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Progress in China’s Human Rights in 2013

Information Office of the State Council, The People’s Republic of China


May 2014, Beijing

Poverty reduction in rural areas is making steady headway. In 2013 the


State Council issued Opinions on Promoting Rural Poverty Alleviation though
Innovation Mechanisms. The central government appropriated 39.4 billion
yuan on poverty reduction, an increase of 6.2 billion yuan over the previous
year. In 2013 some 16.5 million rural residents got rid of poverty. The per
capita net income for rural residents in the counties which are key targets of
the government’s poverty-reduction work reached 5,389 yuan, an increase of
787 yuan over 2012, or up 13.8 percent in real terms, a growth rate higher
than that of the average level in China.

Employment is expanding through various channels. Despite great
employment pressure, China adheres to the employment priority strategy, taking
stable growth and ensuring employment as the threshold of a proper economic
range, and creating more and better-quality jobs on the basis of development.
China attaches great importance to the development of labor-intensive industries,
small and medium-sized enterprises (SMEs), private enterprises and service
industries that can create more jobs. In 2013 some 13.1 million urban jobs were
created, an increase of 440,000 over 2012, and the registered urban unemployment
rate stayed at 4.1 percent, which was relatively low. The government also provided
skills training. As many as 20.49 million people participated in vocational training
with government subsidies in 2013, among whom 12.275 million participated in
employment skills training, 2.082 million attended entrepreneurship training, 5.487
million took part in job skills upgrading training and 646,000 received other types
of training. The number of laid-off workers receiving training reached 3.98
million. China endeavors to facilitate the transfer to non-agricultural jobs of rural
people, organized more than 20,000 special job fairs for migrant workers in 2013,
and trained 9.384 million farmers. The government attaches ever-more importance
to the employment of young people, especially college graduates. Through
employment guidance services, campus recruitment activities, the “Employment
Promotion Plan for Unemployed College Graduates” and other measures, China
encourages college graduates to find jobs and start businesses in various forms and
through various channels.
….
The basic rights of workers are guaranteed. In 2013 a total of 27
provinces (autonomous regions, municipalities directly under the central
government) raised their minimum wage standards, averaging a 17 percent
annual hike. The average monthly income of rural workers employed away
from their homes was 2,609 yuan, an increase of 319 yuan over 2012.
Community-level trade unions and organizations for safeguarding workers’ rights
continue to maintain a relatively rapid pace of development. By the end of 2013
the formation rate of labor dispute mediation organizations in townships and
subdistricts had reached 60 percent, an increase of 10 percent year on year; the
formation rate of labor dispute arbitration committees had reached 91.6 percent;
and the rate of labor dispute arbitration courts nationwide was 72.7 percent, up 20
percent year on year. The number of community-level trade unions increased to
2.77 million, up 4 percent over 2012; a total of 1.298 million effective collective
contracts were signed throughout the country, involving 3.64 million enterprises
and 160 million employees, up 6 percent, 18 percent and 9 percent over 2012,
respectively. Assistance to impoverished workers was strengthened, benefiting
7.739 million people in 2013.
….
(China has established and improved its medical insurance system to
protect both rural and urban residents’ right to medical treatment. So far,
China has established a basic national medical insurance system, and kept raising
its standard. More than 1.3 billion people, or over 90 percent of the total population
have participated in medical insurance for non-working urban workers, basic
medical insurance for urban residents or the new rural cooperative medical care
system. By the end of 2013 some 299.06 million people had participated in the
basic medical insurance for non-working urban residents. Government subsidies
for basic medical insurance for non-working urban residents have been rising year
by year-from 40 yuan per person in 2007 to 280 yuan in 2013. The reimbursement
rate for hospitalization expenses covered by relevant policies has been raised to
around 70 percent, and the maximum payment has been raised to six times local
residents’ per capita disposable income. The new rural cooperative medical care
system has expanded rapidly to cover the entire rural population. By the end of
2013 a total of 802 million people had participated in the new rural cooperative
medical care system, compared with 730 million in 2007, with its coverage rate
rising from 85.7 percent to 99 percent. Government subsidies for the new rural
cooperative medical care system and per capita funding have grown year by year.
In 2013 per capita financing for the new rural cooperative medical care increased
to about 340 yuan, of which 280 yuan was subsidies from government at various
levels; the reimbursement rate for hospitalization expenses covered by relevant
policies has stayed at 75 percent, and the maximum payment and the
reimbursement rate for outpatient expenses have been further increased. In the
same year the new rural cooperative medical care system benefited a total of 1.32
billion people, up 14.9 percent year on year, and 1.37 million patients benefited
from serious illness insurance under the new rural cooperative medical care
system, with a reimbursement rate of 70 percent.)

