Introduction

This chapter uses the household-level data to estimate trends in poverty in rural and urban China during 1995–2002 and to compare China's performance in poverty reduction during this period with that in the period prior to 1995, specifically between 1988 and 1995. These time periods are determined by the dates of the three household surveys – respectively for 1988, 1995, and 2002 – that provide the data on which the estimates are based. The two periods have been assigned the designations of the “pre–Asian crisis period” and the “post–Asian crisis period.” The Asian crisis hit a number of East Asian countries in 1997, two years after the date of the intermediate survey that separates the two time periods. The logic of the designation is that China's poverty reduction outcome in the second period is largely the consequence of economic performance and policies that took place in the period after the beginning of the Asian crisis, which was also a period of decline in the growth of the world economy. As the chapter will argue, some of the economic policies initiated in response to the crisis had important effects on China's poverty outcome in the second period.

China's Poverty Performance as Measured by Official Data

China's performance in poverty reduction during the 1990s has been recognized for both its solid achievements and remaining shortcomings.