China's poverty cut off too low: expert

By Lian Zi in San Francisco | China Daily USA | Updated: 2014-09-09 10:51

China may have more poor people than it realizes.

Taking into consideration the economic vulnerability resulting from natural disasters, illness and unemployment, about 30 percent of the Chinese are under the poverty line, said Wei Shangjin, chief economist of the Asian Development Bank.

He suggested China's government focus more on promoting social insurance programs to reduce the risk among the group.

Wei unveiled the main findings of a report on Monday at Stanford University.

Rapid economic growth, reform and an opening up policy have led to a dramatic improvement in living standards in China, the report found.

"China's achievement in poverty alleviation is the largest in the world," said Wei.

But, the study shows that the traditional $1.25 per day measurement for poverty does not fully capture the extent of extreme poverty in Asia, Wei explained. The "poverty level is defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter", he said.

"Three additional elements should be considered in the poverty picture: the cost of consumption specific to the poor in Asia; food costs that rise faster than the general price level; and vulnerability to illness, natural disasters, climate change, economic crisis and other shocks," said Wei.

He told China Daily that the poverty threshold in China should be increased to $2 per day due to the vulnerabilities the poor are exposed to.

A vulnerability-adjusted poverty line adds more points to China's poverty rate, which rises to about 30 percent of the population.

Wei urged the Chinese government to foster the development of social insurance and subsistence security systems that are accessible to the poor.

zilian@chinadailyusa.com

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