China to Raise Poverty Threshold

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By JOSH CHIN

BEIJING—The number of rural residents in China recognized as poor is set to quadruple thanks to a planned adjustment in the country's oft-maligned definition of poverty, though the number will still likely fall short of independent estimates.

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A 92-year-old woman sorts corn for sale outside her home near Harbin, China.

China's leadership has decided to raise the poverty threshold to 2,300 yuan ($361) annual net income, a 92% increase from the standard set in 2009, the state-run Xinhua news agency reported Tuesday.

Under the new standard, announced at a national meeting on poverty alleviation held in Beijing, roughly 100 million rural residents will be recognized as officially poor and become eligible for antipoverty subsidies, Xinhua said. That makes up roughly 7.7% of China's population of about 1.3 billion people, though many more would fall below the poverty lines set by the United Nations.

The population of rural poor stood at just under 27 million at the end of 2010, down from 94 million in the year 2000, according to a government white paper published earlier this month.

China's definition of poverty has long been controversial, in particular because the government has often used its record of poverty reduction as a defense against critics of its human-rights record. China argues that access to basic human necessities like food, water and shelter are the most fundamental human rights and should therefore take precedence over others.

By setting the poverty threshold low, some analysts have said, China's leaders deliberately inflate their success in securing those rights for the nation's poor.

But with inflation hovering well above 5% for most of the year and concerns over the country's wealth gap growing, Beijing has lately been pushing for a more balanced form of economic growth.

"The current trend of [a] widening rich-poor gap will be reversed," China President Hu Jintao said at Tuesday's meeting, according to Xinhua.

The new threshold brings China's official estimates of poverty closer to those floated elsewhere.

In a report delivered earlier this year, Lu Mai, head of the state-sponsored China Development Research Foundation, said that redefining the poverty line as living on $1 or less per day would put China's total poor population at around 150 million. If the U.N.'s current poverty standard of $1.25 or less a day were used, a 2009 World Bank report found, then 254 million Chinese people, or roughly 19% of the population, would have been considered to be living in extreme poverty in 2005.

By comparison, the percentage of the U.S. population considered to be living in poverty—defined by the Census Bureau as a yearly income of $22,314 for a family of four, or $61 a day—was just over 15% in 2010.

Mr. Hu said on Tuesday that the government's goal was for income growth among farmers in poverty-stricken regions to be higher than the national average by the start of the next decade. "Public services for them will also be near the national level," Xinhua quoted him as saying.

The state of public services in China's rural areas—health care in particular—has become a major concern as China continues to urbanize. The country has spent hundreds of millions of dollars on a health-insurance program for rural residents, but officials admit the program provides at best basic coverage. Fear getting seriously ill and being stuck with high hospital bills leads many poor Chinese families to sock away a significant part of their already meager incomes.

Online reactions to the move were mixed, with some applauding the government's focus on poverty but many more arguing the new standards were still too low.

"Our country already has the world's second-largest GDP, so I think we should be using the international standard for the poverty line," commented one user of the popular Sina Weibo microblogging service writing under the handle Zizhu Choushui. "What is this 2,000-plus yuan figure based on?"

Write to Josh Chin at josh.chin@wsj.com