Lessons Learnt For Rwanda From China's Poverty Reduction Strategies: Policy Analysis Review's

Journal of Economics Bibliography
www.kspjournals.org
Volume 6 June 2019 Issue 2
Lessons learnt for Rwanda from China’s poverty

reduction strategies: Policy analysis review’s
By Gerard BIKORIMANA aa
& Shengmin SUN ab†
Abstract. The present study analyzed the possible lessons to learn in Rwanda from the
China performance experiences in poverty reduction tragedies. Over the last 35 years, China
has impressively made enormous treads in its fight averse to poverty as it has changed in
one of the greatest vibrant economies in the global. The China success in poverty reduction
is dedicated largely to different economic reforms which lead to economic growth,
implementation of poverty lessening strategies, rural development programs and as well as
open door policies. Recently, China has been serving as an economic role model for many
developing countries including African states due to its substantial progress in fighting
against poverty. In the same way, Rwanda is still struggling with a high rate of poverty
even if there is a huge achievement but still there is a long journey to go. The growing
cooperation between China and Rwanda are frequently elucidated by the country's call for
its natural resources to be based on country development, China is an astonishing example
which clearly indicates how a country can revolt from poverty within a decade and be a
leading performer on the worldwide scene. From this perspective, there are some policy
lessons that African countries including Rwanda can learn from the socio-economic
transformation success of China. Even if Rwanda has been gradually facing the
developmental restrictions which China did not, and given that the background for
Rwandan country differs too much with China, it is worthwhile to draw important lessons
from China's success story on how it escaped millions of its population from poverty.
Keywords. Poverty reduction, Strategy, Policy, Rwanda, China.
JEL. H50, H70, I38.
1. Introduction
N
owadays, China has emerged as a powerhouse for many industries
and some scholars argue that China has become the World factory.
In that perspective, China impress the whole African continent and
it is now a pragmatic development partner; whereby may political and
economic observers consider a new era and move of South-South
relationship to replace the North-South relationship in the future. Persistent
poverty in Africa is due to constantly failed and unpopular policies taken
by the many Government of African countries, and this malaise is a
common cause for chronic and extreme poverty in Africa. From this point
of view, there is a lesson to learn from China on how it overturned the
aCentre for Economic Research, Shandong University, Jinan, Shandong Province, China.
. +8615628930017 . [email protected]
b† Centre for Economic Research, Shandong University, Jinan, Shandong Province, China.
. 8653165857 . [email protected]
similar malaise between the years of the 1950s and 1980s when China was
closely comparable to many African countries have the same socio-
economic status. The research made by Chen & Ravallion, (2007) indicated
that in the 1980s two out of three Chinese were living under poverty line of
$1 a day, whereby on the other hand in Africa especially in the Sub-Saharan
Africa 40% of the populace was living under poverty. The efforts of China
in fighting against poverty since 1978s created a dramatic gap between
Sub-Saharan Africa and China to the extent that in the 2000s in China less
than one person was living under-poverty while it was the same
proportion of 40% of the population in Sub-Saharan Africa who were living
underneath the poverty line. The poverty reduction trend percentage was
1.9% in China while it was 0.1% in Sub-Saharan Africa. However, it is not a
straight forward task to compare Sub-Saharan Africa and China and then
figure out many valuable lessons for African countries because the contexts
of the two parts of World are quite different.
In fact, in most Sub-Saharan Africa including Rwanda in the last thirty
decades failing leadership and bad governance used to lead to political
instability which usually resulted in wars. However, China was building a
strong leadership and good governance that contributed to the promotion
of market liberalization which facilitated the Foreign Direct Investment and
innovation and creativity (Van de Walle, 2001; Posner & Young, 2007). The
Sub-Saharan African countries are mostly unable to finance their economic
development through public investment in Agriculture and Infrastructure
developments as did China over thirty decades. In this paper, the author
attempts to outline and emphasizes the impressive policy lessons that
Rwanda can learn from China's success. However, it would not be a good
practice for Rwanda to copy and paste any policy from China in order to
eradicate poverty but it can be worthwhile to draw some lessons to support
homegrown solutions in fighting against poverty.
