A CHINESE APPROACH TO BEATING POVERTY

By Dietrich Fischer and - - Reprint | | Print |

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NEW YORK, Jul 26 2005 (IPS) - Given the recent G-8 summit\’s focus on reducing poverty in Africa, it is worth calling attention to a successful anti-poverty programme in China, write Fred Dubee, a long-time advisor to the UN Global Compact and a graduate of the European University Centre, for Peace Studies (EPU) in Stadtschlaining, Austria, and Dietrich Fischer, Academic Director of EPU. Both are members of TRANSCEND, a peace and development network. In 1994, the China Society for the Promotion of the Guangcai (glory) Programme was founded by a group of ten concerned, dedicated, and brilliant young Chinese entrepreneurs, the authors write in this article. In contrast to other poverty relief projects, the Guangcai Programme encourages social responsibility among private entrepreneurs. It facilitates investment in sustainable development projects in China\’s less-developed areas, thus bringing to disadvantaged groups the fruits of economic development. When Deng Xiaoping changed the laws in China in 1994 to encourage private enterprise, they knew they would become very successful, because they had good business plans, and opportunities abounded. But they also realized that if they did not share their success, they would arouse the envy of the public and local officials. For this reason, and because they wanted to help their fellow citizens, they set out to create a multitude of small and medium enterprises to help generate jobs and income, especially in the poorer regions of China.

In 1994, the China Society for the Promotion of the Guangcai (glory) Programme was founded by a group of ten concerned, dedicated, and brilliant young Chinese entrepreneurs. Some had studied both in China and in the West, in areas from physics, chemistry, or engineering to agriculture, business, etc. When in the same year Deng Xiaoping changed the law to encourage private enterprise, these entrepreneurs knew they would become very successful because they had good business plans and opportunities abounded. But they also realized that if they did not share their success, they would arouse the envy of the public and local officials. For this reason, and because they wanted to help their fellow citizens, they set out to create a multitude of small and medium enterprises to help generate jobs and income, especially in the poorer regions of China. Ten years later, 16,500 entrepreneurs from the Chinese mainland, Taiwan, Hong Kong, and Macao are participants in the Guangcai Programme, and together they have helped create over 10,000 new companies in the poorest areas of China. The total investment in these companies today is around USD 6.3 billion, and so far they provide employment and a better life for about 5 million Chinese. In 2000, the Chinese government vowed to improve within a decade the lives of approximately 28 million rural people living in extreme poverty. In contrast to other poverty relief projects, the Guangcai Programme encourages social responsibility among private entrepreneurs. It facilitates investment in sustainable development projects in China’s less-developed areas, thus bringing to disadvantaged groups the fruits of economic development. Some projects help people in poverty-stricken rural areas to learn the latest agricultural techniques and expand markets for their products. Others have built factories in remote areas to provide local employment. More important, the programme changes people’s mindset and gives them the confidence that they can improve their lives through hard work. The first project of the Guangcai Programme was a large animal feed plant built in 1994 in a remote autonomous prefecture in Sichuan Province. Apart from anti-poverty efforts in the countryside, the programme also helps urban residents with low incomes by reforming deeply-indebted state-owned enterprises, thus saving jobs and re-employing laid-off workers. A private investment of USD 35 million in five state-owned enterprises in Chongqing provided jobs for more than 20,000 laid-off employees. Another enterprise that participates in the Guangcai Programme employs over one thousand people producing aromatic soap made with special berries. In another venture, a chemist developed a special polymer that absorbs water and slowly releases it. Spread in a dry region of Inner Mongolia, it helps prevent rain water from sinking quickly into the sandy ground and has increased vegetation, allowing more sheep to graze, and their sale has increased rural income. As of 2004, 156 entrepreneurs have won “Guangcai Programme Medals” for their outstanding achievements. One of these is an ingenious scheme devised by Wang Junyao (1966-2004) after he learned at a government seminar that many elderly Chinese suffer from osteoporosis, a softening of the bones that increases the risk of fractures and is caused by calcium deficiency in the diet. Chinese milk consumption at that time was only a few litres per year per person, compared with several hundred litres in the West. There is clearly a demand for more milk, but most Chinese farmers with small plots are too poor to buy a cow. So Wang came up with the idea that farmers could acquire one or more cows and pay over time with half of the income they make from selling milk. Another problem was that only a few rich people could afford refrigerators, which greatly limited the market for milk. In cooperation with an international partner company to produce and package long-life milk that does not require refrigeration, making milk available and affordable to the average Chinese citizen.

By the time of Wang’s early death, his scheme had enabled tens of thousands of Chinese small farmers to keep cows and gain additional income while meeting a nutritional need of the Chinese population. Under Wang, the Junyao Group became one of the first privately-owned Chinese companies to engage in the Global Compact, UN Secretary-General Kofi Annan’s initiative to promote the greater involvement of business in creatively working to meet the needs of the disadvantaged and requirements of future generations. A case study on the Junyao Group project can be found at www.unglobalcompact.org.(END/COPYRIGHT IPS)