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China's Boom Eludes Those In Margins

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By HOWARD W. FRENCH, The New York Times

Published: January 13, 2008

YANGMIAO, China - When she gets sick, Li Enlan, 78, picks herbs from the woods nearby instead of buying modern medicines.

This is not the result of some philosophical choice. She has never seen a doctor and, like many residents of this area, lives in a meager barter economy, seldom coming into contact with cash.

"We eat somehow, but it's never enough," Li said. "At least we're not starving."

In this region of southern Henan province, in village after village, people are too poor to heat their homes and many lack basic comforts such as running water.

China has moved more people out of poverty than any other country in recent decades, but the persistence of destitution in places such as southern Henan Province fits with the findings of a recent World Bank study that suggests there are still 300 million poor in China - three times as many as the bank previously estimated.

Poverty is most severe in China's geographic and social margins, whether the mountainous areas or deserts that ring the country, or areas dominated by ethnic minorities, who for cultural and historic reasons have benefited far less than others from the country's long economic rise.

But it also persists in places such as Henan, where population densities are among the greatest in China, and the new wealth of the booming coast beckons, almost mockingly, a mere province away.

Experts say that Henan and other heavily populated parts of the Chinese heartland often are excluded from the financial support that goes to the coastal areas, and what anti-poverty measures there are have little effect. Typically, residents of these areas say, money intended for them is appropriated by corrupt local officials.

Paradoxically, they say, they are overlooked precisely because of their proximity to the major economic centers of the east, forced to fend for themselves on the theory that they can make do with income sent home by migrant laborers and other forms of trickle-down wealth.

"Previous poverty alleviation policy focused more on western China, places like Gansu, Qinghai or Guizhou, which were poorer," said Wang Xiaolu, deputy director of the National Economic Research Institute, a Beijing nongovernmental organization.

Villagers throughout this county said that several recent, highly publicized measures by the central government to improve the lot of peasants had produced only a modest effect on their lives.

These included an abolition of agricultural taxes for peasants, the cancellation of school tuition for their children and new pension and health care plans that appear on paper to be more generous for the rural poor.

Since most peasants here have only a glancing contact with the cash economy, the tax exemption is largely irrelevant.

"Ordinary people don't get any real benefits from poverty alleviation programs," said Li Guangyi, 35, a farmer who lives in the village of Zhangyoufang.

"How could relief money get into our hands? It goes first toward relieving the local officials, who get rich on the tragedies of the nation."

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