The Economic Development and Poverty Strategy of Rwanda has to be
inspired by the Chana's subsequential economic reform over last thirty
decades but it is important to note that by liberalizing too much the
economy would create inequality which is not a good example from China
to follow. In addition to this, there some important common characteristics
between Rwanda and China namely high inequality, high dependence
rates because of high fertility rate, and high population density; which
enable the author to easily compare Rwanda' strategy for the fighting
against poverty with one of China and then draw impressive domestic
policy lessons on how China initiated and implemented its strategy for
poverty reduction and why it made a successive progress against poverty.
In fact, China’s success in lessening poverty is factual indeed from 1981
to 2013, whereby China lifted 850 million people out of poverty, and
including particular achievement of lifting a great percentage of people
from extreme poverty from 88% to 1.85% in that period. Throughout this
era, China fascinated the attention of many economic practitioners and
social scholars and other worldwide organizations to lay out important
G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.
53
lessons, especially for the underdeveloping countries particularly the Sub-
Saharan Africa. In this perspective, Dollar, (2008) presents a number of
policies that China implemented to drop down poverty and those policies
can give valuable inspiration and foundation for Sub-Saharan Africa. Heilig
et al., (2005) indicated that the economic reforms must be a major pillar in
fight against poverty in their first stage for the under-developing countries,
and in next stage, they have to focus on social scheme and regional
integration and market reforms.
The reason why the World can learn from China’ s success in escaping
from poverty is that in the eras before 1980 China was even poorer than
some of the African countries and among the poorest in the worldwide.
However, over the period of 35 years, China has been constantly
experiencing ambitious and sounding socio-economic transformations that
allowed to achieve pragmatic achievement in the economic and human
development and consequently dramatic reduction in poverty. China’s
economy has steadily been rising at an average rate of 9.8% every year
from the time when the economic reforms was introduced in 1978, the per
capita income has been gradually increasing in fifty-fold over 35 years. The
Human Development Index (HDI) was improved gradually from 0.423 to
0.719 respectivery in 1980 to 2013 and this has placed China on the table of
honors with high human development classification at 91 out of 187 states
around the World (UNDP, 2013). In addition to this, by 2013 China had
already attained almost all Millennium Development Goals (MDGs) ahead
of Sustainable Development Goals by 2050. This extraordinary socio-
economic development has made China the second heaviest economy in
the worldwide in 2010 after the USA, and hence increasing China’s global
power and influence. However, stable and sustainable economic growth
and extraordinary transformational achievements of China was not smooth
at all because they created rough domestic disparities, especially socio-
economic development imbalances in terms of admittance to social facilities
economic prospects, between regions whereby the eastern region and
seaboards were heavy than the interior and far west regions, and severe
disparities are observed between urban and rural populations. Within the
initiation of new economic reforms in late 1978, the Chinese economy
outstretched at a stable growth rate beyond 8% per capita, foremost to a
histrionic upgrading in living conditions. This progress has powered
historically unheard of poverty lessening: the split of populace below the
poverty live in worldwide based “cost of basic needs" decreased from 60% at
starting of economic reform in 1978 to 7 percent in 2007 (Sardana & Zhu,
2017).
The remaining underdeveloping countries fighting to develop and
decrease poverty are indeed attracted by impressive progress in poverty
reduction of China, their wandering about the sources of progress and if
possible lessons which can be drawn from that success. There are
numerous ingredients that have guided to China's achievement. Some of
these ingredients are deep-rooted on a characteristic of Chinese culture
54
which put much focus on education and as well as saving practice. Others
factors involved in the success change the system ("Gai Ge Kai Feng”) which
was about altering economy from nearly full state-owned to private
management, promotion of direct foreign investment, development of
infrastructure, and as well agriculture promotion and rural development
(Qin, 2015). All those initiates and reforms had been positively contributed
to a sharp reduction in poverty in China and some other developing
countries may draw very important lessons from such practices.
However, poverty in Rwanda has changed, throughout the previous
three eras. The Rwandan economic situation replicates a chronic failure to
achieve production increases in the framework of a large and in the
proportion of population growth. This problem of failure dated a long time
as evidence from the 1980s and early 1990, topping to severe physical
hitches. Additional, 1994 Tutsi genocide left a terrible legacy, further
depriving the country and leaving in a horrific situation of poverty.
