Qin Gao. CREDIT: Billy Pickett.
Qin Gao. CREDIT: Billy Pickett.

Poverty Reduction & Social Welfare in China, with Qin Gao

May 3, 2018

Professor Qin Gao, director of Columbia's China Center for Social Policy, explains the workings of the Chinese "Dibao" (limited income guarantee) system. "Dibao is doing relatively better than many other similar programs in developing countries," says Gao, yet it has limitations and some negative aspects. She also discusses Xi Jinping's ambitious goal to eradicate poverty by 2020, and the benefits of a Universal Basic Income (UBI) system.

STEPHANIE SY: Welcome to Ethics Matter. I'm Stephanie Sy. We're talking today about human rights as it relates to government welfare programs with a focus on China.

I am so pleased to be joined by a deep researcher on this issue, Qin Gao. She is a professor and founding director of the China Center for Social Policy at Columbia University. Qin Gao's book Welfare, Work, and Poverty: Social Assistance in China looks comprehensively at the world's largest social welfare program, which exists in China, and a word we're going to repeat over and over again in this conversation, Dibao. That is the social welfare program we're talking about.

Professor Gao, thank you so much for joining us here at the Carnegie Council. It is a pleasure to meet such an expert on this issue.

Dibao was implemented in China in 1999, first in the urban areas. Later in 2007 it spread to the rural areas of China. Describe how the program works.

QIN GAO: Thank you. Dibao's English name is "minimum livelihood guarantee," so the purpose is to guarantee a minimum level of livelihood for the very poor and the very needy.

It started in 1993 in Shanghai as an experiment because back then there were huge state-owned enterprise reforms, so many workers were laid off, and the Shanghai government didn't know how to deal with these vast groups of laid-off workers. They had the money and they had some political autonomy, and they said, "We will try this welfare program." They did, and it was quite successful, so a few other cities followed suit. It became clear that it is needed and is serving the purpose. By 1999, all Chinese cities—over 600 of them—adopted this policy. It was not until 2007 that this policy was adopted in rural China.

STEPHANIE SY: Basically Dibao, from the way you've described it in the past, is a means-tested social assistance program. How is it any different than similar programs, for example, in the United States?

QIN GAO: It is not hugely different. It is a means-tested welfare program. Anybody who wants to get this benefit will need to apply and report their family income. Then, if your income is below the local welfare standard, called the "Dibao line," you qualify. The benefit amount you are entitled to would be the difference between your income and the local Dibao line.

There you see the Dibao program is very localized. That means that the Dibao standards are set according to the local living standard. So if you are from Shanghai or Beijing or Shenzhen, where I'm from, the Dibao lines are different. So local officials have quite a bit of autonomy to decide how to run the program, how to screen the applicants and determine eligibility.

Another rule that is unique for Dibao is that it is very much tied to the Chinese household registration system, which is Hukou, so you are either an urban resident or a rural resident. You could be a migrant, but that would mean you are not entitled to the urban benefits if you move from a rural area to live and work in an urban area if you don't have the local Hukou or household registration status. That excludes migrants from the Dibao benefits.

STEPHANIE SY: That is a large population.

QIN GAO: It's huge. It's hundreds of millions of people right now.

STEPHANIE SY: Why did you decide to really dig deep and study the Dibao system in China? We'll get into what you found as far as what's working and what's not, but overall has it been a successful program?

QIN GAO: It is certainly a mixed story. As you would find in many other welfare programs around the world, Dibao has been serving its due functions. One is to guarantee a minimum livelihood for the very poor, so those who are the bottom of income distribution have been benefiting from it.

Poverty-reduction effects have not been in the entirety, but modest, so people do benefit. Those who are in deep poverty, who are in severe, persistent poverty have benefited more than others who are closer to the Dibao line.

STEPHANIE SY: That makes sense. Again, I have read that you believe Dibao works better than similar programs in other countries.

QIN GAO: Many scholars have done comparative research, myself included. In terms of targeting, Dibao makes some errors, which means Dibao covers some people who do not really qualify for the benefit and leaves out some who really qualify. But that exists in many similar programs because targeting is hard work. If you ask me how much money I make, I may not entirely tell the truth, or I may have a fluctuation in my income sources, so it is not easy. There are targeting errors, but Dibao is doing relatively better than many other similar programs in developing countries.

STEPHANIE SY: Why is that?

