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China expects to meet poverty alleviation goal, sustainability the next test By Reuters

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© Reuters. Man looks on at a balcony of a residential building at the Chengbei Ganen Community in Yuexi

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By Yew Lun Tian

LIANGSHAN, China (Reuters) – President Xi Jinping beamed down benevolently from a poster in the new flat of unemployed Jigu Gatie, provided by the Chinese government as part of efforts to tackle poverty nationwide.

The posters urging residents to listen, follow and “be grateful” to China’s ruling Communist Party were common in the homes of the new state housing project visited by Reuters in September during a government-organised trip to the southwestern Sichuan province.

China vowed in 2013 to eradicate extreme rural poverty by the end of this year, and spent 524 billion yuan ($77.17 billion) between 2016 and 2020 to that end, official data showed. China’s economy was hit by the coronavirus pandemic early this year but has since seen a steady recovery.

“Thanks to the party, thanks to the government, thanks to General Secretary Xi,” said Jigu, a member of the generally poor Yi ethnic minority. “I’m very satisfied.”

With over 90 million rural people lifted from extreme poverty over the past seven years, the government says it is on track to achieve its 2020 goal.

But the success could falter if authorities shift priorities after declaring victory on rural poverty, analysts say.

“Once poverty alleviation is no longer a political priority, if funding from the government and state-owned enterprises dries up, many will fall back into poverty,” said Alfred Wu, associate professor at Lee Kuan Yew School of Public Policy in Singapore.

The government has said China will continue anti-poverty policies after 2020 but has yet to make an announcement.

A State Council official said the government was “rushing to come up with transitional policies.”

POLITICAL PRESSURE

Jigu, in his 60s, moved into his new flat in the Liangshan region last year. A message reading “gifted by the Sichuanese party and government” on the chairs and wardrobe of his apartment remind him to be grateful each day.

The Sichuan government has invested 77.5 billion yuan to move 1.36 million villagers into new homes within the province, a policy replicated around China.

Under the scheme in Sichuan, each household in the province pays 2,500 yuan per person to secure a new concrete apartment or house, complete with hot showers and cooking gas – an upgrade from the leaky and windowless shacks many of them came from.

China’s poverty alleviation programmes heavily rely on fiscal funding and civil servants for implementation, analysts say, raising questions about their sustainability.

“With the political pressure of meeting the poverty target no longer hanging over them, and with other pressing needs to pay for social programmes that would benefit the wider community, local governments would be hard-pressed to devote already-tight budgets to the absolute poor post-2020,” said Wang Jun, chief economist at lender Zhongyuan Bank.

HARDSHIP POSTINGS

In addition to funding, the party has encouraged civil servants and party members to “volunteer” to tackle poverty in poor villages.

Some 58,000 civil servants have been mobilised in Sichuan province, with each assigned one household to bring out of destitution.

When the mission is accomplished, every poor villager should subsist above the 2020 national poverty line of around 4,000 yuan ($589) per year, official Dong Jiaqi said on the trip. That is less than half the 10,000 yuan monthly average earned by residents of the capital Beijing.

The number of registered rural poor in China has fallen to 5.51 million in 2020 from 98.99 million in 2012, said Dong.

But the so-called hardship postings can be challenging, with one Liangshan official saying some workers had been killed in car crashes on treacherous mountain roads, and another saying he hadn’t seen his family for a long time.

“Fighting poverty takes up so much of my energy that I haven’t seen my parents in two years,” the second official said.

JOB PROSPECTS

Villagers moved by the government are offered night school classes, taught job skills and matched with jobs in richer regions.

After relocating from village houses in harsh living conditions to housing projects, 500,000 poor people in Sichuan found jobs in farming or in animal rearing, 200,000 were employed outside the province and 100,000 found jobs near their new homes, Sichuan governor Yin Li has said.

But government-funded social enterprises visited by Reuters on the trip showed just how reliant the poor remain on the government.

At a state-owned apple farm in Liangshan, one manager said employees were guaranteed a certain amount of proceeds from the farm for the first three years and secure employment. But he declined to say if the farm was profitable or when it may break even.

Nearby, poor women who sewed ethnic motif on socks at an embroidery workshop were secured steady income thanks to the government which buys “any number of socks they can sew,” said the workshop supervisor.

