During the early 1980s China's major poverty reduction strategy scheme focused on sending grain, clothes, and money directly to poor people. The disadvantage was obvious: once people ceased receiving relief they became destitute again. The Chinese government realized that this strategy would not resolve the problem. Since 1986, in an attempt to improve indigent laborers' skills while maintaining a reduction in poverty, the Chinese government began annually allocating 14.4 billion yuan (US$1.9 billion) toward poverty reduction research.

Liu Fuhe, department chief of Policy and Regulations Department of the State Council Leading Group Office of Poverty Alleviation and Development, said that China now has two poverty reduction strategies. The first allocates funds to poor people directly. The second investing funds in training programs that help people improve their ability to make money. Both complement each other and guarantee significant poverty reduction. At the end of 2006, the number of Chinese indigents decreased to 21 million; the percentage of China's destitute population has decreased from 30.7 percent to 2.3 percent.

"Besides natural resources and human resources, infrastructure development such as roads, electric power, and water conservancy facilities, are also very important," said Liu Fuhe.

China has built many infrastructure projects in the country's middle and western areas since the early 1990s. Additionally, the Chinese government has allocated 21.6 billion yuan (US$2.85 billion) toward medical infrastructure development in poverty-stricken areas.

Although China has made great gains toward poverty reduction, the country still faces many additional challenges in the western areas, where more than 60 percent of China's poor people reside. Some areas located in China's southwest and northwest, the environmental conditions are terrible for humans. Some areas are even not suitable for human life. Moreover, many of China's western area citizens are not well educated. Liu Fuhe said, "The Chinese government has moved millions of people living in dreadful environments to other areas in order to solve the poverty problem." The Chinese government allocated 3 billion yuan (US$396.45 million) to China's middle and western areas, where people earn less than anywhere else in the country.

According to the State Council Leading Group Office of Poverty Alleviation and Development, 80 percent of China's poverty-stricken people are concentrated in 148 thousand poverty-stricken villages around the country. Currently the government is focusing poverty alleviation projects on these areas.

In addition, the State Council Leading Group Office of Poverty Alleviation and Development is cooperating with local vocational schools. They are training farmers and rural laborers new skills so that they may move to cities. Last year, China allocated more than 700 million yuan (US$92.5 million) in training projects designed to assist young rural laborers to acquire skills for non-farming jobs.

"China's poverty reduction process will accelerate during the 11th Five Year Development Plan period, and our goal is to help 5 million poverty-stricken laborers achieve prosperity by the end of the 11th Five Year Development Plan period," said Liu Fuhe.

(China Development Gateway by Wang Sining, July 31, 2007)