Is The Growth Pro-Poor In China: Evidence From 1991-2004

The number of poor population is reducing with the economic development in China, but the Gini index has climbed up to 0.46 by 2002. The paper calculates the FGT index, decomposes the changes of poverty rate, gets poverty elasiticity, and studies the poverty equivalent growth rate, just in order to test if the economic growth is pro-poor or not. And then it analyzes the factors which have an effect on poverty, and poverty sensitivity. These results are obtained: firstly, the poverty reduction is not stable, and economic growth has positive effect on reducing poverty, while the effects of income distribution are different among different periods. As a whole, the economic growth is pro-poor from 1997 to 2004, but anti-poor during 1991-1997. In addition, during 2000-2004 growth is not pro-poor for the ultra-poor, distribution is opposite; secondly, the situation of original poverty will significantly affect the current poverty, that there is immobility of the poverty, in addition, household size, household population structure, and education level of the head of household has remark effect on poverty; thirdly, the poverty sensitivity in 2004, compared with 1991, has declined, but sensitivity of the ultr-poor is still larger. The policy implications are as following: (1) In order to relieve poverty, Chinese government should count on income distribution as well as economic growth; (2) it is different for different poverty degree in making poverty reduction policies; (3)the government should pay more attention to the ultra-poor when poverty reduction policies are evaluated; (4) the education level of head is increased will remarkly decrease the possibility of poverty, so the educational subsidy on poverty household should be boosted in order to abate the immobility of poverty.