“China's formula to reduce poverty could help developing nations” South China
Morning Post, 29 March, 2013,
http://www.scmp.com/news/china/article/1202142/chinas-formula-reduce-poverty-
could-help-developing-nations
Brett Rierson, China representative for the World Food Programme says the nation
offers a model for developing countries. "China invested in agriculture to reduce
poverty and successful agricultural projects were built up from the grass roots.
These were not top-down solutions," he said.

“New Progress in Development-oriented Poverty Reduction Program for Rural


China”, china.org.cn
Information Office of the State Council of the People's Republic of China
November 16,2011
http://www.china.org.cn/government/whitepaper/2011-
11/16/content_23930587.htm

http://www.china.org.cn/government/whitepaper/node_7142125.htm

The Chinese government aims its poverty reduction programs at all people
whose income is below the poverty line, while putting emphasis on the old
revolutionary bases in the central and western regions, areas inhabited by
ethnic minorities, border areas and destitute areas. It includes 592 counties
in these areas in the key programs of the nation' s poverty reduction effort.
The central government and local governments at all levels formulate
special programs, appropriate special funds and concentrate resources
to improve infrastructure construction, develop specialty and
competitive industries, improve social services and enhance the
people's quality in these areas. The local governments of other
impoverished counties, townships and villages in the eastern, central and
western regions are mainly responsible for their respective poverty
reduction programs.

Over the past ten years, the central and local governments have been
constantly adjusting their structures of financial expenditure and gradually
increasing the financial input into poverty reduction programs. The
financial input increased from 12.75 billion yuan in 2001 to 34.93 billion
yuan in 2010, with an average annual growth rate of 11.9 percent, and the
accumulative input totaled 204.38 billion yuan in these ten years. For a
breakdown, funds appropriated by the central government for poverty
reduction programs increased from 10.002 billion yuan in 2001 to 22.27
billion yuan in 2010, with an average annual growth of 9.3 percent, and the
accumulative input reached 144.04 billion yuan over these ten years. The
distribution of poverty relief funds reflected the priority principle. The
accumulative financial input to the key counties in the national and
provincial development-oriented poverty reduction programs over these ten
years reached 145.72 billion yuan, accounting for 71.3 percent of the total
input and with the average in-put for each county reaching 136 million
yuan; the central government appropriated a total of 135.62 billion yuan for
poverty reduction in 22 provinces (autonomous regions and municipalities
directly under the central government), including 87.7 billion yuan for 12
provinces (autonomous regions and municipalities directly under the
central government) in the western regions.

Implementing comprehensive development-oriented poverty reduction


in villages. To promote overall economic and social development in
poverty-stricken areas, the state designated 148,000 impoverished
villages nationwide in 2001, and formulated poverty reduction
programs for each and every village covering basic farmland, drinking
water for people and livestock, roads, income of poor villagers, social
undertakings and other areas. The government pooled and allocated
funds for the implementation of the programs on a yearly basis to increase
the income of impoverished people, upgrade infrastructure, develop public
welfare, and improve the production and living standards. By the end of
2010, some 126,000 villages had implemented the programs, and the
villages in old revolutionary bases, areas inhabited by smaller minority
groups and border areas had basically completed the work.

