Standard of Living

China is still classified as a “developing” country. Its GDP per capita (PPP) is USD 5,300 (2007 estimate), well below its “developed” Asian neighbors Japan (USD 33,600), Singapore (USD 49,700), Taiwan (USD 30,100), and South Korea (USD 24,800). For purposes of comparison, China’s PPP lies between the Philippines (USD 3,400) and Thailand (USD 7,900). Interestingly, one of the highest PPP values in Asia is that of Hong Kong (USD 42,000), which is a Chinese Special Administrative Area. Macao, the other Chinese Special Administrative Area, also has a very high value (USD 28,400).

Another instructive indicator of the general standard of living within a country is the Human Development Index (HDI). This number gives an average for indices measuring life expectancy, literacy, school enrollment, and GDP per capita (PPP). Countries with an index value of 0.800 or above are considered to be of “high” human development. (The United States has a value of 0.951.) As of 2005, China has an HDI score of 0.777; in 1975, this value was 0.530, and in 1990, it was 0.634.

One of the problems that China is trying to address is the standard-of-living disparities within the country, most notably in terms of its urban versus rural and coastal versus inland populations. If one looks at the HDI values for China’s provinces, municipalities, and autonomous regions, the highest values (above 0.81) are for coastal regions (Shanghai, Tianjin, Guangdong, Liaoning, Zhejiang, and Jiangsu), with the exception of Beijing. The lowest HDI values (below 0.70) form an inland, primarily rural belt that surrounds Sichuan Province to the west, north, and south (Tibet, Guizhou, Yunnan, Qinghai, Gansu).

The heavy investment in Chongqing municipality and the construction of the Three Gorges Dam have been strongly motivated by a desire to more fully integrate these areas into the Chinese economy and raise their standard of living.

Poverty rates in China vary according to the source of data. Data from the World Bank show a dramatic drop in the percentage of the population living below the poverty line, from 53% in 1981 to 8% in 2001.

Both urban and rural poverty rates fell during this period, but the rural rate accounted for most of the overall drop. A large percentage of the rural poverty decline came in the early 1980s, when economic reforms dramatically addressed some of the agricultural policies of the earlier era that contributed to rural poverty.