Painting the real picture of China's poor

China may have more poor people than it realizes.

Taking into consideration the economic vulnerability resulting from natural disasters, illness and unemployment, about 30 percent of the Chinese are under the poverty line, said Wei Shangjin, chief economist of the Asian Development Bank.

He suggested China's government focus more on promoting social insurance programs toreduce the risk among the group.

Wei unveiled the main findings of a report entitled Key Indicators for Asia and Pacific 2014on Monday at Stanford University.

Rapid economic growth,reform and an opening up policy have led to a dramatic improvement in living standards in China, the report found. "China's achievement on poverty alleviation is the largest in the world," said Wei.

But, the study shows that the traditional $1.25 per day measurement for poverty does not fully capture the extent of extreme poverty in Asia, Wei explained. The"poverty level is defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter", he said.

"Three additional elements should be considered in the poverty picture: the cost of consumption specific to the poor in Asia; food costs that rise faster than the general price level; and vulnerability to illness, natural disasters, climate change, economic crisis and other shocks," said Wei.

He told China Daily that the poverty threshold in China should be increased to $2 per day due to the vulnerabilities the poor are exposed to. Illness, unemployment and natural disasters are the main shocks that can suddenly push people's lives under the poverty line.

"Many low-income households living just above the poverty line can easily fall into extreme poverty due to natural disasters and severe illness," said Wei.

"When I was in Qinghai province two weeks ago, a herder told me that his usual income was good. But when a natural disaster suddenly strikes, his income will drop dramatically to the point where he can't support his family," said Wei.

A vulnerability-adjusted poverty line adds more points to China's poverty rate, which rises to about 30 percent of the population in China.

The findingshold implications for policy makers. Wei urged the Chinese government to not only provide money transfersto the vulnerable groups, but also to foster the development of social insuranceand subsistence security systemsthat are accessible to the poor.

Also, investing in a disaster reduction system such as making infrastructure more resilient, building early warning systems and strengthening social safety nets are also very important strategies for the government to alleviate poverty, according to the report.

zilian@chinadailyusa.com