International Research on Poverty Reduction Xiaolin Wang Limin Wang Yan Wang The Quality of Growth and Poverty Reduction in China International Research on Poverty Reduction Volume 1 Series Editors Xiaolin Wang International Poverty Reduction Center in China Beijing, China Qianqian Liu International Poverty Reduction Center in China Beijing, China For further volumes: http://www.springer.com/series/11685 International Research on Poverty Reduction Poverty remains a crucial development issue for the world, and China has become an important player in the global endeavor in poverty reduction and development. China has made a substantial contribution to the achievement of the Millennium Development Goals (MDGs) by reducing half of its poverty population. This book series discuss themes such as poverty reduction practices and experience; knowledge mobilization; poverty reduction strategy analysis; comparative research of different poverty reduction models etc. By analyzing China’s poverty reduction approaches and experiences, and comparing them with those of other countries, this book series wishes to provide policy makers, researchers and practitioners in poverty reduction with theoretical and technical support, and to provide a new channel for sharing experiences as well as facilitating collaboration and communication in poverty reduction development fi elds between China and the rest of the world. Xiaolin Wang (cid:129) Limin Wang (cid:129) Yan Wang The Quality of Growth and Poverty Reduction in China SSAP Xiaolin Wang Limin Wang International Poverty Reduction The World Bank Center in China Washington, DC 20433, USA Beijing 100028 , China Yan Wang George Washington University Washington, DC 20052, USA ISSN 2195-9781 ISSN 2195-979X (electronic) ISBN 978-3-642-36345-0 ISBN 978-3-642-36346-7 (eBook) DOI 10.1007/978-3-642-36346-7 Springer Heidelberg New York Dordrecht London Library of Congress Control Number: 2014937805 © Social Sciences Academic Press (China) and Springer-Verlag Berlin Heidelberg 2014 T his work is subject to copyright. 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Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Sponsored by the Chinese Fund for the Humanities and Social Sciences Acknowledgments T his policy report draws on the academic background paper prepared by a team under the overall guidance of Dr. Xiaolin Wang, Director of Research Division of the International Poverty Reduction Center in China (IPRCC) for the 5th China- ASEAN Forum on Poverty Reduction and Social Development. The core team, led by Xiaolin Wang, includes Dr. Deliang Zhang, Liping Xu, and Min Yu. Many others within IPRCC provided helpful comments. Valuable advice was received from internal peer reviewers Dr. Chengwei Huang (Deputy Director General), Xiaojun He (Deputy Director General), Dr. Enjiang Cheng (Senior Technical Specialist), Dr. Linyi Li (Project Offi cer), Ms. Xiaoying Zhang (Project Offi cer), Liping Xu (Project Offi cer) and Min Yu (Postdoctoral). We are grateful to Liping Xu for excellent research assistance, Sabrina Snell (IPRCC Intern) for editing, and Dr. Salehuddin Ahmed (Chief Technical Advisor, IPRCC), Dr. Qianqian Liu (Project Offi cer, IPRCC), Jiming Zhu (IPRCC Intern), and Liyu Qiu (IPRCC Intern) for polishing and proofreading. S pecial thanks to all the publishing editors, production editors and copy editors from Springer and Ms. Li Zhou, Shasha Cai, Wei Yun and all other related editors from Social Science Academic Press (China). F inally, the team gratefully acknowledges the support from Dr. Vinod Thomas, Director General of Evaluation, Asian Development Bank. The fi ndings, interpretations, and conclusions expressed in this book are those of the authors and do not necessarily represent the views of the International Poverty Reduction Center in China. vii Main Mes sages Over the past few decades, many developing countries have been trying to make the transformation from agrarian and resource-based economies to industrialized and technology-driven economies through rapid, inclusive, and sustainable growth. Some of them have failed, but a few countries have succeeded. Among the developing coun- tries from 1960 to 2010 that were studied by the Growth Commission, only 13 econo- mies were able to sustain an average growth rate of 7 % for a period of over a decade (Growth Commission Report 2009). China was the only country that has made three historical transformations: from a centralized planning system to a market-o riented economy, from a closed economy to an open and export-oriented one, and from an agrarian economy to a manufacturing center of the world. In the course of these trans- formations, more than 660 million people have been lifted above the World Bank poverty line of $1.25 per person per day, and China has integrated with the global economies through the exchange of goods and services, fi nancial resources, human capital, and technology. In short, China has risen above poverty and transformed beyond its boundaries during the past three decades’ sustained rapid growth. H owever, experience of the successful emerging developing countries, in par- ticular, China, reaffi rms that it is the quality of growth, with its emphasis on growth rate, poverty reduction, equity, and environmental and resource sustainability that promote development and improve well-being. The global experiences show that a narrow focus on the pace of economic growth can hinder economic development or even reverse social progress. More alarmingly, the blind pursuit of rapid growth can eventually bring a country to the brink of environmental catastrophe, limiting any prospect of future growth and harming the welfare of its population. Economic growth in itself is not suffi cient to achieve social progress, and the role of government in providing basic public goods, addressing inequality and bad exter- nalities such as pollution is critical. The goal of development lies in expanding capability through improvement in health and education and promoting equity and equality of opportunities—ultimately providing freedoms and rights to people to participate in economic and social life. The rapid growth of the past three decades was instrumental in lifting over 660 million people out of income poverty in China. But growth in itself does not guarantee achieving desirable development outcomes. ix