Material 2 for the press conference of the State Council Information Office

Background Material for Press Conference

on China Poverty Alleviation Day

(Oct14th, 2014)

the State Council Leading Group Office of

Poverty Alleviation and Development of China

I. Brief Introduction to Development-oriented Poverty Alleviation

Development-oriented poverty alleviation is an integral part of socialism with Chinese characteristics. Between 1978 and 2010, 250 million people were lifted out of poverty according to China's poverty standard, and 660 million by international poverty line. Development-oriented poverty alleviation has facilitated progress of poor regions, bridged the widening gap between regions and improved livelihood of poor population, setting China on a path of poverty alleviation with Chinese characteristics. Globally, China is the first country to reach United Nations (UN) Millennium Development Goals (MDG) of halving poverty ahead of schedule, contributing significantly to the global effort to end poverty.

In 2011, China raised its poverty line substantially. In 2013, according to the new standard, 39.89 million poor rural residents overcame poverty with poverty headcount ratio reduced from 12.7% to 8.5%; per capita income of rural households in key counties increased to RMB5,389 from RMB3,938, an increase higher than national average.

After years' of practicing, we have developed a China-style poverty alleviation approach, one that emphasizes economy and empowerment, combines the role of government, society and farmers, integrates general policy with preferential policy, and aligns poverty alleviation with social security. And we have gained some basic experience: 1). Accelerating development represents a key solution to poverty alleviation. 2). Improving standard of living is a priority for poverty alleviation. 3). Adhering to the leading role of the Party Committee and dominating role of the government, and enhancing organizational leadership mark a firm guarantee for poverty alleviation. 4). Empowering poor population is an important way out of poverty. 5). Encouraging wider participation through pair-up, east-west and society-based poverty alleviation programs is an effective approach to poverty alleviation. 6). Respecting the principal role of the people in poor regions, stimulating self-dependence and hardworking spirit, supporting initiative and creativity of poor population constitute a principal source for poverty alleviation.

China is still in the primary stage of socialism, and will remain so for a long period of time. Such a stage is featured by a relatively low development level, noticeable regional disparity, underlying rural development problems, and myriads of difficulties facing poor people in daily life and production, not to mention the huge challenges for common prosperity. 1). Poverty is still a salient problem in China. Demographically,82.49 million people are still trapped in poverty according to China's poverty line, and 200 million according to international one. Geographically, 120, 000 villages, 832 key counties and counties in extremely poor contiguous regions remain stricken with poverty. Poor people are still beset by unavailability of water, road, electricity, school, heath-care, income increase and loan.2). Policy system is not that well-designed. Fractured management mechanism, confusing responsibilities, poorly-executed policy and foul play in local fund use exist to varying degrees. 3). Social participation is low. A platform for extensive social participation is yet to be built, and policies supporting, guiding and overseeing poverty alleviation are inadequate. If we were to build a Xiaokang (moderately prosperous) society in all respects by 2020, we must work even harder on poverty alleviation front.

Development-oriented poverty alleviation is also an agenda taken seriously by the 18th Communist Party of China (CPC) Central Leadership. General Secretary Xi Jinping and Premier Li Keqiang have pointed out new direction, new requirements and new arrangements for poverty alleviation in their several visits to poor regions. In 2011, CPC Central Committee and the State Council issued The Outline for Development-oriented Poverty Alleviation for China's Rural Areas (2011-2020) (No. 10 Document, 2011 issued by the Central Committee of CPC), making extremely poor contiguous regions main battlefield for poverty alleviation and engineering an integrated poverty alleviation structure. In 2013, General Office of CPC Central Committee and General Office of the State Council issued Opinions on Promoting Rural Poverty Alleviation through Innovation Mechanisms (Circular Zhongbanfa [2013] No.25), clarifying 6 institutional reforms and 10 priority programs. Now, development-oriented poverty alleviation is steadily under way just as the Central Committee and the State Council have envisioned. For this year, priorities include: 1). Fulfilling three major tasks: lift 10 million people out of poverty, set up files and cards for poor villagers, and send resident assistance teams to all poor villages; 2). Building brands of three poverty alleviation programs: Yulu (Rain and Dew) Program, Relocation Program and Micro Credit Program; 3). Reforming or establishing three mechanisms: reform performance evaluation mechanism, establish restriction mechanism and improve exit mechanism. Meanwhile, social participation mechanism will be innovated to encourage wider participation.