Different poverty programs were implemented in Rwanda. The poverty
evaluation in Rwanda indicate gradual achievement from 44.9 to 39.1%
respectively in 2010/1 to 2013/4 (NISR, 2016), but the MDGs objectives were
also achieved except the ones poverty reduction whereby the achieved was
39.1% compared to 30.2% as a target to reach. With this situation, the study
raised relevant questions which are about: why has Rwanda stayed behind
schedule? What might be the lesson which Rwanda could learn from
China's success in poverty reduction? For sure China is a typical better case
to learn from their achievements.
Nevertheless, there are motives for wisdom in printing lessons for
Rwanda from greatest achievement in poverty reduction of China. The idea
behind this is not to copy and paste china's particular program for
achieving the same success as China. For instance from the period of 1978
was characterized by the series of economic reforms in China and has
successful achieve impressive results. Also, Rwanda should not only learn
from successes, likewise to the development pathway of China. In this
learning process, it must be recognized that the challenges faced by
Rwanda in this journey of poverty reduction, are not definitely the same as
those faced China. From this perspective, since the beginning of economic
reform period, the differences between China and Rwanda are quite
apparent; Rwanda tends to have upper inequality, a higher rate of poverty,
high dependency level, landlocked geographic location and higher
populace density. Therefore, nothing of this justifies that Rwanda cannot
learn from the extraord achievement of China in reducing poverty. The
present study aim at understanding the extraordinary success of China
averse to poverty, specifically the mechanism throughout the reforms
preside over poverty lessening, to offer a historical general situation of
poverty reduction strategies in Rwanda and as well to pull out some
policies lessons from the achievement of China in poverty reduction.
The remaining of the paper is structured as follows, section two present
briefly sympathetic china’s progress averse to poverty, the third section
55
reviews policies and Strategies for poverty reduction in Rwanda while
section four describes some policy lessons learn for Rwanda from China
and final section stretches conclusion and Polcicy recommendations.
2. Sympathetic China’s progress averse to poverty

2.1. Overview of China’s poverty alleviation programmes
The Chinese successful poverty reduction is a key learning experience in
this paper where all attention will be paid to learning how China has
succeeded in reducing poverty for its entire population from the 1980s.
Although making a comparison between countries in the ways they
implement policies and strategies for poverty reduction purpose, it is not
easy due to many differences in terms of geopolitical, economic and
environmental conditions, cultural settings; one country can provide very
useful inputs in designing and implementing poverty reduction policies
and strategies. In this section, the author looks into the path for the fighting
against poverty that China embarked on in the late 1970s up to 2010 era.
China has made spectacular progressive poverty reduction over the three
decades and its today rapid economic growth is logically attributed to its
successful poverty reduction programs.
China's poverty reduction strategies were successful thanks to large-
scale and quick economic progress in the previous three decades. This
success story was a reality through the continuous reform and structural
changes that were facilitated by the shifting from the centralization of
economic planning to the decentralization of markets and economic
diversification activities increased from agriculture to manufacturing and
services industries with effective technological development and know-
how transfer, and opening up to the international trade. The famous china's
8-7 socio-economic development Plan aimed at lifting poor households
from poverty by improving agriculture, creating and exploiting
employment opportunities; providing and developing basic development
infrastructures including modern housing, roads and electricity, and
improving access to potable water; and along this ensuring primary
education for all and improved health care services accessibility (Sangui et
al., 2004).
China's poverty reduction strategy program was facilitated by the
continuous macroeconomic and political stability of the country. China also
reformed its political and administrative system for effective and enhanced
policies and decision-making processes and this administrative flexibility
attracted many public-private partnerships bringing together
administrative institutions, private enterprises and companies, and non-
government organizations joint efforts in combating poverty in China.
In addition to this, China privileged and financed numerical and
innovative startups embarking on projects and ideas towards job creation
benefiting young engineers and promoting rural initiatives involving many
poor households in rural areas of China. In 2001, the Chinese government

56
started a new poverty alleviation plan particularly on developing rural
areas in terms of infrastructures and education in order to limit the massive
exodus from rural areas to urban areas (Hongbing, 2001). It worthwhile to
note that cornerstone of successful Chinese government lies on the efforts
deployed in developing the rural areas where in the 1970s the household’s
income in China’s rural areas was extremely very low and a majority of the
Chinese population was living without access to basic assets.
