‘V3.0’ poverty alleviation model in Qingdao West Coast New Area
By Liu Cheng and Liu Tao
Original, GPIG, 11-30-2017
Through targeted poverty alleviation implemented by the local government, Shi Fajia opened a family hotel to lift himself out of poverty. Meanwhile, he also actively contributed to driving up the income of his fellow villagers by purchasing their dried seafood. / Zangnan Town is developing its industry with a “park + impoverished households” model. The government introduced a modern-agricultural-park project and encourages impoverished households to take part. [Photo by Wang Wenhui]
Located in east China’s Shandong Province, the Qingdao West Coast New Area, established in June 2014 as part of a national-level strategy, is home to a number of major industrial chains. In 2016, with its functional districts flourishing, the area reached a “Shenzhen speed” with its anti-poverty work: All its residents were out of poverty, including 4,278 rural households (7,250 people), 769 urban households (1,271 people), 41 villages, and 5 towns.
Amid these achievements, the new area also came out with a comprehensive poverty alleviation model: It was the first in Shandong to implement asset-based poverty alleviation and to eliminate urban poverty. It also fought poverty by establishing partnerships between functional districts and impoverished towns, by using military–civilian integration, and by introducing critical-illness medical care, among other measures.
Basic security
“We not only need to ensure that people have food to eat and clothes to wear but also that they have adequate education, health services, housing, and transportation,” said Li Chunrong, director of the Qingdao West Coast New Area Poverty Relief Office.
In terms of guaranteed medical treatment, the new area created a new healthcare model: It was the first in Shandong to provide both rural and urban impoverished households with “express wave-through” services, which includes referral of patients to other hospitals for treatment; systematic, categorized medical assistance; and post-hospitalization payment. The establishment of a 20 million-yuan (U.S. $3 million) medical aid fund for rural impoverished people has reduced patients’ critical-illness medical costs by more than 99%; and basic medical insurance for rural poor is fully subsidized.
Zhang Zhong is a provincially registered impoverished person in Wangtai Town. Since January 2016, he has been hospitalized on three occasions with costs totaling more than 160,000 yuan (U.S. $24,000). But, thanks to medical funding and aid, Zhang was able to receive the necessary treatment for only 492 yuan (U.S. $70), at practically no cost.
In terms of education, the new area was one of the first to exempt impoverished students studying in preschools, high schools, and vocational schools from tuition and fees. Meanwhile, it distributed, in stages, 8.42 million yuan (U.S. $1.3 million) of living allowances and grants to 1,052 impoverished students ranging from preschool education to higher education.
In terms of housing and transportation, the new area invested more than 10.47 million yuan (U.S. $1.5 million) to renovate the dilapidated houses of all the impoverished rural households, to build asphalt roads in all impoverished villages, and to run public transportation in 62 villages.
In terms of social security, the new area increased the basic monthly living allowance in both urban and rural areas to 650 yuan (U.S. $100) and 580 yuan (U.S. $85) respectively; allocated 36.09 million yuan (U.S. $5.4 million) to provide the impoverished with a basic subsistence allowance; and purchased universal accident insurance as well as household property insurance for all impoverished households. In addition, 200 disabled impoverished households were moved into residential-care institutions while 924 incapacitated, partially disabled, or severely disabled households received home-based care services.
It should be noted that, while fighting rural poverty, the Qingdao West Coast New Area became a leader in the elimination of overall poverty as well: In 2016, the new area was the first administrative body in Shandong to undertake urban-poverty alleviation, publishing and enacting the Suggestions on Targeted Urban Poverty Alleviation. The new area’s finance department merged minimum-living-allowance policy with poverty alleviation policy, so that registered poor and eligible households receiving minimum living allowances can benefit from both. In 2016, the new area invested 37.95 million yuan (U.S. $5.6 million) and lifted 769 urban impoverished households (1,271 impoverished people) out of poverty.
Full participation
Poverty alleviation should not rely on the government alone. With contributions from government departments, first secretaries, enterprises, charities, as well as distinctive local functional districts and the military, the new area gradually established a system for full participation.
