November 29, 2011 / 9:54 AM / 8 years ago

China to raise poverty line to $1 per day - report

BEIJING (Reuters) - China will lift its official poverty line to an annual per capita income of 2,300 yuan ($360) in rural areas, or about $1 dollar per day per person, the official Xinhua News Agency reported on Tuesday.

A child of a migrant worker eats her lunch in a classroom at a primary school in Hefei, Anhui province June 1, 2011. REUTERS/Stringer/Files

The near doubling of the existing poverty gauge of 1,274 yuan annually could increase the official number of poor people in China to 100 million or more, according to domestic researchers and analysts, and trigger new central government aid to families and local governments.

Li Shi, a professor with Beijing Normal University, told local media earlier that the number of poor people could reach 130 million if the poverty line was increased to 2,000 yuan.

Some local academics have suggested China keeps its poverty line artificially low to magnify its achievements in poverty reduction. But the increasingly wealthy government, which is set to reap 10 trillion yuan fiscal revenue in 2011, appears ready to include more into its poverty aid system, which provides subsidies and tax breaks.

The new poverty line, 92 percent higher than the existing benchmark, is still short of the $1.25-per-day measure used by the World Bank and is far below the United States’ line of $17,347 per year for a three-member family.

The ruling communist party has claimed part of its legitimacy on lifting people out of poverty, but while the country’s breathtaking development in last three decades has lifted millions out of extreme poverty, it has also created one of the world’s widest income gaps.

According to the national statistics agency, average annual rural per capita income was 5,919 yuan in 2010, up 14.9 percent from 2009.

The average per capita income of the poorest 20 percent of rural households was 1,869 yuan in 2010.

The 2,300 yuan that the government deems the minimum needed to cover a year’s living costs in the countryside, would barely pay for one night in some hotels in Beijing and Shanghai.

Chinese cities can set their own poverty lines. In Beijing, an urban household with monthly per capita income of less than 480 yuan is regarded as poor.

($1 = 6.3841 yuan)

Reporting by Zhou Xin and Don Durfee; Editing by Chris Lewis

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