2.2. Evolution of China's poverty reduction strategies and policies

China's successful poverty reduction strategies program dated from
1978 and is classified into four phases (Sangui et al., 2004):
(i) The rural reform of 1978-1985: In the year 1978, China's economy
performance was deteriorating and poverty was severely ravaging the
whole country. This program was characterized by the land reform and
household responsibility system (HRS) in which the Chinese government
performed economic lifting to Chinese population through the equitable
provision of land to millions of individual farmers with remuneration for
high agriculture production with many rural industries and enterprises
being created during that period. This program created a landscaped rural
economic growth through rural and institutional reforms all over the
country which in turn helped to boost the production of goods and services
for local markets and enhancing distribution systems.
This program benefited the entire rural population by raising their
income and reducing poverty. The rural reform in China since the 1980s
helped to achieve good economic performance characterized by high
sustainable economic growth, low inflation, and unemployment rates. Thus
such new macroeconomic favorable conditions allowed for effective
poverty lessening throughout that period of time.
The result from rural reform on poverty reduction was quite
remarkable. The agricultural production steadily increased by an average
rate of 6.5% from 1978 to 1985, while the per capita income of rural
household subsequently increases at an average percentage of 15.2% for the
same period. Further, an yearly sustainable progress rate of 5.7% in grain
production and in rural industries' output was recorded, and subsequently
a strong price increase in agricultural and farming products contributed to
the increase in rural incomes at 15.2 % per year, which in turn resolved the
extreme long-standing food shortage in rural areas of China. This increase
in agricultural productivity and rural revenues was also justified by the
significant poverty reduction from 49% to 24%, and in real terms the figure
of poor people in rural settings decreased from 250 to 125 million
respectiverly in 1978 to 1985 measured at the approved poverty line (Guan,
1995; World Bank, 2005).
(ii) The National Poverty Reduction and Development Programs 1986-

1993: After learning from the rural reform program where poverty
reduction pace was very slower and the households living standards was
57
lagging and the inequality was rising; the Chinese government launched a
large-scale development program called The National Poverty Reduction
and Development Programs with a wide range of stakeholders of
government agencies with a variety of funding channels in order to
coordinate a large number of poverty reduction initiatives where the
government created the special funds in order to support national poverty
reduction programmes including subsidized loan program, food for work
(FFW) program, and budgetary poor area development funds and grants
(Sangui et al., 2004).
This program aimed at sustaining the agricultural growth through
public investments in education and research, hard infrastructures such as
roads and irrigation which later encouraged agricultural productivity and
generated many job opportunities for millions of rural population in China.
During the 1980s the Chinese government introduced a 9-year compulsory
schooling program and the government heavily invested in agricultural
research and engineering targeting poorer rural marginalized areas and
groups of people, providing millions of rural farmers and laborers with
jobs in irrigation projects. The national poverty reduction and development
programme produced a tremendous result in poverty reduction whereby
the rural poor population dropped from 125 to 80 million respectiverly in
1985 to 1993 (Sangui, 1994).
(iii) The 8-7 Poverty Reduction Plan 1994-2000: After the success of the
National Poverty Reduction and Development Programs of 1986-1993
where there is a remarkable impact on poverty reduction, there were some
other increasing difficulties and the diminishing pace was being noticed
and required more government commitment and efforts folded to tackle
the food scarcity and clothing problems for the remaining households
which were still living in poverty. It is in this context that another national
anti-poverty strategy known as the 8-7 Plan was launched targeting already
identified and listed counties, and it aimed to assist poor rural households
by improving agriculture, improving employment opportunities, providing
and developing basic development infrastructures including modern
housing, roads and electricity, and improving access to potable water; and
along this ensuring primary education for all and improved health care
services.