II. Current Agenda for Development-oriented Poverty Alleviation

Now, development-oriented poverty alleviation is undergoing a deepening reform and substantial improvement. All localities and departments, especially poverty alleviation authorities all over the country, are busy implementing what's required by the Central Committee and the State Council in Circular No.25. After carefully studying the anti-poverty strategic thinking of Secretary General Xi Jinping as well as decisions and requirements of CPC Central Committee and the State Council, The State Council Leading Group Office of Poverty Alleviation and Development (LGOP) put forward its basic ideas of "12345":

"1" means to pursue one goal. Reach the goal of "Two Worries-Free (food & clothing) and Three Services-Guaranteed (compulsory education, basic health-care and housing), One Higher (per capita income of farmers in poor regions higher than national average), One Closer (main indicators of basic public service closer to national average) and One Turn-around (turn around widening gap)" specified in the Outline by 2020. Focus on complying with Circular No.25 for the next three years, and fulfilling the State Council's requirement of reducing the number of rural people in poverty by 10 million this year.

"2" means to highlight two issues. Highlight targeted poverty alleviation (to villages and households) and poverty alleviation in poor contiguous regions to form a virtuous cycle in which regional development and poverty alleviation complement each other.

"3" means to build three brands. Start from "Yulu Program" designed for new workforce of poor regions, Micro Credit Program and Relocation Program to "uproot poverty" by enhancing self-development ability through vocational training; to enable poor people to "job-hop out of poverty" by supporting specialty industry through innovating pro-poor financial products and services; and to help poor rural households without adequate survival and development conditions "relocate out of poverty" by moving them elsewhere in an organized way in the context of urbanization, new rural construction and industrial park cultivation. We will work hard to build the three programs into brands of effective poverty-fighting innovations.

"4" means to grasp four relations. 1). Relations between tough battle and protracted war. We must fight a tough battle of getting deliverables of each stage, and at the same time, be prepared for a protracted war of poverty alleviation, being fully aware that poverty alleviation is a historical mission throughout primary stage of socialism. 2). Relations between solving prominent problems and innovating mechanisms. We must solve prominent problems of ensuring access to infrastructure such as water, electricity, road, shelter and IT, improving public service such as education, health-care and culture and developing specialty industry to increase income of the poor, and at the same time, make breakthrough in innovating mechanisms related to performance evaluation, restriction and exit, targeted poverty alleviation, resident government official assistance, pro-poor financial fund management, financial service and social participation. 3). Relations between central and local power. We must follow central government's comprehensive planning, and at the same time, improve the system in which provinces take total responsibility and counties take charge of implementation. In other words, responsibilities, tasks and priorities of each government level should be made clear. 4). Relations between "blood transfusion" and "blood-making". By "blood transfusion", we mean improvement of external assistance and social security system, and by "blood-making", we mean empowerment of poor people in poor regions.

"5" means to take five priorities. We must focus on five priorities. 1). Complete poverty identification, poor village/household information-filing and card-making, and establish a comprehensive and accurate poverty alleviation statistics and dynamic monitoring system this year. 2). Ensure every village get its resident assistance team and person-in-charge. 3). Strengthen management of funds. Pro-poor financial funds should be given to villages and households, while funds for implementing district planning should be accounted for by industrial sectors. 4). Improve financial service. Besides general financial policy, we will promote preferential financial policy and create more financial products to support regional development, pro-poor industries, flagship enterprises and poor households in poor regions; we support cooperation between local governments and financial institutions on crediting by establishing loan loss reserve fund and micro credit insurance. 5). Innovate social participation mechanism to form an integrated poverty alleviation structure in which government, market and society all pitch in.