QIN GAO: I think it is the double-edged sword in the Dibao program because it is implemented very systematically by the branches of the Ministry of Civil Affairs in every locality. These civil servants are dedicated to making this program successful, so they work hard, and they mobilize the local communities to participate in the screening, selection, and verification of Dibao eligibility, so that could work to their advantage.

At the same time, it is a very costly process. Your personal identity and family resources, even health conditions, could be exposed to the community so that it reaches some level of accuracy. I would say it is a mixed story.

STEPHANIE SY: When you look at the successes of Dibao when it comes to people living in deep poverty in China, how are you measuring that success? Are we looking at education outcomes and health outcomes and the ability to be more socially mobile afterward? Or is this a temporary assistance program? Do you see that people are able to be lifted out of poverty, or do they remain forever on Dibao?

QIN GAO: In my work, I look at several different aspects because there is no single clear measure that could judge its success. In terms of poverty reduction, as I said, Dibao does reduce poverty, especially deep and persistent poverty.

I also look at how families receiving this benefit use the money. Most of the families do use the money to help with their health care and education costs. In both rural and urban areas health care is a major challenge for many of these families. In urban areas many families also use the Dibao money to pay for education. That is a good story because people are using this money to invest in human capital. But that also showcases the lack of sufficient health care support and education support for these families.

Another aspect I look at is social participation, how Dibao recipients feel in terms of happiness and life satisfaction, how they participate as social citizens. In that regard, it is not a very positive picture.

Dibao screening is quite stringent, lengthy, and stigmatizing. If you apply for Dibao, your name will appear on a list to be posted in the neighborhood so that your neighbors and community members can give feedback about whether you truly qualify for this benefit.

STEPHANIE SY: That is very different. That is an aspect of the program that would be different than similar systems here.

QIN GAO: From many other countries. That is very true.

That is partly characteristic of the socialist system. In China if you ask people about it, it is not great, but it's not a big deal either. People are used to their privacy being exposed. In order to get the welfare benefit, people—including the non-recipients and the recipients—would say, "Yes, we need to expose our information to be sure that we truly qualify."

STEPHANIE SY: Which might inflict a great degree of shame on a certain type of person, a lot of people, I would imagine.

QIN GAO: Very much so. That is one of my concerns, especially for children. It certainly applies to everyone, but if you are a child and you go to school and your family receives Dibao, your Dibao status will be known by your peers and by your teachers, which may mean that you can get additional benefits, but you will carry that label, and it is not a great one.

STEPHANIE SY: Your research focus has partially been on the stigma that children face as part of the Dibao system. Is there any way to quantify what the effects of that stigma are?

QIN GAO: So far there has not been very quantitative research in that regard. In large national surveys, there are measures of subjective well-being, dignity, happiness, social interaction, and social inclusion, but so far there has not been research in that regard mainly because we lack longitudinal data, we don't track children over time to see how they are doing.

That is one of my current research efforts in collaboration with UNICEF China, to look at this group which has been getting welfare support, which could be a positive effect or could have negative consequences as well. I am looking into this issue. There has been qualitative evidence to show how children are really subject to this shame and burden as a Dibao recipient.

STEPHANIE SY: I would be very curious to know if that qualitative research speaks to the question of the transmission of poverty from one generation to the next and whether being stigmatized as a child who is in the Dibao system and having your whole community know about that has its own risks, or whether maybe it has a benefit.

QIN GAO: That is very complicated. Qualitative research gives us rich information and a deeper story, but it doesn't necessarily track people over long periods of time. In the qualitative evidence which I cite in my book, there have been mentions about how children are looked down upon at school. Some children feel isolated, and they lose their friends.

STEPHANIE SY: Are they discriminated against?

QIN GAO: Some children report that their former friends, once discovering they are Dibao recipients, would say, "You didn't tell us this fact, so you are not being honest with us as a friend." Some of these children feel isolated. There are also parents who say that because they are afraid their children will be ashamed at school they choose not to apply for Dibao.

STEPHANIE SY: So they remain potentially in deep poverty.

QIN GAO: Very much so.

STEPHANIE SY: This issue of children is very interesting to me. One thing I've heard you say is that you would like to see children in a way separated from the larger conversation about poverty programs. What do you mean by that?

QIN GAO: Not entirely to be separated, but I think children deserve more of their own focus. Children are the asset of the country. If we don't invest in children, if we don't give them an equal opportunity from the early years of their lives, the whole country is going to lose out. In today's society I think in China and as in many other countries, income inequality, wealth inequality, and also life opportunity inequality is very troubling to me. If the children who are born into poor families cannot get their fair share, if they don't see a future in this globalized society for themselves, then everybody loses out.

