In February 2021, President Xi announced that China had won the war against extreme poverty, lifting 100 million Chinese people out of poverty. Since gaining power in 2012-13, Xi had included anti-poverty objectives among China’s three “tough battles,” alongside risk prevention and pollution control. Although poverty had been among the Communist leadership’s main concerns since the Deng era, Xi’s renewed focus on the issue directly comes from his personal experience during the Cultural Revolution, when he was forced to spend seven years in a rural village in the Shaanxi province (1969-75). Sixteen-year-old Xi thus started to form his political ideas while surrounded by poverty-stricken rural communities. In the last decade, to achieve his long-developed poverty-related goals, though, Xi had devoted increasing attention to connecting China’s cutting-edge technologies with the country’s anti-poverty measures.
The Trilateral Effect of E-Commerce
Among the many tools fostered by the leadership in the context of China’s anti-poverty struggle, one of the most developed remains e-commerce. Thanks to online platforms like Taobao or Alipay, in fact, online sales in poverty-stricken areas had been raised, reaching 16.4 billion dollars in 2019 and contributing to improving living conditions for millions of households around the country.
According to China’s experience, e-commerce has had a trilateral effect on poverty. First, online platforms like the above-mentioned Taobao or Alipay helped poor societies build capacity and, as a consequence, raise incomes. Moreover, e-commerce broke down the barriers between local producers, distributors, and nation-wide markets, expanding the workforce to include women, youths, and the elderly. For instance, Alibaba currently registers a ratio of male-led to female-led businesses that is almost one-to-one. Lastly, several platforms have started offering free online and offline business classes on their websites, which have proved to be extremely popular across China’s poorest provinces. These activities have helped develop the entrepreneurial potential of the country’s rural communities, with the number of digital stores increasing dramatically.
Putting Inclusive Finance into Practice
One of the most critical challenges to the flourishing of small and micro-enterprises around the world has always been the issue of financing. The 2016 “G20 High-Level Principles for Digital Financial Inclusion,” though, stressed the need to rely more extensively on inclusive finance to address the problem of financing successfully.
Under Xi, China has attempted to put the G20 recommendations into practice first by making sure that financial institutions like banks and credit agencies operate on digital technologies to ensure accessibility to financial services even for the country’s poorest communities. Furthermore, the leadership has worked to ensure the involvement of Internet companies in devising better credit evaluation systems that would simplify access to financial services for all segments of the population. Lastly, China spurred cooperation between financial institutions and Internet companies to expand financial opportunities for rural communities.
Targeting Poverty Through Big Data
The use of big data is the most sophisticated tool employed by China to date. Gathering comprehensive and accurate information on the country’s poorest provinces, communities, and households has in fact proven to be crucial in ensuring the success of poverty reduction measures. Big data, thus, monitor the provinces, communities, and households that had been identified as eligible to benefit from poverty alleviation measures, keeping them under observation so as to recognise those lifted out of poverty and those who return into poverty. Through big data, Chinese authorities have been able to understand why specific measures are effective in particular contexts instead of others and design targeted assistance models.
Future Challenges
Despite Xi’s February victory claim and the undeniably positive impact of technology on China’s poverty alleviation campaign, the country still has a long way to go before reaching the goal of developing a “prosperous society” by 2049. Experts have placed Xi’s claim under discussion, claiming that China has decided to set the bar low in terms of defining extreme poverty. The country has, in fact, chosen to define extreme poverty as living on 1.69 dollars a day (current exchange rates), while the World Bank argues for the threshold to be set at 1.90 dollars per day. As a consequence, investments should not cease to be made in the country’s poorest provinces, communities, and households, especially as profound geographic inequalities continue to exist in China, with the country’s Western regions being at a disadvantage.
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