III. Basics about Poverty Alleviation by Society

Social participation is an important experience for China's development-oriented poverty alleviation as it fully reflects China’s political advantages and superiority of socialism. Over the years, three participation frameworks have initially taken shape.

1). Pair-up forpoverty alleviation. The program, initiated in 1986, involves pairing up Party and government bodies with poor counties. Now, 310 central and national agencies, businesses and public institutions answering central government's call are paired up with 592 key targeted counties, representing a total coverage of all key counties identified in national poverty alleviation program. Led by central departments, provincial, municipal and prefectural authorities are going all out for pair-up poverty alleviation. In 2013, 135,000 entities answering sub-central government's call were paired up with 136, 000 poor villages, among which, 6,300 entities participating in provincial government's program were paired off with 1,200 poor counties, 4,800 poor towns and 20,000 poor villages. The military and armed police forces are paired up with 2,856 poor villages in 547 poor towns of 63 poor counties located in 21 provinces. Beijing, Tianjin and Shanghai, the three directly-controlled cities, have been organizing campaigns to pair off departments directly under municipal government with less developed villages. It suffices to say that pair-up poverty alleviation has covered poor areas top down and inside out.

According to statistics, in 2013, 451 central and national government officials were sent to poor pair-ups and RMB2.082 billion (including supplies equivalent) were invested for infrastructure (RMB1.48 billion or 70.8%), industrial development (RMB193 million or 9.3%) and science, education, culture and health (RMB235 million or 11.3%). In the same year, the government organized 6,162 visits to poor pair-ups, helped attract RMB5.385 billion of funds, trained 116,000 persons, sent 70,000 rural workers out for better-paid jobs, and gave financial support to 64,500 poor students.

2). East-West coordinated poverty alleviation. In July 1996, acting on Deng Xiaoping's strategic thinking of "Two Overall Situations and Common Prosperity" (let some people and areas get wealthy earlier and to achieve common prosperity later; allow eastern China to develop first and then help the west to develop), the central government, in its effort to spread reform dividends to poor people, paired up more developed eastern regions with less developed western regions so that the former could provide resources (manpower, supplies and money) to help grow their western counterparts. Currently, 18 developed provinces in the east are coordinating with 10 western counterparts (Tibet and three prefectures in southern Xinjiang are covered by special support policy as one poor contiguous area). A total of 29 administrative areas (provinces, autonomous regions, and municipalities) are involved in such a coordinated program for poverty alleviation, and a work system featuring government aid, corporate cooperation, social assistance and talent support was established. Provincially, 15 provinces have paired up developed cities and counties with less developed ones within the province.

According to statistics, in 2013, RMB1.2 billion of financial aid fund flowed from eastern provinces to western ones, RMB560.8 billion of investment between businesses were agreed upon, with RMB340 billion actually realized, number of mutual visits and personnel exchanges totaled 4,556 and 1,489 respectively, among which, 341 were officer exchanges, and 1,148 were talent exchanges; 488 training sessions were held and 36,000 persons were trained; 212, 000 workers were shipped elsewhere to find jobs, and RMB3.59 billion of service income were grossed.

3). The armed forces and police’s participation in poverty alleviation. The military and armed police forces are important actors in China's poverty alleviation efforts and troops around China are member entities of local leading group of poverty alleviation and development. Following the development-oriented poverty alleviation program of the state and the localities where they are stationed, the military and armed police forces, giving full play to their particular advantages, have taken the initiative in participating in local anti-poverty endeavors to meet expectations of local people and complement local efforts to end poverty. The military and armed police forces are paired up with 63 poor counties (40 key counties), 547 poor villages and 2,856 poor villages. Their primary job is to promote integrated village development, support rural and agricultural infrastructure construction, donate money to poor students, reduce poverty through technology and health-care, and offer disaster relief to affected poor areas.

