The Pattern of Growth and Poverty Reduction in China

China has seen a huge reduction in the
incidence of extreme poverty since the economic reforms that
started in the late 1970s. Yet, the growth process has been
highly uneven across sectors and regions. The paper tests
whether the pattern of China´s growth mattered to poverty
reduction using a new provincial panel data set constructed
for this purpose. The econometric tests support the view
that the primary sector (mainly agriculture) has been the
main driving force in poverty reduction over the period
since 1980. It was the sectoral unevenness in the growth
process, rather than its geographic unevenness, that
handicapped poverty reduction. Yes, China has had great
success in reducing poverty through economic growth, but
this happened despite the unevenness in its sectoral pattern
of growth. The idea of a trade-off between these sectors in
terms of overall progress against poverty in China turns out
to be a moot point, given how little evidence there is of
any poverty impact of non-primary sector growth, controlling
for primary-sector growth. While the non-primary sectors
were key drivers of aggregate growth, it was the primary
sector that did the heavy lifting against poverty.