The continuous high economic growth is the basis of poverty reduction. The
average per capita growth rate of GDP of China is 8.1% in the period of 1978-2002 (see table 1),
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which is the period lasting for the longest time with the highest growth rate of GDP per capita and
the largest population who benefit from it. This corresponds to doubling per capita GDP every 8.6
years, 5.4 times of global GDP per capita growth rate in the same period (1.5%). According to the
estimation made by the World Bank, it took Britain 58 years to double its per capita income
(1780-1838), America 47 years (1839-1886), Japan 34 years (1885-1919), South Korea 11 years
(1966-1977). In China, the annual growth rate of rural population’s consumption level (the
majority of China’s population) is 5.6%; the annual growth rate of per capita net income of
farmers is 7.2%, corresponding to doubling their per capita income every 9.7 years (see table 1),
which is the major reason leading to China’s great poverty reduction in rural areas. In 1978 nearly
100% peasant household whose per capita net income was below 500 yuan; in 1985 the
percentage was 77.7%; in 1990 it was 35%; and in 2001 only 2.5%. In 1985 the percentage of
peasant households whose per capita net income was less than 1000 yuan is 97.69%, while in
2001 the ratio has been down to only 13.22% (see table 5), which shows that the extremely poor
and the poor have been sharply decreased.