Strengthening training of the labor force. The development of human


resources is an effective means of enhancing development capability. Since
2004, the central government has appropriated a total of three billion yuan
in poverty reduction funds for the "Dew Program," which focuses on
training labor force from poor rural families in technical skills and
practical agricultural techniques so that they can find better-paying
jobs. By the year 2010, more than four million people from poor rural
families had received such training, and 80 percent of them found jobs
outside agriculture. A sample survey revealed that workers who had
received training earned 300-400 yuan per month more than those who
hadn't. The training programs not only helped employment and salary
growth in poor areas, they also provided chances for the workers to get
access to new skills and new concepts, thus broadening their horizons and
enhance their confidence. In 2010, in an attempt to promote employment
the state began to carry out a pilot project that provides direct subsidy for
high-school graduates from poor families to pursue vocational education.

Poverty reduction through education. Over the past decade, the state has
been vigorously developing education, helping large numbers of students
from economically poor rural families acquire necessary skills through
vocational education and find stable employment in cities/towns, thus
shaking off or alleviating poverty in these families. From 2001 to 2010,
some 42.89 million students graduated from secondary vocational
schools, and most of them were from rural families or impoverished
urban families. The state constantly improves the subsidy system for poor
students in compulsory education, senior high school education and higher
education to relieve the financial burden on poor families. The government
also builds schools for immigrants, and encourages immigration for
ecological protection purpose.

Promoting poverty reduction with industrialization. Combining such


programs as comprehensive promotion of poverty reduction in villages,
experimental development of adjacent areas, poverty relief through
science and technology, rendering support to impoverished farmers,
constructing industrial bases, encouraging the use of advanced
equipment and technologies in agricultural production and developing
the rural cooperative economy of scale, China has endeavored to
enhance the efficiency and specialization of industrial development in
poverty-stricken areas. Over the past decade, the state has helped the
poverty-stricken areas develop potato cultivation, economic trees and fruits,
grassland husbandry, cotton planting and other leading industries. Of them,
potato production and processing has become a special and competitive
industry for the poor areas to guarantee food security, ward off droughts
and other natural disasters and get rid of poverty.

Implementing work relief. The work-relief policy was initiated in the


1980s in rural areas to mainly support economic development in
poverty-stricken areas and the construction of small-scale
infrastructure projects in rural areas related to poverty reduction,
including building of roads in counties, townships and villages, works of
farmland irrigation, drinking water projects for the people and livestock,
basic farmland capital construction, grassland construction, comprehensive
improvement of small river basins, etc. From 2001 to 2010, more than 55
billion yuan was earmarked by the central government as work-relief funds,
effectively improving the production and living conditions in poverty-
stricken areas.

Relocating impoverished populations from environmentally unfriendly


areas. The voluntary relocation of impoverished populations from areas
with harsh living conditions and natural resource-poor areas is an important
way to improve their living environment and development conditions. By
2010, the Chinese government had relocated 7.7 million impoverished
people, effectively improving their housing, communications, power
supply and other living conditions. In the process of advancing
industrialization and urbanization, some impoverished areas have combined
such poverty-relief relocation with the construction of county seats, central
towns and industrial parks, converting cultivated land back to forests and
grasslands, migration for ecological purpose, merger of villages and
disaster prevention, in an effort to improve public services for these people
while promoting the employment of impoverished farmers in urban areas
and sectors outside agriculture.
Shaohua Chen and Yan Wang, “China’s Growth and Poverty Reduction:
Trends between 1990 and 1999”, The World Bank

https://play.google.com/books/reader?printsec=frontcover&output=reader&
id=xyclPRaysyYC&pg=GBS.PA4

(on page 4)

Third, poverty reduction was more significant in the period from 1993-96,
especially for rural poverty. The most important causes of this
significant reduction is that the Chinese government increased the
purchasing price of agriculture products by 75% especially grain. The
official purchasing prices of grain has been doubled during 1993 to 1996.
From another study (The World Bank 1997) we know that the share of
grain income decline from the poor to rich so the increase of grain price has
benefited the poor and near poor (around 0.75 to 1 dollar per day poverty
lines) and the middle income group most.
Xiaxin Wang, “The Effect of China’s Agricultural Tax Abolition on Rural
Families’ Income and Production”, China Center for Economic Research, National
School of Development, Peking University
http://cerdi.org/uploads/sfCmsContent/html/367/Wang_Xiaxin.pdf