This poverty reduction plan showed great achievements in poverty
lessening. The figure of rural poor population was reduced from 80 to 32
million respectiverly in 1993 to 2000 (Meng, 2013). The annual poverty
reduction rate was 12.3% during that period of time, with 3.6% biger than
the average rate of poverty lessening for the whole reform period of post-
1978. The literacy rate rose to 85%, while the enrollment proportions rose to
99% and 89% respectiverly in primary and secondary education during the
same period. The tremendous progress was also achieved in the health
sector, whereby the life expectancy at birth increased to 70 years, infant
mortality rate dropped to 3.1 %, and under-5 mortality cut down to 3.9 %,

58
the diseases immunization from birth stretched 98 %, with 85% of the total
populace could have admittance to essential medicine (World Bank, 2001).
(iv) The New Century Rural Poverty Alleviation Plan for 2001-2010:
Based on the pragmatic lessons drawn from the previous 8-7 Plan, the
government of China engaged in the new Century Rural Poverty reduction
Plan covering the period from 2001 up to 2010. In the early 1990s, it was
obvious that a large scale poverty alleviation program was most needed as
it had been revealed that the poor rural populace in China was largely still
there and particularly concentrated in western regions where poor families
were relatively dispersed in poor villages instead of in poor counties. This
is why the new plan came in targeting poor villages rather than poor
counties.
This plan emphasized mainly on science and technology, but also on
culture, and health improvement. The New Century Rural Poverty
Alleviation Plan sought to sort out the disparities observed between the
urban and rural areas all over China with the intention to limit the mass
rural-urban migration. This new century plan was facilitated by the
regional integration and globalization which has created global networks,
and which allow China to boost the foreign direct investments (FDI) and
fuel into heavy industrialization revolution and new technologies and
management skills. This program has been characterized by a huge amount
of exports, building big cities, stimulated high tech innovations so as to
conquer world markets (Yansui et al., 2017).
The strong overall result of this programme was mainly the decrease
from 32 million in 2000 of the rural poor population to 15 million in 2007.
This tremendous achievement in the rural poverty reduction and
development programs during this period was largely enabled by the
capacity development of local communities especially in terms of
agricultural technology training, and a wide range of investments in
infrastructure including roads and irrigation projects, construction of
schools and health clinics (LGPRD, 2001).
(v) Precision Poverty Reduction Strategy (2011–2020): The Chinese
authorities have introduced the new Poverty Reduction Plan covering the
period from 2011 to 2020. The main objectives of this new poverty
reduction programme were, first of all, to eradicate poverty by 2020.
Another mission was to narrow the existing regional disparities. Within
this development strategic framework, the government of China surveyed
14 poor regions with special difficulties, 832 poor counties, and 128,000
poor villages to receive government grants and assistance. To effectively
implement this programme, the Chinese government formulated another
five-year poverty reduction plan in 2016 with the main focus on the main
thematic areas including the assistance to the poor households through
agricultural and industrial development opportunities inclusiveness,
providing better housing conditions by relocating people living in rural
remote or naturally bad climate conditions areas. The government of China
budgeted an envelope of 600 billion Yuan to finance the relocation
59
programme. The subsidies were extended to households with low income,
to poor households to ensure their education (Liu, 2017). The education
strengthening measures include developing preschool education in poor
villages, providing free lunch for all primary and middle school students in
poor counties, and providing free high school and technical and vocational
school education and living allowances for students from designated poor
families. The poor households were provided with assistance in terms of
social security in order to help them have access to basic health services.
For effective implementation of this poverty reduction programme, the
partnerships between local governments and development partners and
other stakeholders including financial institutions, rural enterprises, and
cooperatives to participate in that poverty reduction programme. This
programme has also recorded tremendous results for the sake of fully
eliminating poverty by 2020. In this perspective, the results showed that the
rural poor population has been reduced from 166 million in 2010 to 43
million in 2016 with an annual poverty reduction rate of 20% (UNDP,
2016).
In concluding this section, it is important to say that nowadays, all
developing countries can learn from the Chinese experience and China is
becoming a development model for many developing countries. The key in
the Chinese successful poverty reduction resides in the full political
commitment where the Chinese government has been proceeding for
building strong state institutions accompanied by the decentralization of its
administrative system and economic powers to the local governments and
hence enabling its citizen got empowered and able to participate in the
decision processes and empowerment. China succeeded in poverty
reduction because it opted for the transition from an agricultural to an
industrial and service-oriented economy. China consistently reduced
poverty to millions of its population by promoting and accompanying
entrepreneurial initiatives and adjusting its market mechanisms.