I think we do need to think about social policies, interventions, and programs for the children to support their growth, their education, and their rights as children. We don't often talk about that.

STEPHANIE SY: There is so much research and consensus now about the importance of zero-to-five education and health. Two main focuses of your research are the importance of providing that. In China is there general access to basic health care and education, especially in rural areas today?

QIN GAO: In terms of education, there is a compulsory education law which says every child starting from age six is entitled to go to compulsory public education for elementary school and middle school. However, before age six there is no such law. Rural children would really suffer more than urban children. With urban children also there is inequality. There are urban poor children, but there are a lot of educational facilities and entities in urban areas. In rural areas there are fewer.

Actually, some of my friends are working to fill this gap. There is private philanthropy, organizations, and social workers—my former students and colleagues—who are working to bring early education and nutrition to rural children, and also some parenting education to the rural caregivers, some parents, some grandparents, so they can provide the care, stimulation, and enrichment the rural children need from the early stage.

STEPHANIE SY: The urban-rural inequality gap: How successful is Dibao at addressing that? Sixty million people I read receive the Dibao benefit, which is actually a lot less than I would have thought. I think in the United States there are 45 million people or so in poverty. Given the population of China, 60 million people receiving Dibao actually seems low to me.

QIN GAO: In recent years it has been fewer than that. The most recent data shows in rural areas only about 7.5-7.6 percent of the rural population get Dibao today. In urban areas it is less than 2 percent. So poverty, as reflected by the number of Dibao recipients, has [affected] a smaller proportion of the society.

I think partly this is because probably the Dibao lines are not raised as fast as the living standard. The Dibao line is adjusted every year to try to keep pace with the average income or livelihood level, but its growth is much slower than the average income level in the localities. Partly also the country has shifted its focus to eradicating rural poverty by 2020, which means Dibao is playing an increasingly smaller and even marginal role in addressing poverty.

STEPHANIE SY: Let's talk about that. President Xi Jinping has set this very ambitious goal to eradicate poverty in all of China by 2020. That is two years from now. Talk about the importance and the significance of that statement by the president of China from a global and historical context, and then we can talk about whether it is achievable.

QIN GAO: To be clear, President Xi's poverty-eradication goal mainly focuses on rural China, so urban poverty is very much left out of this picture. But according to the rural poverty line, urban poverty is very small, the 2 percent getting Dibao very much reflects that reality.

President Xi's ambitious goal to eradicate poverty in rural China by 2020 is quite unique and very much a breakthrough from history and stands out in a global context. In Chinese history the previous leaders all have said: "We need to address poverty. We need to eradicate poverty, and socialism is not poverty." But none of them set a clear goal of achieving that by a certain date. This is entirely new, that by 2020, one year before the centennial anniversary of the Chinese Communist Party's establishment, which is 2021, poverty will be eradicated. That is very new, and that will be a major milestone.

Globally we have the U.S. War on Poverty, President Lyndon Johnson; in the United Kingdom, Tony Blair was really aiming to address child poverty during his administration. Just two years ago, Prime Minister Modi in India also said, "All India needs to achieve this anti-poverty goal as well."

That is encouraging as a poverty scholar if every country's leader could shine the light on this issue. It's great. China right now is mobilizing a lot of resources, including money and personnel, across the country to try to achieve this goal.

STEPHANIE SY: What role does Dibao have in reaching that goal?

QIN GAO: There is certainly a conversation about how to connect or unify Dibao with the poverty-eradication goal. But I have to say Dibao is playing a very small role in this because the focus of the anti-poverty goal is to move people out of poverty permanently, and Dibao doesn't serve that goal because it is to provide assistance. I think there is a lot more work to be done in terms of how to better connect the two and look beyond 2020 as to what will happen to both Dibao and other supports or efforts to address poverty beyond that.

STEPHANIE SY: What needs to happen to reach that goal and to reach maybe the longer-term goals that you discuss?

QIN GAO: There are a lot of initiatives currently in place to try to achieve the poverty-eradication goal by 2020. You have probably heard that one is resettlement, to move people from these very poor regions to most likely nearby cities or towns where facilities are better and work opportunities are more available.

There is also the huge promotion of e-commerce. These large private companies such as Alibaba and Jingdong have been working with local governments to bring e-commerce platforms—

STEPHANIE SY: To small businesses.

QIN GAO: —and basically to poor people. This project is very much targeted. If you are or I am identified as a poor person, poor household, some resources, or some approach will be applied to me so that I could reach that goal by 2020. In addition to that, there is a local government official who is charged to help me to reach that goal by the deadline.

