One man was from Hubei and the other from Sichuan. Why did the two Gao Village women want to divorce them? “Tamen tiaojian tai cha” (“their conditions are too bad”), they told me. The second conclusion is that the rural sector is still at the bottom end of Chinese society and farming, or at least household farming, is at the very end of the bottom. Gao Villagers have only recently started to enjoy some kind of welfare in terms of education, health care, and retirement, which the urban sector has taken for granted since the Mao era. The fact that there are no longer any taxes on agriculture, and that instead there are subsidies, is a great improvement for rural people.

However, the cessation of taxes and introduction of subsidies are still not enough for farmers to make a living. The villagers have to rely on earnings from migrant workers. Further evidence of the rural sector being at the very bottom end of Chinese society is the fact that even the urban unemployed would not be willing to work as a migrant worker. These days, migrant workers from rural China do not just work in foreign-owned companies such as Apple or Foxconn. State-owned Chinese firms and enterprises employ migrant workers from rural China to do the most strenuous work with the lowest pay, keeping better pay and better conditions for the urban registered workers.

The third conclusion is that the conceptualization of poverty is not something that can be taken for granted. For Gao villagers, currently what is poor is defined by the inability to build a house that is up to the current standard, and to get the family’s son or sons properly married. China may still be considered a developing country, but daily necessities such as basic food and shelter are no longer the main and only aims and purpose of life for most people, even the poorest in Gao Village.

Finally, the story of Gao Lati is relevant to the issue of the GDP in China. There have long been debates of whether China’s GDP is overestimated or under-reported. In scientific terms, there are certainly inaccuracies in the Chinese government statistics. This case study of Gao Village suggests there is no systematic record of incomes or GDP at the grass roots level in the rural sector.

The evidence from my study here seems to suggest that the GDP in the rural sector is under-reported. To what extent and in what way this has an effect on the aggregated county, and then provincial statistics, is beyond the inquiry of this book. Amazon: Gao Village Revisited. [Reprinted here by express permission of Prof. Gao].

Godfree publishes Here Comes China, a weekly newsletter of informed news and opinion.


[1] How People In China Afford Their Outrageously Expensive Homes, by Wade Shepard. Forbes, Mar 30, 2016

[2] Most legislation begins as a challenge to provincial administrators to find local solutions to national problems. They do so by creating Trial Spots, experimental programs to demonstrate their creativity, competence, and fitness for promotion. Currently there are thousands of Trial Spots underway addressing problems ranging from childhood obesity to vandalism.

[3] Blood Selling Tells Bitter Story of Poverty in China. Xinhua. 2010-09-22

[4] China’s iconic revolutionary base Yan’an bids farewell to poverty. Xinhua. 2019-05-07

[5] One quarter of the world’s most profitable corporations–mostly banks and insurance companies–are State Owned Enterprises, SOEs.

[6] In 2018 he set the goal of reducing inequality to world-leading levels–below Finland’s–by 2035.

[7] Wages in Manufacturing in China. Trading Economics. Adjusted for purchasing power parity.

[8] Oxford Economics, quoted in ‘Made in China’ labor is not actually that cheap. by Sophia Yan CNN. March 17, 2016

[9] Spatial Price Differences and Inequality in the People’s Republic of China: Housing Market Evidence,” Chao Li & John Gibson, 2014. ”Asian Development Review, MIT Press, vol. 31(1), pages 92-120, March.

[10] Regional Inequality in China allowing for Spatial Cost-of-Living Differences: Evidence from a Hedonic Analysis of Apartment Prices. Chao Li, John Gibson. IDEAS.

[11] China’s Got a $46,000 Wealth Gap Problem. Bloomberg News. May 21, 2018

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