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China is poorer than we thought, but no less successful in the fight against poverty

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  • Chen, Shaohua
  • Ravallion, Martin

Abstract

In 2005, China participated for the first time in the International Comparison Program (ICP), which collects primary data across countries on the prices for an internationally comparable list of goods and services. This paper examines the implications of the new Purchasing Power Parity (PPP) rate (derived by the ICP) for China's poverty rate (by international standards) and how it has changed over time. We provide estimates with and without adjustment for a likely sampling bias in the ICP data. Using an international poverty line of USD 1.25 at 2005 PPP, we find a substantially higher poverty rate for China than past estimates, with about 15% of the population living in consumption poverty, implying about 130 million more poor by this standard. The income poverty rate in 2005 is 10%, implying about 65 million more people living in poverty. However, the new ICP data suggest an even larger reduction in the number of poor since 1981.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4621.

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Date of creation: 01 May 2008
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Handle: RePEc:wbk:wbrwps:4621

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Related research

Keywords: Rural Poverty Reduction; Population Policies; Achieving Shared Growth; ICT Applications;

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References

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  1. Chen, Shaohua & Ravallion, Martin, 2004. "How Have the World's Poorest Fared Since the Early 1980s?," Policy Research Working Paper Series 3341, The World Bank.
  2. Chen, Shaohua & Ravallion, Martin, 1996. "Data in transition: Assessing rural living standards in Southern China," China Economic Review, Elsevier, vol. 7(1), pages 23-56.
  3. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April.
  4. Chen, Shaohua & Ravallion, Martin, 2007. "Absolute poverty measures for the developing world, 1981-2004," Policy Research Working Paper Series 4211, The World Bank.
  5. Ravallion, Martin & Shaohua Chen, 2004. "China's (uneven) progress against poverty," Policy Research Working Paper Series 3408, The World Bank.
  6. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2007. "New evidence on the urbanization of global poverty," Policy Research Working Paper Series 4199, The World Bank.
  7. Ruoen, Ren & Chen Kai, 1995. "China's GDP in U.S. dollars based on purchasing power parity," Policy Research Working Paper Series 1415, The World Bank.
  8. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
  9. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-61, December.
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Citations

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Cited by:
  1. Raghav Gaiha & Katsushi S. Imai & Ganesh Thapa, 2011. "Role of Agriculture in Achieving MDG 1 in Asia and the Pacific Region," The School of Economics Discussion Paper Series 1104, Economics, The University of Manchester.
  2. Katsushi Imai & Xiaobing Wang & Woojin Kang, 2010. "Poverty and vulnerability in rural China: effects of taxation," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(4), pages 399-425.
  3. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2008. "Dollar a day revisited," Policy Research Working Paper Series 4620, The World Bank.
  4. Peter Edward & Andy Sumner, 2013. "The Future of Global Poverty in a Multi-Speed World: New Estimates of Scale, Location and Cost," Working Papers 111, International Policy Centre for Inclusive Growth.
  5. Angus Deaton & Alan Heston, 2008. "Understanding PPPs and PPP-based national accounts," Working Papers 1120, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  6. Martin Ravallion, 2011. "A Comparative Perspective on Poverty Reduction in Brazil, China, and India," World Bank Research Observer, World Bank Group, vol. 26(1), pages 71-104, February.
  7. Lahimer, Noomen, 2009. "Les IDE et le triangle « Croissance-Inégalités- Pauvreté » dans les pays en voie de développement," Economics Papers from University Paris Dauphine 123456789/5548, Paris Dauphine University.
  8. Paul Klemperer, 2009. "What is the Top Priority on Climate Change?," Economics Series Working Papers 2009-W01, University of Oxford, Department of Economics.
  9. Chen, Shaohua & Ravallion, Martin, 2008. "The developing world is poorer than we thought, but no less successful in the fight against poverty," Policy Research Working Paper Series 4703, The World Bank.
  10. Alan Heston, 2010. "What Can Be Learned About the Economies of China and India from Purchasing Power Comparisons?," Working Papers id:2777, eSocialSciences.

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