The Philosophers' Magazine - 4th quarter 2006

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forum 64

Lessons from China

poverty & the duty of assistance

TP M

4th quarter 2006

Linda Yueh on the remarkable rate of poverty reduction in China

When considering the duty of assistance, it is essential to understand the evidence of what has been effective so that the assistance being advocated is based on a solid foundation. The extraordinary success of China in lifting 400 million people out of abject poverty in two and a half decades is certainly worth contemplating. Analysing the factors explaining poverty reduction in China will help to provide a factual basis for the debate over the moral obligation concerning the duty of assistance. China has grown at a remarkable rate since the start of market-oriented reform at the end of 1978. During the reform period, China has had real average GDP growth of over 9% a year. This impressive rate of growth suggests that incomes in China double approximately every eight years. Not surprisingly, given this, China has become the world’s fourth largest

Linda Yueh is fellow in economics at Pembroke College, University of Oxford and co-author of Globalisation and Economic Growth in China (World Scientifi c Publishing)

economy (in terms of aggregate size, without adjustment for purchasing power parity). The world’s most populous nation, with over 1.3 billion people, is now also one of its most signifi cant economies. However, despite achieving this rapid ascendancy in size, per capita GDP in China only recently passed the $1,000 level which describes the world’s poorest economies. Last year, GDP per capita rose to $1,700, but compared with economies such as the UK, France, and other OECD countries which it outranks in aggregate size, China’s average expected standard of living is only a fraction of that of these countries. International comparisons, though, should be used sparingly in this context. I raise it only to highlight the potential for economic growth that is still inherent in China, given its low level of per capita income in a massive $2.23 trillion economy. By comparison, the other large emerging economy with over one billion people is India, which has yet to become a $1 trillion economy and whose per capita GDP is signifi cantly less than that of China. A notable feature of China’s economic growth during these past 27 years is its remarkable track record of poverty reduction. Since