In the new historical period, we should make best use of the three frameworks, make the program of poverty alleviation by society more targeted and effective and achieve breakthrough in the following fields:

1). Advocate private sector's participation in poverty alleviation. Private sector has developed fast since China opened itself to the world. Now there are 13.2 million private enterprises and 45.64 million self-employed workers. The non-public sector provides 80% of existing jobs and 90% of new jobs, and contributes over 60% to GDP and 50% to tax revenues. In recent years, many businesses have participated in poverty alleviation in various forms, and some have gained encouraging results. The private sector is not only a major power house of economy but also a promising driving force of poverty alleviation. Private enterprises enjoy huge potential for their advantages in capital, technology, market and management. Therefore, we should stress corporate social responsibility, stimulate market vitality, and encourage private enterprises to invest in and donate to poor areas as well as train and recruit local people through such projects as resource development, industry cultivation, market expansion and village-business shared progress.

2. Guide social organization's participation in poverty alleviation. Since reform and opening-up, especially in recent years, social organizations in China have sprung up rapidly. In 2013, registered social organizations totaled over 500,000. According to NGO Research Institute, Tsinghua University, among all social organizations, those dedicated to poverty alleviation account for 18.8%. And among social organizations working in rural areas, 53% serve the cause to end poverty. Many social organizations have been actively involved in pro-poor activities. At central level, social organizations have introduced programs such as "Project Hope", "Guangcai (Glory) Program", "Culture-based poverty alleviation", "Project Happiness", "Spring Buds Program", "Mother Cellar", "Care Package" and "Volunteer Action Plan for Poverty Alleviation", all well-accepted by people living in poor central and western regions. The government should, therefore, enhance guidance, build platform, improve policy, and provide service to encourage participation of social organizations in resource mobilization and allocation in order to build up strength of poverty alleviation by society.

3. Engage citizens to participate in poverty alleviation. More and more citizens are willing to play their role in poverty alleviation. According to preliminary statistics, in 2012, over 29 million people volunteered in public-benefit activities. Individual participation of citizens in poverty alleviation is of great significance for advocating socialist core values, resolving conflicts and increasing social harmony. Our next priority in this regard is to open up channels for social exchanges and assistance, guide mainland citizens, Hong Kong, Macau and Taiwan compatriots and overseas Chinese to participate in poverty alleviation by donations, volunteering, pairing and public-benefit consumption.

Generally, China is well-equipped to mobilize social forces to participate in poverty alleviation. However, many difficulties and problems still exist.

First, amount of social inputs in poverty alleviation is inconsistent with level of economic progress and private wealth. China is the world's second largest economy, with personal savings rate as high as 52%, twice the world's average (25%), and with RMB40, 000 per capita deposits. Thus, a total of RMB81.7 billion (0.17% of GDP) donations in 2011 seem inappropriate in such context.

Second, social participation is not broad-based enough judging by sources of donation. Over 80% of donors are enterprises, government and public institutions, and social groups. Individual donations account for less than 20%, a stark contrast with 75% in the US.

Third, credible service organization and service platform are absent. Some good Samaritans can't find a way to donate or help. Yet many non-public enterprises, social organizations and individual volunteers offer their help independently through pro-poor activities that government finds hard to track or monitor how the donations are handed out.

In general, China has built a solid foundation for widely engaging different social actors in poverty alleviation efforts. For that reason, since this year, to further implement requirements of "innovating social participation mechanism" specified in Circular No.25, 15 departments including LGOP and CPC's Organization Department issued Implementation Plan for Poverty Alleviation through Social Participation Innovation Mechanism, to make pair-up and east-west coordination programs more detailed and specific, and more targeted and effective, and to encourage participation of private sector, social organizations and individuals in poverty alleviation by providing guidance, building platforms, creating atmosphere and supervising service.

IV. Background on the Set-up of China Poverty Alleviation Day

Since reform and opening-up, over 600 million people have overcome poverty. However, due to historical, natural and social reasons, poverty is still severe. According to China's RMB2,300 (rural per capita income) poverty line (in 2010 constant prices, about $1 a day), in the end of 2013, there were 82.49 million poor rural population; and with a reference to theinternational poverty standard, there were over 200 million rural people still trapped in poverty. We are just 7 years away from reaching the goal of building a Xiaokang society in all respects by 2020. Yet the task of poverty alleviation is still daunting, requiring all-out efforts from every stakeholder.

