Poverty Alleviation Investment and Private Economy in China: An Exploration of The Guangcai Programme

169 Pages·2014·1.09 MB·English

by  Lin Wang (auth.)

Lin Wang
Poverty Alleviation
Investment and
Private Economy
in China
An Exploration of The Guangcai
Programme
Poverty Alleviation Investment and Private
Economy in China

Lin Wang
Poverty Alleviation
Investment and Private
Economy in China
An Exploration of The Guangcai Programme
Lin Wang
Market Economy Academy
Peking University
Beijing , China, People’s Republic
ISBN 978-3-642-40611-9 ISBN 978-3-642-40612-6 (eBook)
DOI 10.1007/978-3-642-40612-6
Springer Heidelberg New York Dordrecht London
© Springer-Verlag Berlin Heidelberg 2014
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of
the material is concerned, specifi cally the rights of translation, reprinting, reuse of illustrations, recitation,
broadcasting, reproduction on microfi lms or in any other physical way, and transmission or information
storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection
with reviews or scholarly analysis or material supplied specifi cally for the purpose of being entered and
executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this
publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s
location, in its current version, and permission for use must always be obtained from Springer.
Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations
are liable to prosecution under the respective Copyright Law.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specifi c statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
While the advice and information in this book are believed to be true and accurate at the date of
publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for
any errors or omissions that may be made. The publisher makes no warranty, express or implied, with
respect to the material contained herein.
Printed on acid-free paper
Springer is part of Springer Science+Business Media (www.springer.com)
Preface: Backgro und and Content
A Basic Overview
In the past two decades, China’s economy has experienced a tremendous
development with GDP rocketing upwards at a rate of 9.8 % annually while
people’s living standard has been improved greatly. However, poverty still remains
as a key social problem. To eradicate poverty and to pursue peace have always been
the two main goals sought consistently by people from all countries. The allevia-
tion of poverty is concerned with the level of human civilization, the well-being of
numerous people, the realization of a harmonious society and the long-term
stability of Socialist China.
After the Third Session of the Eleventh Central Committee of the CPC, the
central government came to realize that the private economy is benefi cial and sup-
plementary to the state-owned economy and should be encouraged. When receiving
representatives from the collective and private economy in 1983, Hu Yaobang
delivered a speech titled H ow to draw the line between honors and disgraces? , in
which he said, “all causes which are benefi cial to the nation and its people are lofty;
all those who work hard and make contributions to the nation and its people are
honorable; yet those who love ease and hate work, who disobey the labor disciplines,
who are chaotic and lawless are disgraceful.” The speech inspired private business-
men greatly and promoted the development of private enterprises.
It was under such circumstances that the Guangcai Programme emerged. China
has long been attaching great importance to poverty alleviation, especially in the
former revolutionary base areas, areas inhabited by minority nationalities, remote
and border areas as well as poverty-stricken areas. The central government has
taken a series of effective steps and formulated policies as well as regulations
accordingly to boost their development. The poverty alleviation and development
programme refers to a set of signifi cant strategic measures taken along with the
implementation of the reform and opening up policy. It arose out of the imbalance
in development between urban and rural areas and was aimed to alleviate and erase
poverty and eventually realize common prosperity. Since the Third Session of the
v
vi Preface: Background and Content
Eleventh Central Committee of the CPC, working with tireless efforts and under
the guidelines of constructing a socialist country with Chinese characteristics put
forward by Deng Xiaoping, the Chinese people of all ethnic groups made signifi -
cant achievements in poverty alleviation, rejuvenation and the prosperity of the
Chinese nation.
Since 1986, we have been carrying out the poverty alleviation and development
programme in a systematic, organized manner and on a large scale throughout the
whole country. Until 1994, the number of people who still lacked adequate food and
clothing dropped from 250 million in 1978 to 80 million.
In April 1994, ten entrepreneurs headed by Liu Yonghao initiated the Guangcai
Programme and thereupon they emerged as one of the most vigorous forces in
China’s poverty alleviation practice. Setting common prosperity as its aim, the
Guangcai Programme invests mainly in the less-developed areas in the central and
western regions of China, which not only helps the local people break off the chains
of poverty but also contributes to the growth of these enterprises.
It has been more than 15 years since the Guangcai Programme was founded and
its achievements in poverty alleviation have been widely reported. However, through
the piles of documents related to the Guangcai Programme, it’s a pity that there is
no book introducing it in a systematic and theoretical manner, which is the ultimate
goal of the author.
After a systematic analysis of the huge wealth gap in China, the author looks
back upon the origin, background and progress being made. In the following
Chap. 1 , he expounds the development, organizational structure and achievements
in poverty alleviation.
In Chap. 2 , the author deliberates on the theoretical structure of the Guangcai
Programme. He starts with the theoretical basis, citing the theories of balanced and
unbalanced development of the economy in regional economics and combining
them with the poverty alleviation practices the Guangcai Programme has been
undertaking, he concludes that the Guangcai Programme is a confi rmation and
development on the theories of regional economics. By combining them with the
achievements that the Guangcai Programme has attained, he proves it to be an
enrichment and development of the theory and practice of poverty alleviation. The
Chinese traditional value of righteousness and profi t, which means righteousness