The Qingdao West Coast New Area has 10 functional districts, among which 5 carried out targeted assistance to 5 impoverished towns.
Dongjiakou Circular Economic Zone is responsible for Haiqing Town. It invested 60 million yuan (U.S. $9 million) in Haiqing to build the Dongjiakou Haiqing Industrial Park, which covers a construction area of 13,000 square meters. The park is positioned to develop a headquartered economy, to encourage supporting enterprises of Dongjiakou to register in Haiqing.
“To date, we have 10 enterprises registered here, which alone brought our town a tax revenue increase of 12.6 million yuan (U.S. $2 million) in 2016,” said Zhou Ruibin, chairman of the people’s congress in Haiqing.
Military and civilian integration is another feature of the area: The Office of the North Sea Fleet helped Huangling, a provincially registered impoverished village, establish three projects—a poverty alleviation park, a community service center and an infrastructure construction project—while its comprehensive support base assisted two other villages.
First secretaries have also made remarkable achievements: In 2016, 65 appointed first secretaries implemented 389 poverty alleviation projects, totaling 65 million yuan (U.S. $10 million) and resolving for the impoverished a total of 3,520 actual-problem cases.
Moreover, the new area–owned departments provided assistance to 65 key poverty alleviation villages. All cadres at the section level or above helped provide one-on-one support to impoverished households. Last winter, with financial and material aid amounting to 7.5 million yuan (U.S. $1 million), more than 4,500 cadres visited all impoverished households to help make sure they enjoyed a happy Spring Festival. The cadres helped solve more than 5,800 of the households’ problems, all the while establishing a mechanism for regular visiting.
Sustainability
Simply moving funds and materials from richer locations to impoverished ones is not a sustainable means to alleviate poverty: More efforts should be focused on industrial development and projects.
Owing 80,000 yuan (U.S. $12,000) in debt, 45-year-old Shi Fajia—who hails from Zhaitangdao Village of the area—fell into poverty as a result of illness. In 2016, taking advantage of local tourism resources and help from governments at village, town, and district levels, Shi developed the local market for “fish feasts” (distinctive banquets featuring specially prepared Shandong seafood delicacies) while also opening a family hotel and selling seafood online, all of which helped him generate more than 130,000 yuan (U.S. $20,000) that same year. Earning a steady income of around 50,000 yuan (U.S. $7,500) annually, he successfully climbed out of poverty. Shi also helped lead more villagers to engage in tourism development. Currently, Zhaitangdao is home to six family hotels, whose annual income reached a million yuan (U.S. $150,000). In total, all of the distinctive projects in the district have lifted 316 people out of poverty.
In 2016, Qingdao West Coast New Area allocated 99.08 million yuan (U.S. $15 million) as poverty alleviation funds, invested 37.69 million yuan (U.S. $5.6 million) in poverty alleviation industries, and leveraged 630 million (U.S. $94 million) of social capital. But the matter of how best to use these funds needed careful consideration.
One of the most significant experiments by the new area was that of asset-based poverty alleviation, which turned inactive poverty alleviation funds into high-value assets, ensuring sustainability for poverty alleviation.
From 2016, the new area began to assist 30 provincial-level impoverished villages and 35 municipal-level ones with annual poverty alleviation subsidies of 600,000 yuan (U.S. $90,000) and 500,000 yuan (U.S. $75,000) respectively.
“Some villages do not have adequate resources for industrial development and high-yield projects, or are unable to invest autonomously with significant risk. This leads to unused poverty alleviation funds or even to an investment deficit,” said Zhang Hui, vice director of the Qingdao West Coast New Area Poverty Relief Office.
