Public Expenditures Under The 2011-2020 Poverty Reduction Strategy In China

The official poverty reduction strategy defined by the “Outline for Development Oriented Poverty Reduction for China’s Rural Areas (2011-2020)”, has a two-pronged approach. On the one hand, economic development that creates employment opportunities for the poor. On the other hand, expansion of the social protection system to protect the vulnerable. This study describes public expenditures on poverty reduction using available official data for the period 2011-2020. It lists the main programs, evolution of public expenditures, how these expenditures are distributed across provinces, how they compare to other countries in the World and what has been their effect on poverty reduction in China. The study shows that resources allocated to anti-poverty development programs, and to social insurance, have more than doubled under the period of study but expenditures in social assistance, however, have seen a decline since the middle of the decade. This is the consequence of a growing percentage of the population being covered by social insurance and a declining number of beneficiaries of social assistance programs. Despite this rapid increase, expenditures in social assistance and social insurance remain at average levels, when compared in international perspective. There is also some evidence that the country has advanced in terms of coverage but the sufficiency (i.e., the average amount of benefits in relation to standards of living) can still improve significantly. Finally, the study also finds evidence that anti-poverty development programs have a small impact on poverty reduction, but not statistically significant in our sample. On the other hand, productivity growth in agriculture remains the most important driver of poverty reduction although this impact seems less robust than in the past.