China's phoney 'poor' counties

BEIJING - While it was applying to be registered on a national list of poverty-stricken counties, the county-level Hailun city in the north-eastern Heilongjiang province was also building a government office costing over one billion yuan (S$206 million).

Elsewhere, in central Henan province's Taiqian county, which was already on the list, local officials were found living it up in villa-like residences, while students were attending open-air classes at cramped schools nearby that had no funds to upgrade.

If Chinese Premier Li Keqiang has his way in the new anti-poverty war he has waged, counties like Hailun and Taiqian that were exposed late last year to be richer than claimed will be bumped off the national list of pingkun xian, or poverty-stricken counties.

One measure proposed by Mr Li late last month is to shorten the list by identifying and removing the fraudulent counties so as to free up resources for those truly poor.

Mr Li's anti-poverty vow has sparked a debate over how China can better help its poor and improve its management of pingkun xian, where most of the 99 million living under China's poverty line of 6.3 yuan daily are located.

But observers say Mr Li could find it hard to shrink the list due to resistance from officials used to enjoying the perks of poverty.

"Being labelled as poor is deemed embarrassing for many in China, but local officials are willing to bear the shame in exchange for the benefits they get even though they may no longer qualify as a pingkun xian," Xiamen University social development expert Hu Rong told The Straits Times.

Those that make it to the list reportedly get subsidies ranging from 30 million yuan to 50 million yuan yearly, which can account for over half of a poor county's government revenue. Other perks include preferential policies in areas like taxation and setting up of industries and priority to students in college admissions.

Misuse of such funds is common due to inadequate supervision, according to China's National Audit Office. It said last December that subsidies totalling 200 million yuan disbursed to 19 counties since 2010 were spent instead on projects such as building grand offices and luxury hotels.

Given the benefits at stake, it is no wonder that counties reportedly hold celebration feasts when they make it to the list while those that are removed would moan over an uncertain future.

Their resistance to removal explains why China has had the same number of pingkun xian - 592 - since 1994, despite growing anti-poverty expenditure that hit a record 40.6 billion yuan last year.

China introduced the pingkun xian system in 1986 by identifying 331 counties nationwide. China has about 2,800 county-level administrative divisions.

In 1994, the number rose to 592 after a government review.

In 2001, the list was revised, with 33 counties in coastal regions removed and replaced by 33 in the central and western regions. In 2011, 38 were removed and replaced by 38 others.

Apart from local officials' resistance to removal, there is a lack of enforcement in removing counties that no longer meet the list criteria, which have been tightened over the years, said China Agricultural University development studies expert Tang Lixia. In 1986, the yardstick was set at annual net income per capita of less than 200 yuan. In 1994, this was raised to 700 yuan.

From 2001, counties were assessed on their proportion of poor people, annual net income of its farmers, and gross domestic production per capita.

"Revisions to the list, which are now done every decade, should be done more frequently," said Dr Tang, who added that the government should do more to ensure accurate reporting of data.

Some think the pingkun xian list should be scrapped altogether, with greater focus placed on people-centric poverty-relief efforts as China urbanises - most counties are largely rural.

But others like Professor Hu differ, saying regions with lack of natural resources, adverse weather conditions and inadequate basic infrastructure need special support to help their poor.

"Policies targeting regions and people should go in tandem though the weightage will shift to the latter as China becomes more urbanised," said Prof Hu.

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