3. 1978-2012: Reform and Opening up and Development-Oriented Poverty Reduction

In 1978, China adopted the policy of reform and opening up, and the fight against poverty entered an important stage of exploration and innovation. During this historical period, China's reform and opening up continuously advanced. With rapid, sustained and stable economic development, the number of people in poverty decreased drastically. The historical process of poverty reduction and the evolution of adopted policies offer a true glimpse of China's reform and social and economic development. From the perspective of evolution, China's strategy of fighting against poverty during this period fell into four categories.

a. 1978 – 1985: Reducing Poverty through Reform of the Rural System

This is an important period in the history of China's reform and opening up, when China's targeted poverty reduction measures were the most effective. Firstly, the focus of the Party was shifted to economic development, and the trial runs of the rural household contract responsibility system were widely initiated. Secondly, the central government greatly increased the purchase price of agricultural products and changed the long-term "price scissors" policy for industrial and agricultural products, a move that greatly increased farmers' income. Thirdly, through a series of market-oriented institutional reforms like agricultural products trading, the government abandoned its policy of complete restriction and instead encouraged rural laborers to work and do business in cities, thus raising the overall income level of rural areas and advancing poverty alleviation in villages. Finally, in September 1984, the CPC Central Committee and the State Council issued the "Notice on Helping Poor Areas Change Their Landscapes" and for the first time incorporated poverty alleviation into the national policy, attaching special importance to poverty reduction at the national policy level.

With efforts made at this stage, China achieved remarkable results in poverty alleviation. Between 1978 and 1985, the per capita income and consumption of rural households increased by RMB264 and RMB192 respectively. The raised capacity of rural production directly improved the lives of the impoverished population, and greatly reduced the number of poor people in villages. Statistics show that based on the Chinese government's poverty standards, the number of rural poor fell from 250 million in 1978 to 125 million in 1985, which means half of the poor were raised out of poverty during the period, with the incidence of poverty dropping from 33.7% to 14.8% - an obvious and drastic decrease in the number of rural poor.

b. 1986 – 1993: Establishing a New Model of Poverty Reduction in Impoverished Counties through Comprehensive Reform

From 1978 onwards, rural reform achieved remarkable results, greatly alleviating poverty. However, after successive years of bumper harvest, agricultural production began to decline in 1986, and the agricultural product purchase and sales system thus required reform. Moreover, the previous universal distribution of poverty began to be stratified, divided, and differentiated, and uneven development between regions started to emerge.

In response to the problems and challenges appearing under the new situation, China began to dramatically adjust its development-oriented poverty alleviation policies. On the one hand, on May 16, 1986, the nation formed the State Council Leading Group for Economic Development in Impoverished Areas (changed to the State Council Leading Group Office of Poverty Alleviation and Development in 1993), the first of its kind in China to advance large-scale, planned and organized development-oriented poverty alleviation. On the other hand, the state identified the targets and priorities of poverty alleviation – poverty-stricken counties. In 1986, the nation determined 331 targeted impoverished counties according to the degree of poverty; in 1987, the nation identified 592 national-level poverty-stricken counties in 18 contiguous poverty-stricken areas.

Through development-oriented poverty alleviation during this period, the number of rural poor decreased from 125 million to 70 million, with an average annual reduction of more than 6 million. The proportion of poor people in rural areas also fell from 14.8% to 7.7%, a drop of nearly half. The per capita net income of farmers in targeted national-level impoverished counties increased from RMB206 to RMB484.

c. 1994 – 2000: Innovative Poverty Alleviation Policies under Unbalanced Circumstances

In March 1994, the State Council formulated and issued "The Seven-Year Program for Lifting 80 Million People out of Poverty," which clearly stated that it would take 7 years (from 1994 to 2000) to help 80 million people living below the subsistence level in rural areas. It was the first action program for development-oriented poverty reduction with clear and definite objectives, targets, measures and a time limit.

The abovementioned program reduced poverty in rural China. As of 2000, the number of rural poor living in extreme poverty under the Chinese government's poverty standards fell to 32.09 million, with the incidence of poverty down to 3.4%. During the same period, the incidence of poverty in targeted poverty alleviation counties rapidly dropped to 8.9%. The administrative villages in impoverished areas that had electricity, roads, postal services, and telephone access reached 5.5%, 89%, 69% and 67.7%, respectively, and therefore local production and living conditions had been greatly improved.

d. 2001 – 2012: Whole-village Development-oriented Poverty Alleviation

After the turn of the 21 ^st century, particularly from 2003 onward, China's economy entered a new round of growth cycle. In response to the new characteristics of China's poverty in the new century and following the completion of the Seven-Year Program for Lifting 80 Million People out of Poverty, China issued the Outline for Development-Oriented Poverty Alleviation for Rural China (2001-2010) in 2001, the first guiding poverty eradication project in the new century.

At this stage, China's development-oriented poverty eradication policies and actions underwent a series of changes. Firstly, all nationallevel poverty-stricken counties were eliminated in coastal advanced areas and national-level poverty-stricken counties in central and western China were added accordingly. Secondly, major adjustments were made to the focus and targets of poverty alleviation efforts, that is, key counties for national development-oriented poverty alleviation work were concentrated in the central and western regions. Poverty alleviation efforts were aimed at determining 592 key counties for national development-oriented poverty alleviation work, 150,000 villages of which were selected as the targets of poverty alleviation. Thirdly, the village-based, whole-village development-oriented poverty alleviation was implemented, with more attention to the roles of science, technology, education, and medicine and health care in development-oriented poverty eradication. Fourth, the Dewdrop Project promoting poverty alleviation through industrial development and vocational training was implemented, the capacity of sustainable poverty alleviation was strengthened, the policy of relocating people whose land required ecological protection and didn't provide subsistence to help them escape from poverty was carried out, and poverty alleviation funding methods like the small-loan guarantee program appeared and eventually played an important role. Fifth, regional strategies such as developing the western region, revitalizing the old industrial bases in northeast China, and making the central region rise were actively implemented to establish a series of social security systems in rural areas. Sixth, with poverty-stricken villages as the unit, multi-sectoral funds and resources were pooled to unite and advance development projects for villages such as helping farmers build their houses, land consolidation, homestead reorganization and reclamation, infrastructure support, land transfer, and agricultural industrialization.

In 2011, China raised its poverty line to RMB2,300 per capita (at 2010 prices), 92% higher than RMB1, 274 in 2010. By the new poverty line, the number of poor people in China increased to 165 million (at the end of 2010). Meanwhile, the central and local governments at all levels continuously increased investments in poverty alleviation and advanced development-oriented poverty alleviation. According to statistics, by the end of 2012, the proportion of 592 key counties for national development-oriented poverty alleviation work that had roads, electricity, and telephone access respectively reached 92.8%, 98.8%, and 93.2%, a rise of 4.7, 0.8, and 0.3 percentage points over 2010. In key counties for national development-oriented poverty alleviation work, the schooling rate of school-age children aged 7 to 15 reached 97%, and the illiteracy rate of young and middle-aged adults stood at 8.9%, which was 1.4 percentage points lower than that of 2010; moreover, 98% of farmers were covered by the new-type rural cooperative medical care; and the per capita housing area of farmers reached 27.8 square meters, an increase of 2.9 square meters. China's development-oriented poverty alleviation began to shift from a stage of providing subsistence to a new stage of consolidating results, accelerating poverty alleviation, improving the ecological environment, increasing development capacity, and narrowing the development gap.