50 years after US President LBJ, China also declares war on poverty

50 years ago in the USA, President Lyndon B. Johnson declared a war on poverty in his State of the Union address on January 8, 1964. This legislation was proposed by Johnson in response to a national poverty rate of around nineteen percent. The speech led the United States Congress to pass the Economic Opportunity Act, which established the Office of Economic Opportunity (OEO) to administer the local application of federal funds targeted against poverty. As a part of the Great Society, Johnson believed in expanding the government’s role in education and health care as poverty reduction strategies. These policies can also be seen as a continuation of Franklin D. Roosevelt’s New Deal, which ran from 1933 to 1935, and the Four Freedoms of 1941. The popularity of a war on poverty waned after the 1960s. Deregulation, growing criticism of the welfare state, and an ideological shift to reducing federal aid to impoverished people in the 1980s and 1990s culminated in the Personal Responsibility and Work Opportunity Act of 1996.

In China, Chinese Premier Li Keqiang has vowed to fight a “war against poverty,” highlighting the existing imbalances in China’s economic growth. As China’s overall GDP draws ever closer to surpassing the United States’ for the position of world’s largest, more and more commentators have taken to pointing out China’s relatively low per-capita GDP. According to the World Bank’s data, in 2012 China’s per capita GDP was $6,091, lagging behind not only the United States ($51,749) but countries such as Iraq ($6,455), Azerbaijan ($7,164), Botswana ($7,238), and Columbia ($7,748). It’s a testimony to the simple fact that, while China’s overall economy is massive, it must provide for 1.36 billion people.

A 2012 survey done by Peking University showed, for example, that average family income for urban residents was $2,600 a year versus only $1,600 a year for rural resident. In 2010, China Daily reported that China’s urban-to-rural income ratio was 3.33:1, the highest level since 1978.

As a result, China’s per capita GDP doesn’t adequately capture the extent of the poverty problem. World Bank notes that China has about 128 million people living below the national poverty line (which equates to about $1.8 a day) — making China second only to India in terms of the largest population of the poor.

China’s own official estimates are lower, but only slightly so, with Xinhua reporting 98.99 million rural poor alone in 2012. To put that in context, if we go by the World Bank estimate, China’s impoverished population is greater than the total population of all but nine countries in the world (Japan, ranked #10 in total population, has just over 127 million people)

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