STEPHANIE SY: One of the things that has come up again and again in your research is the importance of education and health care in truly bringing people up to and beyond the poverty line. Talk about whether that is part of Xi's plan and whether it needs to be.

QIN GAO: I think they do need to be because according to the current data about half of the population being covered by this anti-poverty goal are poor because they have health care challenges. I think another maybe 20 percent or more have education needs. Those are some of the deepest roots of poverty, not only in China but in other countries as well.

STEPHANIE SY: Everywhere.

QIN GAO: But they are not easy to fix. In the remaining two years to achieve this goal, we will see more approaches of pouring resources to help mobilize the local people to escape poverty but not necessarily through education and health care support, so I think more attention needs to be focused there.

Education is being supported. There are local cases where children get 5,000 yuan, a lump sum amount, to help them to afford better food, clothes, and study materials, but whether that could be sustained is a challenge.

STEPHANIE SY: That brings me back to issues of inequality, the notion of 50 percent of people who are in poverty, it started with a health care issue. Another aspect of what lands a lot of people and especially women in poverty is the illness of a spouse or a parent or a child. Talk a little bit about what your research says about what is happening there and how China is addressing that.

QIN GAO: Health care is a major challenge because you need money and resources and medical facilities to get your health better. On the other hand, as you said, there is the need for care. If I'm sick, I need a caregiver. These demands are simultaneously happening.

Health care in China has been expanded so rural residents now have a national health care system. You contribute to it, and you can also get reimbursements and benefits. But the reimbursement rate is very low in rural areas. That is one side of it.

Second, it doesn't cover many specific diseases, usually severe diseases. If your family happens to have one of those happening, you are going to incur catastrophic medical expenses that are not going to be covered.

Third, the facilities are not there—doctors, nurses, and hospitals. That is why many people in China both from rural areas and from smaller cities come to big cities to seek health care. That not only incurs medical expenses but also transportation, where do you stay, the caregivers?

STEPHANIE SY: They're not working. They're not able to make income.

QIN GAO: They cannot, yes.

That is one side of the story, the medical side. The other side is care. If you have a family member who has mental illness, who has a disability, who needs you to be there, then you cannot go out and work. You cannot escape poverty by pursuing work or by relocating. I think care and also the market need to be addressed, need to be a focus when we move forward with the anti-poverty goal.

STEPHANIE SY: One of the ways I've heard this discussed is that care of a sick child or parent or spouse needs to be valued somehow in the economy.

QIN GAO: Yes, very much. The same as in the United States.

STEPHANIE SY: Same discussion happening.

QIN GAO: Yes. Care is so needed, so essential, and high-quality care for young children, older people, and people with sicknesses is a universal need, but we don't value it. We don't pay it with good enough money. That burden or that responsibility falls on women.

In China, women care for young children, older people, family members with illnesses, and women are assumed to be caring for their in-laws and other relatives. How do they pursue work? How do they escape poverty?

STEPHANIE SY: Caretaking has often been viewed as women's work in many parts of the world, including in the United States. There really is a gender inequality issue as well when it comes to poverty in China, just as there is here.


STEPHANIE SY: One of the things I know you've started looking into—I don't know if you would qualify it as an alternative or how you would characterize it—is universal basic income (UBI). It's a topic we've discussed many times here at the Carnegie Council, basically cash transfers to citizens without the kinds of means testing and strings attached of most welfare programs.

Qin, what is your view of UBI and its potential?

QIN GAO: I think UBI is an important policy initiative. I am so glad it is revived and is in our current policy debates in the United States, in the world, and also pertaining to China. I don't think it will replace welfare because when we talk about welfare, we are talking about welfare rights.

But UBI really shifts the dialogue to a new arena: As human beings, what do we need? What are some common human needs we all share, and what would mobilize us to be able to achieve our full potential?

I often think of one episode in my life. I was in Doctoral studies, and my roommate was pursuing political science studies. She was from Canada. One day she said she was going to drop out of the program and make films. I thought, How could you do that? She explained to me that they have national health insurance, which relieves her from being worried about that, meeting that need. So I thought, Wow, to have that level of safety and being able to pursue your dreams is wonderful.

Of course, when we bring poverty into this, it is different. People are so desperate to meet their fundamental survival needs.

But imagine having a universal basic income. You qualify for it just because you are a human being. Imagine if children in the poor families in rural China could get this benefit. That would play such an enabling and assuring role for the children.

