Can Social Capital Alleviate Relative Poverty?

China has made remarkable progress in eradicating poverty and enhancing the lives of the poor since the beginning of reform and opening up, but it is crucial to understand that China still suffers from uneven and insufficient development today, and that the focus of poverty reduction needs to be shifted to the issue of relative poverty. Social capital is an important complement to the formal system in China’s human society, playing a significant role in resource allocation and information exchange. Cognitive social capital and structural social capital are important dimensions of social capital that provide a comprehensive picture of social capital and are more relevant to the reality of China. This article uses China Family Panel Studies (CFPS) data from 2018 to conduct an empirical analysis of cognitive and structural social capital, finding that both types of social capital can significantly alleviate the relative poverty of individuals, and that there are heterogeneous effects at the North-South level. Furthermore, an analysis of the moderating effect of marketization finds that the poverty-reducing effect of structural social capital only decreases with the process of marketization. Finally, based on the findings of the study, recommendations are made to address the role of social capital in reducing relative poverty.