As the most populous developing country, China has most of its impoverished population concentrated in the rural areas. Since 1978, the Chinese government has moved away from a planned economy and pushed market reforms, as well as liberalizing the rural economy, raising rural productivity and alleviating widespread poverty through the household responsibility system.

Furthermore, in the mid-1980s the Chinese government started systematic, mass poverty reduction and development efforts. As a result, the number of impoverished people without adequate food and clothing declined from 250 million in 1978 to 23.6 million at the end of 2005, with the share of the population living in poverty falling from 30 percent to less than three percent. China has achieved the first Millennium Development Goal of the United Nations well ahead of the target date of 2015.

"In the pursuit of poverty alleviation and development, China has charted its own path, suitable for its own conditions. This path involves government leadership, social participation, self-reliance, an orientation toward economic development, and an integrated development approach," said Liu Jian, director of the State Council Leading Group Office of Poverty Alleviation and Development.

In addition to incorporating poverty alleviation and development into overall economic and social strategies, the Chinese government has increased budgetary allocations for poverty alleviation. Between 1986 and 2004, the total budget support allocated reached 112.6 billion yuan (14 billion dollars), and subsidized loans reached 162 billion yuan (20 billion dollars).

In 2005 the budgetary support for poverty alleviation totalled 13 billion yuan. To ensure that budgetary poverty funds reach the designated impoverished farmers, the use of funds is to be proclaimed, published, or reimbursed, adding transparency and public supervision.

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