Chinaspolicies,practicesandprospectsofpoverty.docx

China’s policies, practices and prospects of poverty reduction through finance By Du Xiaoshan Researcher of Rural Development Institute, CASS President of China Association of Microfinance Background Microfinance in China should meet three demands for poverty alleviation through development projects. First, the demand of poor people for carrying out production and operation activities, pursuing education and medical services. Second, the demand of poor areas for developing industries, promoting employment and economy, and lifting more people out of poverty. Third, the demand of poor areas in seeking capital to build infrastructure. For example, transportation, energy, irrigation works, telecommunication, education and healthcare. Also, the poor areas should address the long-term sustainable development issues by providing equal basic material supply and public services. These three aspects need huge amount of capital input. The source is financial support. The infrastructure in rural China are outdated. They also face with low productivity and shortage of investment opportunities, which leads to continuous draining of financial resources in rural areas. Outline First, major policies of poverty reduction through finance Second, practices of poverty reduction through finance Third, prospects and reflections on poverty reduction through finance in China First, major policies of poverty reduction through finance 1.Poverty alleviation through microcredit loan. Since 2004, the Central Government and State Council have paid attention to the development of microcredit loan in their No. 1 document. In 2000, PBOC, the central bank of China has launched Guidelines on Rural Credit Association Rural Household Joint Guarantee Loan, in which the rural credit associations are required to provide joint guarantee loan to rural household according to GB model. In December 2001, PBOC unveiled Guidelines on Rural Credit Association’s Microcredit Loan for Rural Households,in w