In China in 2001 there was a major policy breakthrough, which was implementation of a universal monthly stipend for orphans in China, which was later expanded.

STEPHANIE SY: For all orphans in China?

QIN GAO: Yes. Which is UBI, universal basic income. Right now with colleagues I am looking into how that has been working and whether we could expand that to a larger pool of children in China.

STEPHANIE SY: How did that program work? At what age would the orphan get the income, and who would be in charge of it?

QIN GAO: That program was also initiated and implemented by the Ministry of Civil Affairs, which also implements Dibao. Initially it targeted two groups, orphans—some still living with their family members or relatives, some placed in institutional care. It was also a shift that the policy design behind it was that children deserve this monthly benefit, and they are getting it.

Unfortunately, we don't have a national survey or study following them. There have been scholars who look at specific institutions and the children hosted in their home villages. We are doing new research to look into the effectiveness of this program.

STEPHANIE SY: What specifically would you like to know about that program in trying to understand whether a universal basic income might be a good option?

QIN GAO: I think I would look at what we have been talking about, whether their health care needs are better met; whether they could get better education, stable education, good quality; whether they could be able to afford what they need, livelihood needs; and how they feel, whether they feel they are more dignified, they are less stigmatized compared to other children, and they are not so much looked at as subjects in the institutions, they are more their own boss, if we can use that term. I would want to look at both the material well-being and subjective well-being to see whether this program worked and what can be tweaked, but whether it has the potential of being expanded to cover more children.

STEPHANIE SY: When we talk about universal basic income we talk about a different way of looking at what basic human rights are. I wonder if you will talk about it through that lens, and the paradigm shift that would be needed not just in China, but in discussions of universal basic income that would be a huge paradigm shift here in the United States as well.

QIN GAO: Yes. I feel what we in this very rapidly developing world today are struggling with is inequality, the unbalanced life opportunities. We don't seem to have a good solution. We are further and further divided into pockets of society. What is our share of the common needs or aspirations? What would be good for the social good?

I think UBI fundamentally addresses that. Different people could be entitled to the same things, same benefits, just simply by being a citizen of the society. I think that shifts a lot of the divisions in our societies.

I am a mother of young children. I look at my children and think about what they have and what others may not have. I think especially children deserve to have the same basic bundle of goods and opportunities.

STEPHANIE SY: Do you think from a philosophical level that will have more resonance on a society like Chinese society than it would in a—not that China doesn't have its share of capitalism—purely capitalist, individualistic society like the United States? It is a philosophical question.

QIN GAO: That has been on my mind, especially as I compare the U.S. and Chinese societies. They are very similar in valuing individual effort. Effort is hard to measure. You could say, "This person worked hard, the other person didn't work hard," but the endowment of what you are born into is often not taken into account when we talk about that.

STEPHANIE SY: That's true. When you're born into privilege versus when you're born into poverty, there are just different opportunities.

QIN GAO: We don't even have that awareness because you are born and brought up in this particular environment, whether it is a poor or rich environment. You are just not that aware of what is outside and what your peers are doing. I think we do have those barriers to break and those bridges to build, and I am hoping UBI as one of the policy solutions could try to achieve that. It will not be easy in the United States or in China because that is not very deeply rooted in our cultures.

STEPHANIE SY: It also challenges this very American assumption or fear that giving people free cash will create a disincentive to work. Proponents of UBI generally seem to believe that people in general want to work.

QIN GAO: Yes. From my research about welfare, work, and poverty, people do want to work if they can. Of course, some people don't think the care they are providing is work because our society is not socialized to think that way, which is unfortunate.

All the people who are getting the benefits want to work, they want the dignity, they want to be able to contribute. There is a body of research in international literature to look at how welfare benefits affect people's consumption of "temptation goods"—basically alcohol, cigarettes, and drugs. We don't have evidence to show that people are using the money not so wisely.

STEPHANIE SY: Even going back to Dibao, what you're showing is that the assistance programs, people generally spend that on essential needs—

QIN GAO: Especially education.

STEPHANIE SY: —and education, which will better their lives and hopefully help them out of the cycle of poverty.

Also going back to Dibao, you talked a lot about targeting and the inefficiencies of targeting. In a welfare-assistance program, what that generally means is you have to make sure these people don't have a car, don't have a refrigerator, and don't have a cat.

QIN GAO: Don't have pets.

STEPHANIE SY: I read that in your research. If you have a car, a pet, or a refrigerator, you are not eligible for Dibao.