In order to make optimal use of these funds, the new area came out with Suggestions on the Purchase of Commercial Assets with Poverty Alleviation Funds based on a democratic decision-making process across 65 impoverished villages. Over three years, the new area plans to purchase Qingdao Huangdao Development Group—a state-owned enterprise (SOE)—with high-quality assets totaling more than 100 million yuan (U.S. $15 million): 35.5 million yuan (U.S. $5.3 million) each year, split among the villages. These assets will be leased to Fumin Company, another SOE that guarantees a minimum annual dividend of 8% for 20 years. Village collectives can choose whether to renew their contracts or cash out their assets upon expiry.
Lijiadianzi Village is one of the beneficiaries. “During the most difficult times, we even needed to ‘beg for alms’ to afford the salaries of veteran cadres,” said Li Kailiang, secretary of the village party branch, “with poverty alleviation and self-raised funds, we built 10 mushroom greenhouses in 2015 and leased them to companies, which brought in a total of 120,000 yuan (U.S. $18,000) over three years. Last year, we bought high-quality real estate from Qingdao Huangdao Development Group with 1.4 million yuan (U.S. $210,000) of poverty alleviation funds for 2016–2018, and received a dividend of 120,000 yuan (U.S. $18,000). We will invest all this revenue into the second phase of greenhouse construction and will build 10 more this year. With the help of the Qingdao Science and Technology Council, we will establish a 16.5-acre mushroom production base in the future. We already have a say in the mushroom prices on the (Qingdao) west coast.”
“In the past, village collectives did not have money to solve villagers’ problems, and party branches did not have any prestige. Since poverty alleviation work has driven villagers out of poverty, party branches have now been inciting widespread response,” added Li.
“This model can insure a collective income of 150,000 yuan (U.S. $25,000) across 65 key poverty alleviation villages,” said Li Chunrong. “If the ‘v1.0’ model of poverty alleviation is fund allocation or (to use a metaphor) ‘blood transfusion’, then the ‘v2.0’ model is fund-to-asset conversion or ‘blood production’. Then, the parlaying of the returns from these assets is the ‘v3.0’ model, which denotes the autonomous generation and allocation of one’s own blood. Such is the virtuous cycle of poverty alleviation funding.”
The article was translated by Jin Ling and its original unabridged version was published in Chinese.
By Liu Cheng and Liu Tao
Original, GPIG, 11-30-2017
Through targeted poverty alleviation implemented by the local government, Shi Fajia opened a family hotel to lift himself out of poverty. Meanwhile, he also actively contributed to driving up the income of his fellow villagers by purchasing their dried seafood. / Zangnan Town is developing its industry with a “park + impoverished households” model. The government introduced a modern-agricultural-park project and encourages impoverished households to take part. [Photo by Wang Wenhui]
Located in east China’s Shandong Province, the Qingdao West Coast New Area, established in June 2014 as part of a national-level strategy, is home to a number of major industrial chains. In 2016, with its functional districts flourishing, the area reached a “Shenzhen speed” with its anti-poverty work: All its residents were out of poverty, including 4,278 rural households (7,250 people), 769 urban households (1,271 people), 41 villages, and 5 towns.
Amid these achievements, the new area also came out with a comprehensive poverty alleviation model: It was the first in Shandong to implement asset-based poverty alleviation and to eliminate urban poverty. It also fought poverty by establishing partnerships between functional districts and impoverished towns, by using military–civilian integration, and by introducing critical-illness medical care, among other measures.
Basic security
“We not only need to ensure that people have food to eat and clothes to wear but also that they have adequate education, health services, housing, and transportation,” said Li Chunrong, director of the Qingdao West Coast New Area Poverty Relief Office.
In terms of guaranteed medical treatment, the new area created a new healthcare model: It was the first in Shandong to provide both rural and urban impoverished households with “express wave-through” services, which includes referral of patients to other hospitals for treatment; systematic, categorized medical assistance; and post-hospitalization payment. The establishment of a 20 million-yuan (U.S. $3 million) medical aid fund for rural impoverished people has reduced patients’ critical-illness medical costs by more than 99%; and basic medical insurance for rural poor is fully subsidized.