Recently, after evaluation in 2015 found that around 55 million
population still live below the poverty line and most of them live in rural
and detach areas in the country. Addressing this challenge, in the 13the five
Year Plan 2016- 2020 poverty reduction program was taken among the
priority with the purpose of raising all population remain in poverty by
2020 (UNDP, 2016).
China's spectacular development and advance during the past three
decades reflect the openness of its economy and society to the international
trade which has made one of the greatest export powers of the world.
China's exports are fuelled by the vast inflows of foreign direct investments
from all over the world, which have made China be the great hub of
modern industries and factories with advanced technology. Now China is a
global power of science and technology, and many Chinese workers who
are proficient in all categories of skills are scattered across the world to
conquer every single market through their highly competitive enterprises.

60
2.3. Sympathetic China’s poverty reduction policies and strategies
According to Wu & Cheng, (2010), the policies and strategies for poverty
lessening can be viewed in three main constituents such as pro-poor
economic progress strategies, a rural social security, and development-
targeted on poverty lessening policies and programmes. This section is
going to analyze the main poverty lessening strategies, policies, and
programmes in rural areas of China so as to draw key lessons for Rwanda
2.3.1. Rural reforms and poverty reduction
In the late 1970s, China initiated its economic reforms which led to the
decentralization of its economy to make it market-oriented and controlled
based on the openness to the international trade and cooperation. In the
rural areas of China, there are still some remarkable signs of extreme
poverty and high inequality. Despite its pragmatic economic development,
China remains one of the developing countries because the living standards
are still low as it is still the case for Rwanda. Despite strong rural reforms in
the late 1970s, the disparities between China’s urban and rural settings are
worrying today. Largely, China's success touching poverty is based on
development of urban areas, industrial development and exports
promotion which hugely fulled by Foreign Direct Investments (FDI) but the
fight against poverty is ongoing in rural settings. The rural reforms reside
in economic reforms which are materialized by the fact that rural poverty
was spectacularly reduced to 30.46 million people by the end of 2017 with
the poverty incidence decreased to 3.1% (Montalvoa & Ravallion, 2009;
David, 2007). In the years of 1980s and 1990s, China introduced the land
privatization policy which in turn resulted in dramatic poverty reduction.
China's rural development has activated the booming creation of small
and medium enterprises since the 1980s. This rural industrialization
created real non-farm employment opportunities for the rural Chinese
population (Zhang et al., 2015). In the early 2000s, it was estimated that
about a half of employment opportunities apart from farming jobs were
found in rural enterprises. The rural enterprises contributed to the
improvement of lives of people living in rural settings and hence to the
rapid and sustainable development (Zhang, 2003). The gross production of
rural enterprises which was about a 10% share of China’s GDP in 1985,
increased gradually to be more than 30% in the 2010s. This is the
undoubtfully the proof that the development of rural enterprises has
contributed effectively to reducing income inequalities and hence poverty.

61
Figure 1. Poverty reduction in China between 1990-2015 based on international poverty

line(1.90$ US per day)(% of population)
Source: Computed from World Bank, (2018)
2.3.2. Industrial development and poverty reduction

Economic development is a strong pillar for rural development whereby
enabling productivity and employment. In this economic transformational
process, there is a notable transition from farm jobs to non-farm jobs such
as industry and services jobs and furthermore, this process enables the
towns and cities on the national wide level. The industrial development
process in China started from about two centuries and has been a
continuous process through which firms gradually developed more
manufacturing techniques and capabilities thanks to the cross-national
technology transfer from Russia and many European countries which
allowed the accumulation of knowledge and factory level production
techniques. In the 1970s, the manufacturing industry in China rose
gradually to cover the entire range of industrial activity through the wide
range of product mix, including highly sophisticated operations involving
petroleum refining, ships building, car manufacturing, military equipment,
nuclear weapons, and earth satellites.
