When they gained independence in the late 1940s, Pakistan and China inherited large numbers of impoverished people. While Pakistan had a relatively lower poverty rate, with an estimated 60 percent of the population living in poverty, China, ravaged by world wars and civil conflicts, had a corresponding rate of 80 percent.

In terms of numbers, while Pakistan, with a population of just over 30 million at the time of Independence in 1947, had to lift about 20 million people out of poverty, China, with a population of over half a billion, had the challenge of lifting more than 400 million out of poverty. It was a 20 times bigger task than the one facing Pakistan.

After three-quarters of a century, the latest figures for Pakistan, according to the World Bank’s Poverty & Equity Brief, show that 42.4 percent of the Pakistani population lives below the lower-middle-income poverty line of US$3.65 per day (2017 purchasing power parity). In terms of Pakistan’s national poverty line, the poverty ratio in the country stands at 25.3 percent.

On the other hand, China was able to eradicate poverty by 2020. For the first time in 5,000 years, no one in China lived in poverty. In terms of numbers, the country had lifted about 800 million people out of poverty through its programmes and policies. Given its enormity, this achievement has been termed one of the greatest stories of the 21st century.

While China has lifted nearly 800 million people out of poverty in the last seven decades, Pakistan’s poverty rate remains a pressing concern. Using insights from Chinese premier Xi Jinping’s book Up and Out of Poverty, Dr Muhammad Ali Shaikh analyses key components of China’s strategy and their applicability in the Pakistani context

In this regard, President Xi Jinping’s book, Up and Out of Poverty, provides valuable insights into China’s poverty alleviation strategies, policies and programmes. It is also interesting to take stock of Pakistan’s experiences with poverty alleviation since its inception in 1947 and compare its strategy with the principles adopted in China. This way, we may draw lessons for Pakistan from China’s success in eliminating poverty.

PAKISTAN’S TRAJECTORY

In 1947, Pakistan inherited a predominantly agrarian economy, with a narrow industrial and manufacturing base. This was coupled with a highly underdeveloped human resource base, characterised by high illiteracy and limited access to healthcare. The post-Partition blues, mass migrations to and from India, and continuing political instability hindered poverty alleviation efforts during the country’s initial years of independence.

In the 1950s, initial efforts were made to boost industrialisation, primarily focusing on the import-substitution industry, marking a transition from agriculture to manufacturing. During this decade, Pakistan also entered the phase of foreign aid dependence, receiving US military and economic aid of US$500 million from 1955 to 1958. Unfortunately, this phase still continues, with minimal impact on poverty eradication.

Things changed with Gen Ayub’s government, which focused on economic development in the 1960s amidst a massive inflow of US aid. However, the benefits of this economic growth were primarily confined to a small, affluent class, resulting in significant income disparities. It is no wonder that, during this so-called ‘decade of development’, about half of the population continued to live in poverty, even as the number of millionaires multiplied.    

Then came the 1970s, marked by nationalisation policies and rural development initiatives under Zulfikar Ali Bhutto’s government. Although these policies aimed to reduce poverty, several factors — such as the oil price shock of 1973, three massive floods (1973, 1974 and 1976-77), the failure of cotton crops in 1974-75 and the global recession during 1974-77 — hindered poverty alleviation efforts.

The military coup d’état of July 5, 1977, ushered Pakistan into a new economic era. The country’s involvement in the US-sponsored global ‘jihad’ against the Soviet Union in Afghanistan opened several doors to foreign aid and assistance. Furthermore, denationalisation, deregulation and privatisation policies improved Pakistan’s poverty situation, with figures of those living below the poverty line declining to 29.1 percent in 1986-87.

But this bonanza proved to be short-lived. The dawn of the 1990s, following a decline in international interest in Pakistan during the post-Soviet Union era, brought enormous economic challenges for the country. The problems were further complicated by Pakistan’s nuclear tests on May 28, 1998, which resulted in the imposition of Western economic sanctions. Consequently, poverty could not be addressed meaningfully.

At the beginning of the new century, under Gen Pervez Musharraf’s military rule, poverty rose to 34.5 percent in 2000-01. However, following the events of 9/11 in the US and the subsequent Nato action in Afghanistan, international interest in Pakistan returned, bringing enhanced financial and economic assistance. This improved Pakistan’s economy, with poverty figures dropping to 22.3 percent by 2005-06. 

During the next two decades, targeted programmes — such as the Benazir Income Support Programme and the Ehsaas Programme — were launched to support the poor. However, the projects’ inherent faults and weaknesses, coupled with disasters like Covid-19 and the massive floods of 2010 and 2022, largely impacted poverty eradication. While widespread poverty has persisted in the country since its inception on the one hand, on the other hand, it also has significant regional and gender disparities on the other.

THE CHINESE MODEL

International scholars have outlined the key aspects of the Chinese poverty alleviation strategy as the “5Ds” — determined leadership, a detailed blueprint, development orientation, data-based governance and decentralised delivery. 

The core principle has been to create a “pro-poor market” in which the government, market and society jointly work to enable the poor to contribute to growth, instead of making them dependent on grants and financial assistance, as we have been doing in Pakistan.

President Xi, one of whose hallmarks achievements is his work on economic development and poverty alleviation while serving in the Fujian province from 1988 to 1990, elaborates on this concept in his book in the chapter, ‘How Can a Weak Hatchling Bird Be the First to Fly?’

He writes: “Being at peace with our lot, finding contentment in poverty, waiting for government aid, relying on financial grants, requiring poverty allowances, blaming everyone but ourselves — all of these concepts must be swept out with the trash.”

