While there’s no doubt that China’s economic rise has improved the lives of a billion people, who aren’t going to jump up and down and shake the world for it (it’s a myth anyway – they wouldn’t have the slightest effect on the passage of the earth). There are still an awful lot of people with very little money available to them here in China.
In fact according to estimates from the United Nations there are around 300 million people living below the internationally defined line of absolute poverty. That’s $1.25 a day to you and me and works out at just over $450 a year.
The Chinese government disagrees and it uses a different measure to calculate absolute poverty in China. It says that people need a minimum salary of 1,200 RMB a year to live on, and that’s only $190 a year. And they say there are “only” 200 million people surviving on this amount in the country.
Either way you look at it; there are a lot of people in China surviving on very little money. It’s roughly equivalent to every single person in the United States living on less than $500 a year. So if you think money’s tight for you, you might give a moment of thanks that you aren’t living in rural China.
But which measure is fairest for calculating real poverty? There’s no simple answer to this question, mainly because it comes down to speculation about the costs of living that people face and what other resources they can access instead of (or as well as) actual money.
There’s no doubt that if you have no occupation then the Chinese government number would be hopelessly optimistic, someone in Niger (which is experiencing famine and drought at the moment) with less than $1.25 a day would be facing very bleak prospects in the short-term and quite possibly would die of starvation if an aid agency wasn’t able to intervene.
But the situation in China is different in most parts of the country, from Niger, in that these very poor people are farmers. And farmers can eat the food they grow. The UN figure allows that the $1.25 includes the necessary income to buy food, as the Chinese farmer can eat the food he or she grows – they may well not need as much money to meet their essential needs.
It’s fair to say that the quality of life of someone who makes 100 RMB a month (roughly $16/17) isn’t going to be the greatest. And for these people it ensures a cycle of poverty that is almost impossible to escape – there’s no free education in China, if you want your child to go to school – you have to pay for it. (This is changing and at least one province has now offered free basic schooling to its hukou holding citizens).
Without education the chances of you breaking away from your farming lifestyle are almost zero, particularly as China already has a surplus of bright young things with degrees and no jobs to go to. It’s even difficult to secure a basic factory working position because illiteracy will block you from most employers hiring criteria.
Now there are people out there that believe if you just “work hard enough” (they never actually specify how hard this should be) you can make a better life and even become rich. These people really don’t know what they’re talking about. Social mobility comes at a price and if you can’t even pay the most basic of entry fees – that of education, you simply cannot advance.
It should be noted that the United States and the United Kingdom are among the nations with the lowest levels of social mobility in the world too – if you’re born poor in these countries, the odds are nearly certain that that’s the way you will finish life. There’s a reason that occasionally a major success story is reported in all the major media outlets – it’s because it’s an exception to a rule, a freak set of circumstances that enables someone to escape poverty and embrace success. And it’s no accident that this usually comes through musical talent or sporting success – because the corporate world is closed to people from poor backgrounds even in the West.
So how much lower are your chances of success if all you have to invest each month is $16? One of the biggest challenges facing China’s economy over the coming years is how to raise the living standards of 300 million people.