The new leadership attaches great importance to development-oriented poverty alleviation. In the 2nd plenary session of 18th CPC Central Committee, Xi emphasized that, "whether we can build a Xiaokang society as scheduled largely depends on how good we are at reducing poverty. We should encourage social participation to ensure the goal of "Two Worries-Free and Three Services-Guaranteed" is met on schedule. When he was inspecting poverty alleviation programs in Fuping county, Hebei province, Xi indicated that, "the most difficult and cumbersome task of building a Xiaokang society in all respects lies in rural areas, especially the poorer ones. Xiaokang society excluding rural areas, especially poor rural areas is no Xiaokang society at all. We should advocate China's tradition of helping the poor and align contributions of all stakeholders to form synergy for poverty alleviation".

Development-oriented poverty alleviation is an important issue because it matters to China’s political direction, fundamental system and development path. Establishing a China Poverty Alleviation Day is both an action to follow Xi’s requirement and a measure to innovate social participation mechanism. It helps reinforce responsibility of governments, attract attention of the public, mobilize social participation, advocate mutual help, improve socialist core value system, showcase China-style poverty alleviation approaches, achievements and experiences, and increase China's influence and soft power in the field of international poverty alleviation.

In real terms, a broad consensus on setting up a China Poverty Alleviation Day has been reached already. Guangdong is the first to establish "Help-the-Poor Day", and quite successfully. Inner Mongolia, Zhejiang, Fujian, Hubei, Sichuan, Chongqing and Guizhou, one after another, required the state to set up a China Poverty Alleviation Day. During this year's National People’s Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC) sessions, delegates and members put forward six proposals to establish "National Help-the-Poor Day" respectively, and many scholars also made such appeal.

Therefore, after soliciting opinions of stakeholders and getting consensus at Leading Group of Poverty Alleviation and Development (LG) 2nd Plenary Meeting, LGOP applied to the State Council for the establishment of this special day.

On August 1st 2014, the State Council approved (Circular issued by the State Council [2014] No.97) the set-up of an annual China Poverty Alleviation Day on October 17th and commissioned LGOP to consult relevant departments and institutions for observance activities.

The day October 17th coincides with the UN’s International Day for the Eradication of Poverty. Through resolution 47/196 adopted on December 22nd 1992, the UN General Assembly declared October 17th as the International Day for the Eradication of Poverty with the purpose to nurture poverty alleviation awareness of people all around the world, especially the developing part of the world. The resolution invited all states to devote the Day to presenting and promoting, as appropriate in the national context, concrete activities with regard to the eradication of poverty and destitution. The resolution further invites intergovernmental and non-governmental organizations to assist States, at their request, in organizing national activities for the observance of the Day. China’s move to set up the China Poverty Alleviation Day is also responding to the UN’s resolution.

V. Activity Arrangement for China Poverty Alleviation Day

Set-up of China Poverty Alleviation Day demonstrates government's concern for poor population and poverty alleviation. The Day will play a key role in engaging all stakeholders, advocating poverty-fighting actions and fostering socialist core values. The objectives of the Day is to call on the public to show concern for the poor and pro-poor programs, to publicize good actions of role models, encourage wider participation, and cultivate a positive atmosphere.

(1) Activity Arrangement

This year marks the first ever China Poverty Alleviation Day, so it is crucial to have a good start. Considering the tight schedule and the heavy task, we will initiate, to the best of our ability, the following activities.

1. China Poverty Alleviation Day Initiation Ceremony and National Teleconference on Poverty Alleviation by Society will be held together. On the morning of October 17th, National Teleconference on Poverty Alleviation by Society will be held by the State Council to summarize best practices, commend role models, arrange work for the next stage and initiate the first activity for China Poverty Alleviation Day.

2. Hold a seminar on poverty alleviation by society. After the teleconference, State Council leaders will chair a seminar that brings together 20 local representatives, award-winners and entrepreneurs to discuss their observance of engagement in poverty alleviation and policy measures to deepen social participation.