Highlighting the importance of changing mindsets, he states: “The weak hatchling bird can be the first to fly and the poorest can be the first to become rich. But to be the first to take flight or to become rich, we must first have such a concept in mind.”

One of the most crucial tools adopted by China in its war against poverty was precision targeting poverty-stricken families through surveys and other scientific means of data collection. Its poverty database mapped each household’s needs, strengths and expertise, and developed separate policies for each family, to pull them out of poverty.

It was not a one-size-fits-all solution. These tailor-made policies were then implemented through a dedicated and disciplined corps of public officials and Communist Party of China (CPC) cadres, who assisted and monitored each family’s progress.

It is also pertinent to state here that, despite these efforts, about 24 million people with physical disabilities in China still receive living and nursing subsidies, and another 20 million receive other forms of support, as part of the social safety net.

Still, the state’s priority is to enable each of them to play a productive role in economic growth through their skill development, land allocation and other means, instead of making them dependent on monetary dole-outs and grants.

EDUCATION AND TECHNICAL TRAINING

One of the secrets behind China’s eradication of poverty is ensuring that its entire population receives a high-quality, well-rounded education, focused on science, mathematics and the Chinese language. Evidence worldwide has established that education is one of the most crucial factors in combatting poverty. China prioritised this aspect from the beginning and, it may astonish many that, in 2020, China spent $813 billion on education, compared to $178 billion on its defence that year.

Another important feature of China’s education system is the built-in mechanism that sorts students into academic, technical and vocational streams, based on their aptitude and intellectual capabilities.

After completing nine years of compulsory education, the students are divided and directed toward either senior secondary or technical and vocational schools, where they master their selected skills, preparing them for the job market. This highly skilled technical and vocational workforce has been instrumental in China’s rapid industrialisation, which has, in turn, played a key role in eradicating poverty.

President Xi highlights this relationship between the economy, education and science and technology in his book: “Educational advancement, technological progress and economic revitalisation make up a complementary, sequential and unified process, the foundation of which lies in education.” He quotes an ancient Chinese saying, “Respecting teachers and encouraging learning are the great foundations of a nation.”

Like Pakistan today, China too faced severe financial constraints regarding its spending on education in the earlier stages. Xi holds: “We can’t fail to develop education here just because our region is poor. Nor can we sit there and wait until the day we strike it rich to discuss education issues.”

The book is also peppered with ancient Chinese wisdom. “It takes ten years to grow trees, but a hundred years to cultivate people,” quotes Xi, imploring that China could not waste time waiting for the day when it would be rich enough to spend more on education.

THE TOWNSHIP AND VILLAGE ENTERPRISES OR TVEs

One of China’s most critical measures to reduce poverty was through its Township and Village Enterprises or TVEs. It may be highlighted here that the rural community in China typically consisted of settlements denoted as townships and villages. An average village usually consisted of a few hundred households, while a township consisted of several villages, bringing the number to thousands of households.

Under the TVE scheme, the communities invested their common assets and capital in a business enterprise at the village and township level, which was managed by the residents.

For instance, if a village was found suitable for shrimp farming, the community would collaboratively establish an enterprise, with various members getting involved in different tasks, from rearing shrimps to peeling them on payment of a certain amount, thereby creating an additional source of income. Most TVEs ventured into transportation, catering, textiles, construction, printing and other labour-intensive industries.

The profits generated by TVEs increased household income and produced resources for community schools, roads, healthcare, and pensions for the disabled, elderly and impoverished.

An outstanding feature of this scheme was decentralisation and its emphasis on empowering local communities to decide on their economic and development issues. This initiative also significantly contributed to China’s subsequent rapid industrialisation and regional specialisations in various fields, eradicating poverty.    

LEADERSHIP

Perhaps the most critical aspect of China’s remarkable success story has been its leadership, from the community to the national level, which worked consistently and in cohesion to achieve the set objectives. Underscoring the importance of leadership, Xi writes, “The people need leadership. Without leadership, we can neither increase nor sustain the people’s enthusiasm.”

He describes a leader’s essential hallmarks: “To lead, we must have credibility; there can be no real leadership without credibility. Where does a leader’s credibility come from? It does not come from relying on higher authorities, exerting power, or using gimmicks. It is only built gradually, by working for the people wholeheartedly, with dedication and perseverance.” A tall order indeed in the context of Pakistan.

Another critical factor contributing to China’s rapid development, progress and eradication of poverty is its strict policy against corruption, particularly concerning leaders and public officials. “From birth to death, every stage of life presents opportunities to cut deals or engage in unhealthy tendencies,” writes Xi. If a public leader falls prey to such temptation, Xi and Chinese society believe the consequences should be more severe for them for betraying the public trust.

LESSONS FOR PAKISTAN

So, what are Pakistan’s key takeaways from China’s remarkable success in poverty eradication?

First, scientific mechanisms and methodologies should target poverty-stricken households and families and develop individual economic development plans.

Second, local governments and institutions should be fully empowered to devise strategies for their economic improvement in a decentralised manner.

Third, we should invest in high-quality education, emphasising technical and vocational training.

Fourth, an integrated development approach should be adopted, rather than standalone welfare schemes for the sake of political gains and publicity.

Fifth, and most importantly, national leadership should be committed to development and it should not work like a family-run company, engaging in corruption and bribery.

The writer is a development professional
and a former vice-chancellor. He can be
reached at drshaikhma@gmail.com

Published in Dawn, EOS, May 18th, 2025