Jigu is living with his son, who was given a job after relocating, and is making the most of their new circumstances. He said he does not miss having to build a fire to cook or depending on the uncertainties of farming to eat.

“Here, I can eat anything, anytime I want,” he said. “Life is better now.”

($1 = 6.7898 )





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Honda reaches $5 million defective air bag settlement with Arizona By Reuters

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© Reuters. FILE PHOTO: The Honda logo displayed at the 89th Geneva International Motor Show in Geneva

(Reuters) – Arizona reached a $5 million settlement with Honda Motor Co’s (T:) U.S. units Wednesday in a probe into defective Takata air bag systems, state Attorney General Mark Brnovich said.

The settlement follows an $85 million settlement announced in August with nearly all other U.S. states. Arizona said the Honda settlement includes $1.65 million in restitution for state consumers, a $2.13 million repair incentive program, $750,000 for consumer outreach and a $500,000 payment to Arizona.

Faulty air bag inflators have been tied to at least 15 U.S. deaths in Honda vehicles.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Mester says policymakers need to watch for financial stability risks By Reuters

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© Reuters. Cleveland Federal Reserve Bank President Loretta Mester speaks in London

(Reuters) – The Federal Reserve’s new approach to monetary policy should help the central bank influence the economy at a time when interest rates and inflation are low, but policymakers need to keep an eye out for financial stability risks, Cleveland Fed Bank President Loretta Mester said Wednesday.

The framework clarifies that strong employment on its own is not a concern to the Fed unless there are strong inflationary pressures or financial stability risks, Mester said. But policymakers also need to remember that low rates could encourage “higher levels of borrowing and financial leverage, increased valuation pressures, and search-for-yield behavior,” she said.

“While monetary policy that leads to a stable macroeconomy encourages financial stability, it is also possible that in an environment with low neutral rates, a persistently accommodative monetary policy could, in some cases, increase the vulnerabilities of the financial system,” Mester said in remarks prepared for a virtual event on monetary policy.

The relationship between low rates and stability needs to be studied, she said. “How best to approach the nexus between monetary policy and financial stability in a low-interest-rate world deserves more consideration,” Mester said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Brainard says more fiscal, monetary support needed By Reuters

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© Reuters. Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge

By Dan Burns and Ann Saphir

(Reuters) – Despite a “heartening” early bounceback from the initial hit to the U.S. economy delivered by the COVID-19 pandemic, the recovery has been uneven and will require continued support from the Federal Reserve and fiscal authorities to ensure it becomes broadbased and sustainable, Federal Reserve Governor Lael Brainard said on Wednesday.

Brainard, in remarks to an online conference of the Society of Professional Economists, said the economy’s overall gains since the worst of the crisis mask big disparities among sectors and among Americans that could hold back the overall recovery.

The Fed, she said, is committed to providing “sustained accommodation” to the economy for as long as needed. At the same time, the biggest risk to her outlook for recovery is that fiscal support from the federal government will be withdrawn too soon.

“This strong support from monetary policy – if combined with additional targeted fiscal support – can turn a K-shaped recovery into a broad-based and inclusive recovery that delivers better outcomes overall,” Brainard said.

Brainard’s reference to a “K-shaped” recovery nods to an increasingly popular description of the rebound from the spring’s low point in activity, under which many households and small businesses have seen little improvement.

“Premature withdrawal of fiscal support would risk allowing recessionary dynamics to become entrenched, holding back employment and spending, increasing scarring from extended unemployment spells, leading more businesses to shutter, and ultimately harming productive capacity,” Brainard said.

Among the more troubling developments from the recession caused by the pandemic, she said, are that job losses have occurred disproportionately among minority populations and, more recently, that prime-age working women have left the labor force.

“If not soon reversed, the decline in the participation rate for prime-age women could have longer-term implications for household incomes and potential growth,” she said.

Brainard signaled that the Fed will not only keep rates at their current near-zero level for years, but will, even after liftoff, raise them only gradually to keep rates at levels designed to stimulate economic growth.

The central bank will “have the opportunity” in the months ahead to clarify how the Fed’s asset purchase program could best work in combination with forward guidance on rates, she said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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