First, poverty incidence has dropped significantly in the period of 1990 to 1999.
Using a lower poverty line of $0.75 per day (little higher than the official poverty
line), the headcount index decreased from 17.1 percent to 8.9 percent. Using a World
Bank international poverty line ($1 per day), the headcount index decreased from 31.5
percent to 17.4 percent. This means, 14 million of people were lifted out of poverty.
* Second, between 1990 and 1993, poverty changes were insignificant if using lower
poverty lines, and more significant using higher poverty lines. This is consistent with
the fact there is a significant increase in inequality during the same period (see next
section on gini index).
* Third, poverty reduction was more significant in the period from 1993-96, especially
for rural poverty. The most important causes of this significant reduction is that the
Chinese government increased the purchasing price of agriculture products by 75 %
especially grain. The official purchasing prices of grain has been doubled during 1993
to 1996. From another study (The World Bank 1997) we know that the share of grain
income decline from the poor to rich so the increase of grain price has benefited the