Zhang Zhong is a provincially registered impoverished person in Wangtai Town. Since January 2016, he has been hospitalized on three occasions with costs totaling more than 160,000 yuan (U.S. $24,000). But, thanks to medical funding and aid, Zhang was able to receive the necessary treatment for only 492 yuan (U.S. $70), at practically no cost.
In terms of education, the new area was one of the first to exempt impoverished students studying in preschools, high schools, and vocational schools from tuition and fees. Meanwhile, it distributed, in stages, 8.42 million yuan (U.S. $1.3 million) of living allowances and grants to 1,052 impoverished students ranging from preschool education to higher education.
In terms of housing and transportation, the new area invested more than 10.47 million yuan (U.S. $1.5 million) to renovate the dilapidated houses of all the impoverished rural households, to build asphalt roads in all impoverished villages, and to run public transportation in 62 villages.
In terms of social security, the new area increased the basic monthly living allowance in both urban and rural areas to 650 yuan (U.S. $100) and 580 yuan (U.S. $85) respectively; allocated 36.09 million yuan (U.S. $5.4 million) to provide the impoverished with a basic subsistence allowance; and purchased universal accident insurance as well as household property insurance for all impoverished households. In addition, 200 disabled impoverished households were moved into residential-care institutions while 924 incapacitated, partially disabled, or severely disabled households received home-based care services.
It should be noted that, while fighting rural poverty, the Qingdao West Coast New Area became a leader in the elimination of overall poverty as well: In 2016, the new area was the first administrative body in Shandong to undertake urban-poverty alleviation, publishing and enacting the Suggestions on Targeted Urban Poverty Alleviation. The new area’s finance department merged minimum-living-allowance policy with poverty alleviation policy, so that registered poor and eligible households receiving minimum living allowances can benefit from both. In 2016, the new area invested 37.95 million yuan (U.S. $5.6 million) and lifted 769 urban impoverished households (1,271 impoverished people) out of poverty.
Full participation
Poverty alleviation should not rely on the government alone. With contributions from government departments, first secretaries, enterprises, charities, as well as distinctive local functional districts and the military, the new area gradually established a system for full participation.
The Qingdao West Coast New Area has 10 functional districts, among which 5 carried out targeted assistance to 5 impoverished towns.
Dongjiakou Circular Economic Zone is responsible for Haiqing Town. It invested 60 million yuan (U.S. $9 million) in Haiqing to build the Dongjiakou Haiqing Industrial Park, which covers a construction area of 13,000 square meters. The park is positioned to develop a headquartered economy, to encourage supporting enterprises of Dongjiakou to register in Haiqing.
“To date, we have 10 enterprises registered here, which alone brought our town a tax revenue increase of 12.6 million yuan (U.S. $2 million) in 2016,” said Zhou Ruibin, chairman of the people’s congress in Haiqing.
Military and civilian integration is another feature of the area: The Office of the North Sea Fleet helped Huangling, a provincially registered impoverished village, establish three projects—a poverty alleviation park, a community service center and an infrastructure construction project—while its comprehensive support base assisted two other villages.
First secretaries have also made remarkable achievements: In 2016, 65 appointed first secretaries implemented 389 poverty alleviation projects, totaling 65 million yuan (U.S. $10 million) and resolving for the impoverished a total of 3,520 actual-problem cases.
Moreover, the new area–owned departments provided assistance to 65 key poverty alleviation villages. All cadres at the section level or above helped provide one-on-one support to impoverished households. Last winter, with financial and material aid amounting to 7.5 million yuan (U.S. $1 million), more than 4,500 cadres visited all impoverished households to help make sure they enjoyed a happy Spring Festival. The cadres helped solve more than 5,800 of the households’ problems, all the while establishing a mechanism for regular visiting.
Sustainability
Simply moving funds and materials from richer locations to impoverished ones is not a sustainable means to alleviate poverty: More efforts should be focused on industrial development and projects.