3. Hold "10·17 Forum". The first ever “10·17 Forum” will be held in Beijing, after being jointly initiated by Peking University, Tsinghua University, Institute of Geographic Sciences and Natural Resources Research of Chinese Academy of Sciences(CAS), Institute of Sociology of Chinese Academy of Social Sciences (CASS), Rural Economy Research Department of Development Research Center of the State Council, China Poverty Alleviation and Development Center (CPADC), and International Poverty Reduction Center in China (IPRCC). The objectives of the Forum is to study China’s poverty alleviation theories, publicize China's achievements and best practices, promote international exchanges on poverty alleviation, and create a enabling social environment for participation in poverty alleviation. The theme of this year’s forum is “Shared Prosperity through Poverty Alleviation”.

4. Mobilize central and national agencies to take the lead. Working committees of central and national departments and LGOP will issue circulars to encourage participation of central and national government employees.

5. Mobilize the military and armed police force to participate. This part will be coordinated and organized by General Political Department.

6. Mobilize students to participate. Ministry of Education and other department will be responsible for organizing schools and students to participate.

7. Mobilize youngsters to participate. This part will be coordinated and led by the Communist Youth League.

8. Mobilize state-owned enterprises to participate. State-owned Assets Supervision and Administration Commission will lead state-owned enterprises to support their poor pair-ups.

9. Mobilize private enterprises to participate. This part will be coordinated and led by All-China Federation of Industry and Commerce.

10. Promote solar PV for poverty alleviation. National Energy Administration, LGOP and other departments will be responsible for this job.

11. Promote tourism for poverty alleviation. National Tourism Administration, LGOP and other departments will be responsible for this job.

12. Develop E-commerce in poor villages. Ministry of Agriculture, LGOP and other departments will be responsible for this job.

13. Train pacesetters for poverty alleviation in poor villages. This part will be led by LGOP.

14. Draft and send pro-poor public-benefit messages. Ministry of Industry and Information Technology (MIIT) will send SMS messages to subscribers of China Telecom, China Mobile and China Unicom on China Poverty Alleviation Day to raise profile of the Day.

15. Open informant line. LGOP will commission MIIT to open "12317" informant line to receive leads on poor execution of pro-poor policies and use of funds.

(2) Publicity Campaigns

Adopt the slogan "10·17, Awaiting Your Participation" and make best use of traditional and new media to publicize the Day and expand its influence. Publicize China's poverty alleviation accomplishments and best practices, increase understanding on poverty and poverty alleviation endeavors, mobilize social participation, and create a positive atmosphere through reports, broadcasts, commentaries, logo design contests and public-benefit advertisements.

(3) Other Arrangements

1). Establish a coordination mechanism.

Activities on China Poverty Alleviation Day will be directed by the Chinese State Council Leading Group of Poverty Alleviation and Development (LG). China Poverty Alleviation Day Activity Office will be set up for drafting activity plans, coordinating work and solving problems. And LGOP will see to routine work.

Position of Office Director will be assumed by LGOP Director and that of Deputy Director assumed by person-in-charge of poverty alleviation in LGOP deputy chief member entities, departments leading pair-up poverty alleviation and Central Publicity Department, and members of the Office will include heads of other member entities of LGOP and liaison entities for 11 areas.

2. Strengthen institutional building.

Two policy documents will be drafted and issued in the name of the Chinese State Council Leading Group of Poverty Alleviation and Development (LG) or by the Leading Group’s Office (LGOP) after approval of the Group. One document is an instruction on undertaking activities. It will specify purpose, guiding concepts, basic principles, major activities and organizational approaches for observance of China Poverty Alleviation Day, define responsibilities and division of work, and help normalize and standardize activities and ensure smooth running and healthy development of activities from the source. The other document is a regulation on use of funds raised on China Poverty Alleviation Day. It will lay out rules concerning fundraising, fund use, management and supervision, disclosure and announcement, implementation and effectiveness evaluation. Through this document, we aim to give full play to the role of third-parties like social public-benefit organizations, ensure funds are spent on projects most needed by poor regions and poor people, guarantee availability, security and user-friendliness of fund management channels, and make them endurable to scrutiny of the auditors, society and people.