(China had long been an agricultural nation in the history, and agricultural
tax had contributed a lot to the government’s fiscal budget in the past.
When the People’s Republic of China was found in 1949, the
agricultural tax accounted for 40% of China’s fiscal income. But with
China’s economy growing rapidly in recent years, China has gradually
become an industrial country. The contribution of agricultural tax to
the government’s fiscal revenue dropped to 2.6% in 2002. In the
meantime, China faced a large and increasing divergence in urban and rural
families’ living levels. In 2002, the per capita net income in a
representative urban family is 7702.8 Yuan, while in a rural family the
number is only 2475.6 Yuan.2 Thus, to increase rural families’ wellbeing,
the government initiated the rural tax and fee reform in 2000.)

The first stage of the reform is from 2000 to 2003, which is also called
the tax-for-fee reform because its main content is to eliminate all the
fees in rural China, leaving agricultural tax the only tax and fee anyone
undertaking the agricultural work should pay. The second stage is
from 2004 to 2005, with the end of abolishing the agricultural tax. In
2003, the government announced that the agricultural tax would be
abolished within 5 years. In fact, it was abolished in 3 years. Since
January 1st, 2006, the 2600 year-old agricultural tax has been terminated in
this country. This paper investigates the effect of the second stage of the
reform on rural families’ income and production.

Table 13 shows that the tax abolition significantly increased per capita
net incomes. In addition, the per capita pre-tax net income also increased
in response to the tax abolition, which suggests that the tax abolition may
have stimulating effects on rural production. From the result in the second
column, it can be seen that during 2003-2005 one percentage point decrease
of the agricultural tax rate increased per capita net income by 2.5%. Since
in 2003 the average tax rate is 3.2%, the tax abolition increased per capita
net income by 8% (2.5%*3.2). In 2003, per capita net income was 3738
yuan, thus the tax abolition increased per capita net income by 299
(3738*8%) yuan. Note that in 2003, the agricultural tax per paid by each
household with was 181 yuan; on average there were 4 individuals in a
family. So each individual paid 45 yuan agricultural tax. Therefore, the tax
abolition had quite significant impact on increasing farmers’ actual income.

Regressions with or without other controls both show a same conclusion:


the tax abolition had significantly increased farmers’ capital inputs in
agricultural production. During 2003-2005, tax abolition on average
increased farmers’ capital inputs by 7.68% (0.024*3.2), which is
statistically significant at the 5% significance level.

Table 12 reports the main results. We still focus on the 2003-2005


regression. It can be seen that the land area did not have significant
contribution to the agricultural income while capital and labor had effects
statistically significant at the 1% significance level. One percentage point
increase in fixed productive capital would increase the agricultural income
by 0.154 percentage point; one percentage point increase in agricultural
laboring days would increase agricultural income by 0.538 percentage
point. The coefficients of the interaction terms suggest that the tax
abolition had insignificant effects on the productivity of land and
capital, but had significantly increased labor productivity. One
percentage point decrease of the tax rate would increase the labor-income
elasticity by 0.009, which means the tax abolition would increase the
elasticity by 0.0288 (0.009*3.2), i.e., with one percentage point increase of
labor inputs, the agricultural income would increase another 0.0288
percentage point due to the tax abolition. To sum up, our empirical
research finds that the tax abolition increased agricultural income
mainly by increasing capital inputs and increasing labor productivity
rather than by affecting the labor inputs or the productive efficiency of
land or capital.

