Consolidating Poverty Eradication Gains for Common Prosperity

The 2022 government work report delivered at the annual session of the National People’s Congress, China’s top legislature, reviewed the country’s achievements in poverty eradication and underlined the importance of striving for common prosperity to fulfill the people’s aspirations for a better life.

Earlier in February 2021, China announced victory over extreme poverty. Addressing the National Poverty Alleviation Summary and Commendation Conference, Chinese President Xi Jinping declared that China had secured a comprehensive victory in the fight against poverty and completed the arduous task of eradicating extreme poverty. The historical background and dynamics of achieving the goal of poverty eradication were explained in the white paper “Poverty Alleviation: China’s Experience and Contribution” released in April 2021, which also outlined the future development path concretized in the 14th Five-year Plan (2021-2025).

This historic achievement can be called the “Chinese miracle,” but the Chinese goal of building a great modern socialist country has yet to be realized. China understands that poor people “being lifted out of poverty is not the end but a starting point for a new life and new pursuits.” Thus, subsequent measures to help people stay out of poverty are equally important. The “Two Assurances” (adequate food and clothing) and “Three Guarantees” (access to compulsory education, basic medical services and safe housing) have been realized as part of China’s first Centenary Goal of completing the building of a moderately prosperous society, which has laid a foundation for future development. During the phase of reaching the second Centenary Goal of building a great modern socialist country by the middle of the 21st century, urban-rural and regional disparities must be overcome.

How exactly did China achieve a miracle like overcoming extreme poverty? For starters, poverty alleviation has been the core development policy since the founding of the People’s Republic of China in 1949. There has never been a trade-off in different phases, and only continuity in the people-centered development philosophy in which three aspects are well interconnected—meticulous planning, appropriate policy, and sound strategy. It has ensured the clarity of macro-level directions and adequate coordination of micro-level actions because the ultimate goal has always been realizing “common prosperity.”

For Common Prosperity

China has a legacy and political culture of seeking the development path and governance pattern that lead to common prosperity. Development in many countries has shown that the unbridled neoliberal development model inherently creates various types of disparities and results in extreme wealth and income concentration and the inevitable accompanying social tensions at higher magnitude. These problems are usually addressed with conflict management and order maintenance strategies rather than seeking common good. This is a glaring deficiency of the neoliberal development model.

In stark contrast, after attaining the goal of building a moderately prosperous society in all respects, China is now embarking on the next stage of enhancing shared prosperity among all its people, realizing that the victory over extreme poverty can only be sustained through common prosperity. The benefits of innovation and economic growth must be transferred to the people through fairer and more inclusive development.

Hence, Chinese authorities have unequivocally stressed the necessity of “regulating excessively high incomes” in order to ensure “common prosperity for all,” and that such a philosophy does not run counter to free markets or private enterprises. It is not synonymous with egalitarianism or a welfare state. The capital market and cultural market must operate in tandem with the principles of common prosperity which requires checks on monopoly power to nudge the balance of prosperity in favor of the people. Such measures expand equality of opportunity to prevent class entrenchment and maintain vitality in society.

Scholars and researchers around the world have identified various components of poverty but poverty conditions are usually more complex than their components. China clearly chalked out the coordinated roles of politico-administrative leadership, state-owned enterprises, private enterprises, and local people to organize collective efforts to eradicate poverty in all forms. Poverty eradication is not merely wealth creation. It must involve commensurate commitments, policies, and strategies.

China has successfully achieved interconnected policy, strategy, and system while maintaining “common prosperity” with a people-centered perspective. The idea of “common prosperity” can function as a bridge above the interconnected pillars of poverty eradication and a moderately prosperous society, consolidating efforts to build a great modern socialist country for common good. As the essential requirement of socialism, it has consistently been a significant feature of China’s development path.

Inspiration for Developing Countries

UN Secretary General Antonio Guterres applauded China’s achievement in eradicating poverty, declaring that “the extraordinary result is a reason for hope and inspiration to the entire community of nations.” China has realized the first and foremost Sustainable Development Goals well ahead of schedule, which has boosted confidence in other countries’ abilities to overcome extreme poverty.

The political elites in some countries have been preoccupied with crisis management and order maintenance instead of sustained poverty eradication as a component of human dignity and delivery of justice. They use poverty alleviation rhetoric as a utilitarian tool in the populist electoral democracy process without any sustained commitment or political will, so achievements are ultimately limited.

China has exhibited adequate understanding of continuity in policy, concerted thinking and consistent effort to overcome extreme poverty. Other developing countries in Asia, Africa, and Latin America can learn much from China’s experience.

Countries should focus on “policy coherence” in the long-term process of alleviating poverty and creating common prosperity. Policy coherence stems from “sound planning” with regular consultation at the grassroots level, efficient mobilization of local resources, and appropriate implementation. It requires revitalizing villages to taper the rural-urban divide and ensure non-discrimination in all socio-economic categories. Measures must ensure that poor people  do not fall back in the vicious circle of poverty.

China recognizes poverty alleviation as an inherent component of human rights protection. Extreme poverty blocks people from exercising their human rights, and such rights can only be ensured when income and wealth distribution are broad-based enough to create a middle-income group through fairer distribution of the benefits of  economic development. Enhancing systemic capacity is another lesson other developing countries can learn from China.

Moreover, the time is now for global leadership, national leaders, and poverty researchers to make collective efforts towards creation of a poverty-free world and multilateral frameworks that ensure common prosperity for all through mutual learning. China is willing to help other countries with poverty alleviation through various mechanisms. Recent encouraging multilateral and bilateral arrangements include the China-South Asian Countries Poverty Alleviation and Cooperative Development Center and the China-South Asian Countries E-commerce Cooperation Forum on Poverty Alleviation in Rural Areas, which were announced in a joint statement issued by the foreign ministers of China, Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka in April 2021. China is evolving such mechanisms for international development cooperation and making big contributions to the United Nations Decade for the Eradication of Poverty (2018-2027) to accelerate global action towards a “world without poverty.”

In essence, developing countries must focus on policy coherence, meticulous planning, and systemic capacity and make poverty eradication integral to human rights by striving for common prosperity for all.

The author is former director and emeritus fellow at the South Asia Studies Centre of the University of Rajasthan in Jaipur, India.