Jobs, Homes and Cows: China’s Costly Engine to End Extreme Poverty

Jiyuan Village, China – When the Chinese government offered free cows to farmers in Jiyuan, villagers in the remote mountain community were skeptical. They were concerned that officials would ask them to return the cattle at a later time, along with any calves they managed to raise.

But the farmers kept the cows and the money they brought in. Others received small flocks of sheep. Government workers paved a road to the town, built new homes for the poorest residents of the village and converted an old school into a community center.

Jia Huanwen, a 58-year-old farmer in a village in Gansu Province, was given a big cow three years ago that produced two healthy calves. He sold the cow in April for $ 2,900, which he earns in two years growing potatoes, wheat and corn on the nearby yellow-tiered clay hillsides. Now he regularly buys vegetables for his family’s table and arthritis knee medication.

“It was my best cow ever,” said Mr. Jia.

Jiyuan Village is one of many successes for President Xi Jinping in his ambitious pledge to eradicate extreme rural poverty by the end of 2020. In just five years, China says it has eliminated extreme poverty more than 50 million farmers behind them rapid economic growth in Country. Cities.

But the village, one of six in Gansu that the New York Times visited without government oversight, is also testament to the enormous cost of the ruling Communist Party’s approach to poverty alleviation. This approach has relied on massive, and potentially unsustainable, subsidies to create jobs and build better housing.

Local cadres spread out to identify poor families – who are defined as living on less than $ 1.70 a day. They provided loans, grants and even farm animals to the poor villagers. Officials visited residents weekly to check on their progress.

“We are completely confident of China’s success in eradicating extreme poverty in rural areas – given the resources mobilized, we are not sure they are sustainable or cost-effective,” said Martin Reiser, the World Bank’s country director for China.

Beijing has pumped nearly $ 700 billion in loans and grants into poverty alleviation over the past five years – about 1 percent of economic output each year. The exception is large donations from state-owned companies like State Grid, a power transmission giant, which has put $ 120 billion into modernizing rural electricity and dedicated more than 7,000 employees to work on poverty alleviation projects.

The campaign has gained new urgency this year as the country faces devastation from the coronavirus pandemic and severe floods. The provinces announced one by one that they had achieved their goals. In early December, Mr. Xi announced that China had “scored an important victory that impressed the world.”

But Mr. Xi acknowledged the need for more efforts to share the wealth more widely. A migrant worker in a coastal factory can earn in a month as much as a Gansu farmer in a year.

Mr. Xi also called on officials to ensure that new jobs and aid for the poor would not disappear in the coming years.

Gansu, the poorest province in China, declared in late November that it had lifted its last province out of poverty. Just a decade ago, poverty was rife in the county.

Hu Jintao, the leader of China before Mr. Xi, visited people who lived in simple homes with few furnishings. Villagers ate so many potatoes that local officials were embarrassed when a little girl initially refused to eat another one with Mr. Ho in front of TV cameras because she was tired of it, according to a cable revealed by WikiLeaks.

Although many villages can still only be reached by single-lane roads, they are lined with street lamps powered by solar panels. New industrial-scale pig farms, plant nurseries, and small factories sprang up, creating jobs. Workers are building new homes for farmers.

Three years ago, Zhang Jinluo awoke from horror when the walls of his home that had been weakened by rain retracted. Half of the timber for the roof was shattered by sheets of dirt, causing the loss of him and his mother.

Officials in Youfang Village built a spacious new concrete house for them, with new furniture. Mr. Zhang, 69, now receives a monthly stipend of $ 82 through the Poverty Program. His original home was rebuilt as a store.

“This house was dilapidated, and it leaked when it rained,” said Mr. Zhang.

The government helps private factories buy equipment and pay salaries if they hire workers who are considered poor.

In Tanyue Tongwei Clothing & Accessories Company in southeast Gansu, about 170 workers, most of them women, sew school uniforms, T-shirts, jackets, and face masks. Workers said that dozens of employees received additional payments from the poverty alleviation program in addition to their salaries.

Lu Yaming, the company’s legal representative, said Tanyi receives at least $ 26,000 annually in benefits from poverty alleviation programs – of which $ 500 is paid annually to each of the 17 villagers who are considered poor.

But the feasibility of these plants without constant assistance is far from clear. Until the subsidies arrived, Mr Luo said, the factory often had trouble paying wages on time.

Inevitable questions revolve around whether some families have used personal connections with local officials to qualify for the grants. According to official statistics, corruption investigators punished 99,000 people across the country in connection with poverty relief efforts last year. In local restaurants in communities like Mayingzhen, where a large platter of fried donkey costs $ 7, the talk is about who got what, and whether it should really qualify.

While the poverty alleviation program has helped millions of poor, critics point to the campaign’s strict definitions. The program helps people categorized as extremely poor at some point from 2014 to 2016, without adding others who may have faced tough times since. It also does little to help the poor in the big cities where wages are higher but workers must pay much more for food and rent.

According to the government’s complex criteria for determining eligibility for assistance, anyone who owned a car, had assets over $ 4,600, or had a new or recently rebuilt home was disqualified. People who hover above the government’s poverty line still struggle to make ends meet, but are often denied help with housing or other benefits.

Zhang Sumi, a 53-year-old farmer, earns $ 1,500 a year growing and selling potatoes, and has had to use her savings to build her house out of concrete. She says she should have been qualified to help the extreme poor. Growing the soil of Gansu, known for its sterility, is difficult and difficult.

“In this society, poor families are identified by the cadres, and we have nothing,” she said bitterly.

The party’s campaign approach has also failed to address deep-rooted problems that disproportionately harm the poor, including the cost of health care and other large holes in the emerging social safety net in China. Villages provide limited health insurance – only 17 percent of the cost of Mr Jia’s arthritis medication is covered, for example. Exorbitant medical bills can devastate families.

Yang Xiaoling, a 48-year-old worker who works at another government-backed factory in Gansu, cries uncontrollably as she describes the complicated debt she faced after paying medical fees to her husband, who suffered kidney failure.

Three years ago, I borrowed $ 7,700 interest-free from a poverty alleviation program bank and the money was supposed to be invested in buying livestock. Instead, she borrowed more money from relatives and then spent all of that money on a kidney transplant and medicine for her husband.

Now the entire loan is due and she has no cash to pay it off. Following up on her husband’s medical treatment, she consumes her entire salary. Therefore, the couple, their three children, and the invalid parents of their husband survive on monthly government poverty assistance payments of less than $ 50 per person.

“I don’t have the power to pay it off. I can’t help you,” Ms. Yang cried. “I’ve already borrowed a lot of money, and now nobody is lending me money.”

Despite the challenges, the poverty alleviation program may have a long-term political benefit that helps ensure the survival of a portion of it. Gratitude for the program appears to reinforce the party’s political strength in rural areas.

In Youfang, Mr. Zhang was quick to praise not only the poverty program but also Mr. Xi, comparing him to Mao.

He said, “It is a good thing for the country to have Xi Jinping, and the national policy is good.”

Chris Buckley contributed reporting from Sydney. Liu Yi, Amber Wang, and Coral Yang contributed to the research.