outweighing profi t and seeking profi t by virtuous means, is also the core value of the
Guangcai Programme. In addition, the Guangcai Programme also sets a good
example to private enterprises in shouldering social responsibility.
In Chap. 3 , the author uses theories of Non-Governmental Organizations (NGOs).
He fi rst defi nes the meaning of NGO. Since the Guangcai Programme is the epitome
of a Chinese NGO, all relevant theories are applicable to it. At the same time, the
Guangcai Programme is a special NGO and has many unique features and qualities.
After a comparison of some major indicators between the Guangcai Programme and
some foreign NGOs, the author devises a comparatively ideal structure for its pov-
erty-relief mechanism, which is feasible and instructive in current Chinese society.
Being an extension of regional economics, Chap. 4 provides a keen insight into
the regional poverty-relief practices and points out the problems therein.
Preface: Background and Content vii
The author makes a summary of his views in Chap. 5 . He points out that by
making people its target and sustainable development its core value, the poverty-
relief practices carried out by the Guangcai Programme promote the innovation and
transformation of the traditional Chinese poverty-relief pattern. Combining the
subjects brought up in Chap. 4 and the analysis in the fi rst section of Chap. 5 , the
author comes up with suggestions for Chinese poverty-relief causes, especially for
Guangcai poverty alleviation practices. The chapter concludes with refl ections on
two different types of poverty-relief practices, “transfusion” and “hematopoiesis”,
which will not be deliberated upon here.
Research Methods
The content of this book is based on Western economics and Chinese poverty-relief
practices. The author wields the latest tools and methods of modern theoretical
economics to expound the relationship between the Guangcai Programme and the
private economy. He also combines the theory analysis with case studies and the
description of phenomena with deep reasoning:
1. For basic theories, the author adopts relevant theories of development economics
and public economics as its background knowledge, discards unrealistic
hypothesis and attaches importance to their pragmatic effectiveness in practice.
2. For statistical analysis, the author uses a methodical set of tools and applies
principles of statistics and descriptive statistics, managing to present the research
results in a direct and three-dimensional manner.
3. As far as the method of comparative analysis is concerned, the author introduces
the comparison of quantity on the basis of the traditional comparison of countries,
integrating quantitative comparisons with qualitative comparisons.
Innovation and Issues
New thoughts are provided in this book:
1. Various perspectives and principles are used to provide different reference points
by which the contributions the Guangcai Programme has made to China’s
poverty- relief cause can be measured. The author borrows theories from devel-
opment economics and discusses the devisal of poverty-relief mechanisms from
the perspective of the supply of public products, breaking the conventions of
using statistics alone to measure the achievements.
2. A comparison of different poverty-relief methods upheld in different countries is
introduced to the research of the Chinese poverty-relief cause and constructive
suggestions are proposed to the system and structure of the Guangcai Programme.
viii Preface: Background and Content
Further deliberations and analysis are made on the differences between
“ transfusion” and “hematopoiesis”.
However, some fl aws are inevitable in this book:
1. Research on the poverty-relief mechanism of the Guangcai Programme should
have been furthered. For one, a lack of fi eld investigation leads to a c omparatively
weak combination of theory with practice. In addition, further deliberations
should have been made on the evaluation of the correspondence between the
Guangcai Programme and the theory of global poverty alleviation and of the
poverty-relief mechanism of the Guangcai Programme.
2. There was a lack of data and documents, and some subjects could have been
studied further. For instance, the reference points of poverty alleviation results
vary from one country to another, which leads to a limited level of accuracy;
most of the data about regional development are cited from the S tatistical
Yearbook of China and Financial Yearbook of China , yet some data and the pro-
fi le of some subjects are not accessible; moreover, computing is inevitably sub-
jected to man-made interference.
3. Further studies are needed on the evaluation and incentive mechanism.
Contents
1 The Development of the Guangcai Programme ........................................... 1
1.1 Background: The Seven-Year Priority Poverty
Alleviation Programme ...................................................................... 1
1.2 Prologue: Let’s Devote Ourselves to Anti-Poverty
Guangcai Programme ......................................................................... 2
1.3 Progression: Suggestions on Developing
the Guangcai Programme ................................................................... 5
2 The Development of the Guangcai Programme ..................................... 9
2.1 Development of the Guangcai Programme ........................................ 9
2.1.1 The Inspection Period (1994–1996) ....................................... 9
2.1.2 Projects-Driven Period (1997–1999) ..................................... 11
2.1.3 The Large-Scale Development of the Western Region
and Development of the Guangcai Programme
(From 2000 to Date) ............................................................... 14
2.2 Structure of the Guangcai Programme ............................................... 17
2.2.1 The Organizational Structure of the Guangcai
Programme ............................................................................. 17
2.2.2 The Management Model of the Guangcai Programme .......... 19
2.3 Achievements of the Guangcai Programme ....................................... 22
2.3.1 Eliminating Poverty, Realizing Prosperity
and Narrowing the Wealth Gap .............................................. 22
2.3.2 Put People First and Build a Harmonious
Industrial Relation .................................................................. 24
2.3.3 Protecting Environment and Promoting Balanced
Development Between Human and Society ........................... 26
2.3.4 Optimizing the Structure and Maintaining
a Fair Competition .................................................................. 33
ix