QIN GAO: Right, and don't send your kids to a very fancy school.

STEPHANIE SY: Fancy school, because otherwise you don't qualify for the assistance.

QIN GAO: That's exactly right.

STEPHANIE SY: But that is a very costly process, targeting who exactly in the community should or should not be a qualifier. With universal basic income, you basically get rid of that part.

QIN GAO: That's exactly right. In the current system, you have to reverify people's eligibility every three months, every six months, so it is very costly.

The other side of the cost is the social cost—isolation and shame—because Dibao does invite your neighbors and community members to give input and basically monitor your behavior, your consumption, and your habits.

At the same time, UBI will not be easy. China is such a huge country. Imagine the costs that would need to go into it.

But I would say that the current poverty-eradication goal is investing a lot of money into the project. Every poor person identified to participate in this program is right now getting on average about 5,000 yuan renminbi, and that is not trivial. Imagine shifting that to a universal benefit.

I think when we think about UBI we have to think about what we are contrasting it with, what is the alternative?

STEPHANIE SY: Let's take a step back and just talk about the work that you've spent your life pursuing. What do you feel like the impacts have been thus far of your research?

QIN GAO: I love this research. Even if I don't get any reward for this, I probably would still do this work. But it is gratifying to see the impact of my work, both in terms of scholarship but also policy impacts. I do talk to central government and local government officials about my research findings. Sometimes they may not be very happy to hear what we discover in our research, but they do appreciate it.

I think these officials have a genuine interest in improving performance, and many of them also struggle with the same challenges we face, how to unify or better cooperative different programs such as Dibao and the poverty-eradication program, how to really address the needs of different participants—children and people with illnesses. Maybe the real policy world is more complicated and things happen slower, but I do try to share my research findings and hope to promote certain policies I think based on the scientific research we do are better solutions.

STEPHANIE SY: Do you think President Xi's clarion call for eradicating poverty has given researchers like yourself an opportunity in ways that you haven't had before?

QIN GAO: Focusing on poverty is new, and poverty research is getting a lot more attention these days. That's great, but things in the field, in the country, are happening so fast to achieve the goal. We as researchers are running—

STEPHANIE SY: Trying to get the data.

QIN GAO: Right, trying not to rush to conclusions but still stick to the standards.

STEPHANIE SY: You want to get it right.

QIN GAO: Right, and that's not easy if things are happening so fast. At this point, I am very glad I did the Dibao research really building on years of research and drawing from my colleagues' work to look back from 1993 to today what has been happening, what have we achieved, and what to do next. I am hoping those findings will be able to inform not only Dibao in China but also similar welfare programs in other countries, but also this ongoing poverty-eradication program.

I am doing all I can to also study the targeted anti-poverty project to see what are some effective measures, and what can be modified to be better, and what would we do beyond 2020 because time will continue. Children will continue to grow up, and there will be children born into poverty.

STEPHANIE SY: There will be new challenges. A challenge we were discussing as far as U.S. inequality is the technological disruption created in the job force.

President Xi in issuing this call, is it a sign of moral leadership?

QIN GAO: I think so. I think he probably would like to appeal morally. I think he has said in his speeches that this very much resonates with socialism. China is developing very quickly and aspiring to be a world leader and is probably already a world leader in President Xi's mind, but then we are leaving some people behind, and that's not okay, especially in rural China.

Many rural residents truly believe the Communist Party and socialism should be responsible for supporting people's livelihoods. I think this certainly resonates with Chinese citizens, especially in the rural areas.

STEPHANIE SY: Is there a stability issue for the Chinese government as well to have growing inequality as there become more and more Chinese millionaires and billionaires, and those in rural areas that are still in Dibao and are being left behind?

QIN GAO: That is certainly a potential threat. How Dibao started was partly to address this worry. In urban areas back then, people who used to have very stable, secure, life-long jobs lost them, so local governments back then would be worried that stability would be challenged, social order would be disrupted, and economic growth would be slowed down as a consequence.

I think this very much goes back to that narrative. Rural poverty needs to be addressed.

STEPHANIE SY: So, political reasons as well, and perhaps the survival of the Chinese party system and its economy also.

QIN GAO: Yes, I would agree, and that is true for many welfare programs and anti-poverty focuses around the world. It will be very interesting and important to see what happens in 2020.

STEPHANIE SY: Qin Gao, thank you for illuminating so much when it comes to China and poverty and the steps that are being taken. Your research is fascinating, and we appreciate you sharing your ideas. Thank you.

QIN GAO: Thank you so much.

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