Chen and Wang investigate recent trends in poverty and Economic growth contributed significantly to poverty
inequality in China, decomposing data on poverty reduction, but rising inequality worsened both rural and
reduction to see who has benefited most from China's urban income distributions-except during the Asian
economic growth. They find that, by several measures, crisis when the distribution remained relatively stable.
poverty declined significantly in the 1990s, across a wide The poor benefited far less than the rich from
range of poverty lines, except that a slight slowdown in economic growth. Income growth reached or exceeded
China's export and economic growth in 1997-99 might the average growth rate only for the richest 20 percent of
have hurt the poor. There was a slight increase in the the population.
poverty headcount between 1997 and 1999, using lower Chen and Wang then examine the relationship
poverty lines, and a worsening of the poverty gap index. between human capital, growth, and poverty. They find
Average per capita consumption declined for farmers, that the accumulation of human capital had slowed and
especially those living in poor regions such as Gans, that there is a huge regional disparity in human capital
Heilongjiang, Shanxi, and Xinjiang. It is unclear whether stock. And the distribution of education is becoming
this decline was attributable to Asia's economic crisis. increasingly skewed. China must address this problem if
it is to succeed in attacking poverty and inequality.