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Politics
Teamwork to Tame Poverty
Private firms share responsibility to improve the lot of the impoverished
By Yin Pumin | NO. 45 NOVEMBER 10, 2016

 

Workers at a starch factory in Xinhe County, Hebei Province, on October 27. The income of the county’s impoverished farmers has increased thanks to local enterprises which help them to make starch from sweet potatoes and to market the products (XINHUA)

Wang Wenbiao grew up in Hobq, the seventh largest desert in China, where the barren sand ruled the lives of people with an iron hand, relegating them to grinding poverty.

So in 1988, when he was elected director of a local salt field, Wang began commissioning roads across the desert to make the transport of salt easier. Trees and grass were planted along the roads to improve the environment and prevent the sand from encroaching. From then to now, thanks to his vision, more than 500 km of highway and over 70,000 hectares of green belt have been created in the arid desert.

In 1995, the Elion Resources Group was formed with Wang as its chairman. Elion began to develop green industries, investing over 30 billion yuan ($4.46 billion) to nurture businesses that spanned modernized agriculture, natural pharmacy, renewable energy, new materials and tourism. Desertification control was another main objective. Seeds that were cold-resistant, drought-enduring and saline-alkaline-tolerant, were planted in profusion in the desert to turn 6 million hectares into an oasis which today grows medicinal herbs.

By developing green industries and encouraging local farmers to participate in them, Elion has helped 100,000 impoverished farmers in Hangqin, north China's Inner Mongolia Autonomous Region, step out of poverty. In the 1980s, the farmers' annual per-capita income was less than 392 yuan ($58.25). Today, it has risen to 14,000 yuan ($2,069).

On October 16, when the first commendation congress for the National Awards for Poverty Alleviation was held in Beijing, 38 people were honored for their contributions to the national campaign for poverty alleviation. Wang was among them.

Crucial stage

A day later, on the third International Day for the Eradication of Poverty, the Chinese Government released a white paper, providing an update on the progress in poverty alleviation so far and the challenges ahead. The campaign, the document said, has entered a tough yet crucial stage.

Since China began reform and opening up in 1978, more than 700 million Chinese have been lifted out of poverty. However, by the end of 2015, nearly 55.75 million people were still living below the poverty line. According to the national criteria effective from 2011, those earning less than 2,300 yuan ($343) annually vis-à-vis 2010 prices are considered to be impoverished; according to the World Bank, a daily income of $1.90 or less means living below the poverty line. Most of the people living below the poverty line in China face extreme poverty and have a weak capacity for development.

Under such conditions, lifting the entire country's poor out of poverty by 2020 will be challenging, the white paper said. The Central Government, it added, will keep increasing funds for poverty alleviation in the years leading to 2020. From 2011 to 2015, the government had earmarked 189.84 billion yuan ($28.21 billion) for its special poverty relief funds.

For complete poverty alleviation in China, concerted effort and an efficient work mechanism is needed, says Wang Sangui, a professor with the School of Agricultural Economics and Rural Development at the Beijing-based Renmin University of China. At a forum hosted by Phoenix Satellite Television in October, Wang said the government should encourage social powers—private enterprises, social organizations and individuals—to participate in the campaign.

Such participation has already started. On October 17, an industrial investment fund with the backing of 51 large state-owned enterprises, including the State Development and Investment Corp. (SDIC), China's largest state-owned investment holding company, and the State Grid Corp. of China, the largest electric utility in the world, was launched to support economic development in poverty-stricken areas.

The initiative has raised 12.2 billion yuan ($1.81 billion) in the first round and will gradually increase it to 100 billion yuan ($14.86 billion), according to SDIC Chairman Wang Huisheng. Wang said the money will be used mainly for resource exploitation, industrial park construction and urbanization in poverty-stricken areas.

 

Wind power generation plays an important role in providing employment and boosting the economy in Tongwei County, Gansu Province (XINHUA)

Role models

Along with Elion Chairman Wang, Wang Jianlin, Chairman of the Dalian-based real estate giant Wanda Group, and Xu Jiayin, Chairman of the Guangzhou-based China Evergrande Group, were also awarded for their innovative contributions to poverty alleviation.

Both Evergrande and Wanda have put their poverty alleviation models into practice in southwest China's Guizhou Province.

During a Standing Committee meeting of the 12th National Committee of the Chinese People's Political Consultative Conference in July, Xu said private enterprises should shoulder more responsibility in poverty alleviation. In December last year, Evergrande signed an agreement with the Guizhou Provincial Government to invest 3 billion yuan ($445.77 million) to help Dafang, a county in the province, reduce its indigent population. The fund is the largest by a private enterprise meant for poverty relief so far.

According to the agreement, Evergrande will develop industries, provide education, relocate families and offer jobs. It will also set up a special fund. All this is expected to lift 180,000 people in the county out of penury.

"Private enterprises should help the impoverished build their capacity to improve their financial state, not merely give money and handouts," Xu said. Evergrande, he explained, will seek to integrate its targeted poverty alleviation initiative with China's new-type of urbanization—the urbanization plan for 2014-20 that is human-centric and environment-friendly.

Wanda's poverty alleviation initiative started in December 2014 when Wang signed a contract with the State Council Leading Group Office of Poverty Alleviation and Development to help the residents of Danzhai, another county in Guizhou. The goal is to improve the lot of the entire impoverished population of the county and develop a new poverty alleviation model.

The company is investing 1.4 billion yuan ($208.02 million) to develop education and tourism in the county. It has also established a 500-million-yuan ($74.29 million) special poverty alleviation fund to help orphans and people with disabilities. A vocational and technical institute, built at a cost of 300 million yuan ($44.58 million) will train 2,000 students, mainly from the local ethnic population, and absorb 50 percent of the promising graduates each year. In the long run, the institute will create a talent pool to support poverty alleviation in Danzhai.

A tourist town in the local ethnic Miao style is being built to develop tourism in the county. To be completed in June 2017, the town aims to be a unique ethnic travel destination that will spearhead Danzhai's growth. According to a mid-term strategy in Wanda's poverty alleviation plan, the town will generate 2,000 to 3,000 permanent jobs, easing the county's unemployment burden. The group has invested 600 million yuan ($89.15 million) in this project.

Its initiative is winning praise. During his visit to the county in February, Liu Jiayi, General Auditor of the National Audit Office, praised the group's innovation. "The Wanda program is based on in-depth research and makes full use of its advantages to achieve actual targeted poverty alleviation," Liu said.

With the experience it has gathered from nearly three decades of desertification control and poverty alleviation work, the Elion Group is reaching out to the Tengger and Taklamakan deserts, where it will restore 200,000 hectares by developing modern husbandry in three to five years.

The group has also signed a poverty alleviation contract with Zhangbei, a county in north China's Hebei Province, to build photovoltaic power stations, develop eco-tourism and promote green food industries.

Copyedited by Sudeshna Sarkar

Comments to yinpumin@bjreview.com

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