Owing 80,000 yuan (U.S. $12,000) in debt, 45-year-old Shi Fajia—who hails from Zhaitangdao Village of the area—fell into poverty as a result of illness. In 2016, taking advantage of local tourism resources and help from governments at village, town, and district levels, Shi developed the local market for “fish feasts” (distinctive banquets featuring specially prepared Shandong seafood delicacies) while also opening a family hotel and selling seafood online, all of which helped him generate more than 130,000 yuan (U.S. $20,000) that same year. Earning a steady income of around 50,000 yuan (U.S. $7,500) annually, he successfully climbed out of poverty. Shi also helped lead more villagers to engage in tourism development. Currently, Zhaitangdao is home to six family hotels, whose annual income reached a million yuan (U.S. $150,000). In total, all of the distinctive projects in the district have lifted 316 people out of poverty.
In 2016, Qingdao West Coast New Area allocated 99.08 million yuan (U.S. $15 million) as poverty alleviation funds, invested 37.69 million yuan (U.S. $5.6 million) in poverty alleviation industries, and leveraged 630 million (U.S. $94 million) of social capital. But the matter of how best to use these funds needed careful consideration.
One of the most significant experiments by the new area was that of asset-based poverty alleviation, which turned inactive poverty alleviation funds into high-value assets, ensuring sustainability for poverty alleviation.
From 2016, the new area began to assist 30 provincial-level impoverished villages and 35 municipal-level ones with annual poverty alleviation subsidies of 600,000 yuan (U.S. $90,000) and 500,000 yuan (U.S. $75,000) respectively.
“Some villages do not have adequate resources for industrial development and high-yield projects, or are unable to invest autonomously with significant risk. This leads to unused poverty alleviation funds or even to an investment deficit,” said Zhang Hui, vice director of the Qingdao West Coast New Area Poverty Relief Office.
In order to make optimal use of these funds, the new area came out with Suggestions on the Purchase of Commercial Assets with Poverty Alleviation Funds based on a democratic decision-making process across 65 impoverished villages. Over three years, the new area plans to purchase Qingdao Huangdao Development Group—a state-owned enterprise (SOE)—with high-quality assets totaling more than 100 million yuan (U.S. $15 million): 35.5 million yuan (U.S. $5.3 million) each year, split among the villages. These assets will be leased to Fumin Company, another SOE that guarantees a minimum annual dividend of 8% for 20 years. Village collectives can choose whether to renew their contracts or cash out their assets upon expiry.
Lijiadianzi Village is one of the beneficiaries. “During the most difficult times, we even needed to ‘beg for alms’ to afford the salaries of veteran cadres,” said Li Kailiang, secretary of the village party branch, “with poverty alleviation and self-raised funds, we built 10 mushroom greenhouses in 2015 and leased them to companies, which brought in a total of 120,000 yuan (U.S. $18,000) over three years. Last year, we bought high-quality real estate from Qingdao Huangdao Development Group with 1.4 million yuan (U.S. $210,000) of poverty alleviation funds for 2016–2018, and received a dividend of 120,000 yuan (U.S. $18,000). We will invest all this revenue into the second phase of greenhouse construction and will build 10 more this year. With the help of the Qingdao Science and Technology Council, we will establish a 16.5-acre mushroom production base in the future. We already have a say in the mushroom prices on the (Qingdao) west coast.”
“In the past, village collectives did not have money to solve villagers’ problems, and party branches did not have any prestige. Since poverty alleviation work has driven villagers out of poverty, party branches have now been inciting widespread response,” added Li.
“This model can insure a collective income of 150,000 yuan (U.S. $25,000) across 65 key poverty alleviation villages,” said Li Chunrong. “If the ‘v1.0’ model of poverty alleviation is fund allocation or (to use a metaphor) ‘blood transfusion’, then the ‘v2.0’ model is fund-to-asset conversion or ‘blood production’. Then, the parlaying of the returns from these assets is the ‘v3.0’ model, which denotes the autonomous generation and allocation of one’s own blood. Such is the virtuous cycle of poverty alleviation funding.”
The article was translated by Jin Ling and its original unabridged version was published in Chinese.
