China, USA: Comparing Poverty Lines

This post is part of our special coverage Global Development 2011.

China has decided to raise its poverty line to RMB 2,300 yuan (approximately USD 360) per capita annual income; the population below the poverty line will be raised from 26.88 million to 130 million accordingly.

Premier Wen Jiabao has stressed [zh] that the adjustment is to include more people in the country's poverty relief scheme. However, does the new poverty line reflect the reality of China's poor?

Poverty defined by policy

The World Bank has defined extreme poverty as living on less than USD 1.25 a day, and moderate poverty as less than USD 2 a day, since 2008.

A Guizhou family making their living on a landfill site in Jiangsu. Image by Flickr user sheilaz413 (CC: BY-SA).

A Guizhou family making their living on a landfill site in Jiangsu. Image by Flickr user sheilaz413 (CC: BY-SA).

Given China is among the ‘Big Four‘ (BRIC) countries in the developing world, the new poverty line of USD 0.99 a day, is considered far below the international standards.

Yahoo China has prepared a special feature [zh] to address the issue, which rightly points out that the current poverty line drawn by the Chinese government is based on the daily caloric intake per capita. In addition, the line is drawn by the government poverty relief policy rather than being a reflection of people's livelihoods:


The current poverty line is more a decision of the “poverty relief policy”, which means a line among the lowest income social groups where the government can afford to intervene. The poverty line is guided by the government's poverty relief work and the government can make adjustments according to its political needs.


The raising of the poverty line has not only resulted in an increase of the poor population, but also an increase in poverty relief funding. The distribution of the funds comes through the 592 counties, which were defined in 1990 as poor. The decision is hence also a political negotiation between the central government and local governments in public expenditure. Sometimes corruption is involved in the process.

Most of the Chinese netizens find the figure unrealistic and are also skeptical of the government's poverty relief work, as indicated by the following comments on The Wall Street Journal's Weibo discussion thread [zh]:

不学无术的黑籽:贫困标准被随意地玩弄着……2300一年可以干嘛? (今天 13:58)

不学无术的黑籽:The poverty standard is pure manipulation… what can you do with [RMB] 2,300 annual income?


德德的吧:annual income RMB 2,300, which means daily income RMB 6.3 yuan. In Beijing, a bowl of noodles would cost more than that. A beggar would not fall under this poverty line.


岳_宸:On the one hand we have the poor who are starving and can't afford medical care and education; on the other hand, we expect our luxury product market to become the greatest in the world. The income disparity problem is indispensable.


bigwooder:However poor we are, our leaders cannot be poor. This is the advantage of socialism.


ChaoI3:I searched around in Baidu [search engine] and found our that our government's annual expenditure on vehicles was RMB 90 billion in 2008. However, I could not find the exact figure on the three public expenditures [on vehicles, travel and subsistence] on the Internet. My estimation is that it must have reached trillions of yuan in the past 11 years. Such an amount is equal to 40 years of poverty relief expenses. Ha!


NOU小姐的铺子:Are we playing with numbers or are the numbers playing us?

USA/China comparison

Poverty in Guangzhou, China. Image by Flickr user tarotastic (CC BY 2.0).

Poverty in Guangzhou, China. Image by Flickr user tarotastic (CC BY 2.0).

The Chinese poverty line figure becomes more controversial when compared with its United States (US) counterpart. The US poverty line was set at USD 22,314 annual income per household in 2010, which is equal to USD 5,578.5 (RMB 35,579 yuan) annual income per capita – more than 15 times the current poverty line level set by the Chinese government.

While local media outlet, Caijing highlighted [zh] the fact that one third of children in the US is living under the poverty line, Chinese netizens are envious of America's poor:


等待是为了不再等待:The US has been wrongly depicted as poor, while we are wrongly depicted as middle class.


哥又要人身攻击了:My God, my family is poorer than the poor. Our household income is less than half of the poverty line in the US

新远峰:这是新闻呢还是说我们过的比人家幸福吗?猪狗不如的美狗和掌权着看看自己的土地上的贫穷 的人的生活。我们在于他们相比,算是赤贫,活在这个世界算是悲哀

新远峰:This piece of news is telling us that our lives are far happier than the Americans? That the bastard US government has been ignoring the poor? When compared with the US, we are in extreme poverty. How pathetic we are.


三胖子的那点小事:I want to go to the US to become the poor….


月本-无心:According to the US standard, in China if the household annual income is less that RMB 11,000 yuan, one should be regarded as poor. 95% of the [Chinese] nation's population are poor.


呼唤-人性:The US poverty line is set according to 1/3 of the annual per capita GDP level, which is about USD 15,000. While in China, the poverty live had been set at 1/30 of the annual per capita GDP level, which is about RMB 1,500 yuan. Tell me, which country looks more socialist to you?

A number of Weibo users compare China and the US's economic figures to make their points about the poverty line:

小小lo [zh]:中国贫困线的横向比较:1985、2007、2009、2010、2011年贫困线分别为206、1067、1196、1500、2300元,与当年GDP比分别为24%、5.3%、4.7%、5.0%与6.8%(预期);纵向比较,2010年美国贫困线11390美元,与当年GDP比为24%。在中国,想成为贫困人口,还真不容易

小小lo [zh]:Horizontal comparison: the poverty line levels [in China] in 1985, 2007, 2009, 2010 and 2011 were 206, 1,067, 1,196, 1,500, 2,300. The ratios to the GDP per capita were 24%, 5.3%, 4.7%, 5.0% and 6.8% (expected); When compared with the US, in 2010 the poverty line was set at USD 11,390 which is equal to 24% of the GDP per capita. In China, it is very difficult to become a poor person.


老真天真:The poverty line in the US is USD 15 daily per capita income, while in China, it is RMB 6.3 (USD 0.99). The US poverty standard is 15 times higher than the Chinese counterpart. While in term of per capita GDP, the US is 10 times higher than the Chinese counterpart. Let's take a look at the food price. In the US, the price of pork is half that of the Chinese counterpart. Corn and beans are cheaper than China. It is very obvious that the living standard of the poor in China is much much lower than their US counterparts.

This post is part of our special coverage Global Development 2011.


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