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China Estimates 60 Million Living in Poverty - 2004-03-26

China says nearly 60 million of its citizens live in abject poverty. But World Bank surveys estimate the number is much higher. The Asian Development Bank says China could benefit from a better social welfare system.

Since China started opening its economy to the rest of the world a quarter century ago, about 400 million people have been lifted out of poverty.

But China says about 60 million citizens still live in abject poverty - less than $79 a year.

However, surveys carried out by the World Bank, which uses the international standard of living on $1 a day to measure poverty, estimates that China's truly poor number around 200 million.

China rejects this figure, saying it does not account for the subsidized land and housing that many people receive.

Bruce Murray, who heads the Asian Development Bank's mission in Beijing, says the ADB relies on World Bank estimates.

"I think, it's a case where we can say, they're both right," he said. "It depends how you define poverty. The Chinese poverty line is what we call a benefit line, so if your income is below that, you're eligible for direct government subsidies. I don't think the World Bank is saying that there should be 200 million people getting direct subsidies from the government, but in terms of international poverty line, that is probably the [poverty] figure." Mr. Murray suggests that China's estimate reflects only the marginalized poor, such as the rural elderly, orphans and people with disabilities that prevent them from working.

"I would call the Chinese line the hard-core rural poor," said Mr. Murray. "ADB's analysis shows that about 80 percent of those people are either very old and don't have family support. For those people, economic growth probably is not going to do the trick to bring them out of poverty."

Mr. Murray says that China needs a broader welfare system to provide a safety net for marginalized groups.

He says farmers who fall between the Chinese poverty line and international standards of a $1 a day would benefit from lower taxes, better infrastructure and compensation for land taken for redevelopment.

Mr. Murray says China now can afford a more comprehensive welfare system, whereas 10 years ago, it might have struggled under the burden.