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How China lifted 500 million people out of extreme poverty

Source: Skoll World Forum - Tue, 8 Apr 2014 11:09 GMT
Author: Tim Hanstad
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A man collects waste bottles at Tiananmen Square in central Beijing, China, December 4, 2013. REUTERS/Stringer
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Over the past three decades, China has successfully led the greatest poverty alleviation program in the history of the world. During that time, an estimated 500 million Chinese were lifted out of extreme poverty.

This remarkable success was achieved, in part, through the recognition of land rights.

As any good student of Chinese history knows, land rights is the fulcrum upon which modern Chinese history turns.

It was peasants’ desire for rights over the land they farmed that prompted them to join Mao’s revolution. It was Mao’s disastrous collectivization of farmland into huge communes that led to China’s greatest famine. And it was Deng Xiao Ping’s dismantling of the communes and establishment of the household responsibility system that led to China’s first great lurch toward prosperity and stability.

During this time, as the Chinese government loosened its controls over the economy, it also loosened control over society -- allowing for the establishment of a civil society and the growth of a non-profit sector and the birth of modern Chinese social entrepreneurship. The government adopted a policy of “small state, big society,” which for the first time opened up space for NGO development in Communist China.

According to the statistics of the Ministry of Civil Affairs of China, in 1965, there were only 6,100 social organizations in all of China. By the end of 2006, 354,000 NGOs were registered in China, including 192,000 social organizations, 61,000 private non-enterprise entities and 1,144 foundations.

Indeed civil society’s role and the critical function of social entrepreneurs became firmly rooted in the public discourse in 2004 when two bestselling books about social entrepreneurship were translated into Chinese: How to Change the World by David Bornstein and Banker to the Poor by Mohammed Yunus.

What’s more, the message of these books – that there are some things that government does not do best – was supported in 2008 when Western China experienced a severe earthquake and government appeared flatfooted in response.

In this context ordinary Chinese citizens began to consider that there were some social welfare needs that the government was ill-equipped to address.

At the same time, internationally there has been a growing understanding that the Chinese government has never been a monolith. There are always officials within the government who are exceptionally open to outside ideas, especially if they are tested elsewhere and have close relevance to China’s specific circumstances.

This has been the path that Landesa has taken -- not to work around the Central government, but to work closely with them.

In this, we are not unique. The majority of NGOs in China have close relations with the government. This is a function of two unrelated realities: that the government wants to retain some control over NGOs lest they create social unrest (in many cases the government even provides funding for NGOs leading many to dub those organizations the oxymoronic: GONGOs “government organized non-governmental organization”) and at the same time some NGOs are eager to work with the government because of the scaling opportunities such a partnership provides.

Take Landesa’s experience for example. We’ve been working in China since 1987.

Landesa’s recommendations have been incorporated into a series of historic policy and legislative changes over the last three decades that guarantee all farmers 30-year land rights, and buttress these rights in important ways including: legal documentation of farmers’ rights; prohibiting regular "readjustments" of farmers’ land holdings; and more strict limits on expropriations. An estimated 88 million farming families have gained legally secure land tenure.

Our current work with officials in the Ministry of Agriculture and the Ministry of Land Resources  to develop a land registration system to ensure that all farmers, both men and women, have their land rights registered in the country’s first national land documentation system will have similarly outsized impact. Such a system would provide tens of millions of farmers with their first documentation of their land rights and improve land tenure security dramatically while reducing social conflicts. And we know from our years of research that improving land tenure spark investments and improvements in land which boost food security and improve environmental stewardship.

The current leadership in China has firmly committed to the principle of letting the market play the key role in allocating resources in its publicly-released guiding documents.

For example, the Communist Party’s 12th Five Year Plan, according to the 2012 China Social Enterprise Report, “aims to strengthen the construction of social organizations, charity and community social organizations; improve the supporting policies form the government; encourage the government to transfer functions to social organizations as well as “open up” education, medical care, sports, and other areas.”

The same survey asked social entrepreneurs about their relationship with the government and found that 53 percent reported receiving help from government. Only 9.5 percent reported obstacles in government relations.

This is good news, because much work remains to be done. Two years ago, China’s Gini coefficient surpassed the 0.4 level normally considered a danger to stability. More than 100 million people remain in dire poverty, most of them in China’s rural areas. Within China there remains the opportunity for vast economic and social development that can change the face of China and the world.

Tim Hanstad is President and CEO of Landesa.

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