The contribution of this paper has two aspects. On the theoretical part, our
paper emphasizes the important effect of government policy on household
behaviors potentially by affecting their expectations. The gradual
decrease in agricultural tax rate worked to strengthen farmers’
expectation of or belief in government’s support on agriculture, which
led them put more resources in agricultural production. Although the
agricultural tax is a lump-sum tax, its abolition could have effects on
household behaviors in that the abolition pace exceeded people’s
expectation.

On the empirical part, this paper, based on a nation-wide rural household


survey, investigates the actual effect of the abolition of agricultural tax, an
event with significant historical meaning. We find that the tax abolition
increased agricultural operating income by increasing rural
households’ capital inputs and labor productivity. Before the tax
abolition, each household on average paid 181 yuan agricultural tax. The
tax abolition increased the agricultural income by 7.04%, that is, 425
yuan. The tax abolition had significant effects on stimulating
agricultural income.

China’s Land Reforms

A third land reform beginning in the late 1970s re-introduced the family-
based contract system known as the Household Responsibility System,
(From Wikipedia)

China Questions And Answers


http://www.china.org.cn/english/features/Q&A/160352.htm

The household contract responsibility system contains two features. First,


farmland is still owned by the public. Second, production and management
are entrusted to individual farming households through long-term contracts.
During the contract period, the farmers pay taxes to the State and collective
reserves to local governments, and keep all the other produce for
themselves.

The system was so warmly accepted by farmers that by the end of 1983 it
had incorporated more than 90 percent of the country's farming households.
The system not only released rural productive forces but also turned out to
be the breakthrough of the rural reforms.

Firstly, the system greatly inspired farmers' production initiative,


sharply increased agricultural output, and raised rural productivity.
Secondly, large amount of rural labor force was released from land cultivation and
entered village-run factories and township enterprises, which have evolved into an
important sector in the rural economy.

Thirdly, the system transformed production mode in rural areas and changed
farmers' lifestyle. It helped elevate farmers from self-sufficient petty producers to
commodity producers and managers, while promoting the development of rural
market.

Finally, with rapid development of the rural economy, farmers' living


standards have been improved markedly. Many of them are now living a
relatively well-off life.

Since the household contract responsibility system was implemented more than
two decades ago, China's agricultural production has bee increasing at an average
annual rate of 6.7 percent, well beyond the world average. The annual growth rate
grain production is 2.7 percent, with total grain output exceeding 500 billion
kilograms in 1996, making China the largest grain producer in the world

(From Wikipedia)
Since 1983, China has launched a series of land policy reforms to improve
land-use efficiency, to rationalize land allocation, to enhance land
management, and to coordinate urban and rural development. These land
policy reforms have yielded positive impacts on urban land use as well as negative
socioeconomic consequences. On the positive side, they have contributed to
emerging land markets, increased government revenue for the financing of massive
infrastructure projects and provision of public goods, and improved the
rationalization of land use. On the negative side, problems such as loss of social
equity, socioeconomic conflicts, and government corruption have emerged

“Reducing Poverty Through Land Reform”, International Fund for Agricultural


Development
http://www.ifad.org/media/pack/land.htm
Millions of poor rural people depend on farming for their livelihood, but they control
very little land. They may have no legal rights to the land they farm, or they may work
as hired labour on large farms. Low incomes and rural poverty are often the result.

Redistributing land to small-scale farmers can do much to reduce their poverty.


When rural families have land, and secure control over that land, they are likely to
grow more food and see their incomes rise. Land security can mean food security.

Dividing large farms into smaller units often means that more food is produced per
hectare. This is happening in a number of countries. In El Salvador, for example, a 10%
rise in land ownership has boosted income by 4% per person. In India, the states where
poverty has fallen the fastest are those that have implemented land reforms. Ethiopia has
transformed a feudal land system into family farming.

Most strikingly, in China, the shift from large farms to smallholdings (in the period
1977 - 1985) witnessed a unprecedented increase in farm output, thus enabling
millions of people to rise out of poverty.

Land reform can increase both employment and income. Small farms employ more
people per hectare than the larger units, often to the benefit of the landless and
unemployed. And owning land means that family farmers often secure the bank credit
that was previously denied them.

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