A sophisticated and successful industrial reform in China which began
in late 1978 demonstrated great achievements impacting all economic
spheres starting from rural industry including mining and construction as
well as manufacturing whereby about 20 million jobs were created within
three decades on in (Thirty Years, 2008). The development of industry in
China recorded great performance since 1952 whereby industrial
production was averaging an yearly growth percentage of more than 11%
per annum between 1952 and 1978, while employment rate was increasing
at an increasing rate of nearly tenfold, just to say specifically from 5.3
million jobs in 1952 to 53.3 million jobs in 1978. However, within such
period of time, the industrial revolution and structural change accelerated
the pace of shift in the structure of the industry, from traditional and
dominant consumer manufacturing products toward intermediate and
producer products. Hence the new and modern industries especially for the
manufacturing of heavy machines, telecommunications, and power

62
generating emerged accounting from only 6.2 % of industrial output in
1952 to 25.7 % in 1978 (Brandt et al., 2016).
The openness of China to the international trade and the liberalization of
the domestic market enabled such industrialization to be effective. In
industry, the industrial reforms which systematically began in the early
1980s whereby within the framework of the programme called Township
and Village Enterprises (TVEs) allowed the expansion of collective rural
industrial firms. This industrial development programme produced
remarkable results in developing the whole manufacturing sector in China
with the labor-intensive production of consumer goods, development of
sophisticated factories for textiles, garments and food processing (Xiaolan
& Balasubramanyam, 2003). The industrial development and expansion of
industrial firms in rural areas of China have been the major pillar of the
successful economic reform process and this was facilitated by the
macroeconomic decisions made by the Chinese government to make state-
owned enterprises (SOEs) more autonomous.
The industrial reform in China usually was done in three development
phases whereby the first phase was about the move from agricultural
communes to household farms. Around 1980, the mandatory target
framework of output planning and administrative allocation of inputs and
products were designed for the purpose of improving the performance of
enterprises within the domestic markets. Within this framework, state-
owned enterprises obtained the upright to keep a modest portion of total
profits and unparalleled inspection over any output above the required
plan goals. In this regard, a number of efforts were undertaken such as
decentralized and semi-market transactions, long tolerated grey market,
was also encouraged as a means of encouraging firms to preside over their
doings more actively and effectively. However, concerning the external
markets, a new "open door policy" dismantling long-standing barricades to
global trade and investment endorsed by special motivations to increase
overseas economic contacts, especially in the Southern region. The seconds'
phase constituted the expansion of Township and Village Enterprises
(TVEs), whereby in early of 1984, the new reform policy focused on two
novelties such as dual pricing and the enterprise contract responsibility
system. Dual pricing segregated supplies of industries production into plan
and market components.
In this system, the state-owned enterprises (SOEs) performed marginal
auctions and acquisitions on marketplaces where prices replied gradually
to the powers of supply and demand in order to ensure long-term
economic stability. And at the similar time, bank credits in substitute
budgetary assumptions became the reliable source of outward funding for
industrial enterprises, hence stimulating the emergence of start-ups. and
the third phase constituted the restructuring and privatization of
individual state-owned enterprises (SOEs) whereby the contract
accountability system was introduced and then the enterprises were
allowed to set performance targets with their employees for total profit and
63
economic surpluses. With the reorganization and restructuring of State-
Owned Entreprises (SOEs), the new management system allowed the
flexibility in different performance management domains including
research and development, product innovation, investment planning,
marketing, supply chain management, wage and employment structures
(Brandt & Thun, 2016; Hu & Jefferson, 2008; Naughton, 2015).
Consequently to these industrial development policies and strategies, a
big amount of domestic private firms were created and due to the open
door policy of the Chinese government, many foreign private firms were
also attracted by the establishment of special economic zones (SEZs) which
helped very much in making easy foreign direct investment, and hence
introducing duty free policy for materials destinated to the manufacturing
of goods exclusively for exports. Therefore, following that robust industrial
development and reform processes which reshuffled the free trade and
factory expansion, it was a starting point for the development of
commodity and many other important sectors to the Chinese economy,
especially the craft sectors. In this perspective, the Chinese acquired
numerous intermediate technology and engineering and chemical skills
from Japanese particularly in expanding small-scale textiles factories in
producing cotton goods foodstuffs in northern China (Rawski, 1980, 1989;
Grove, 2006; Ma, 2008). However, the emerging of private firms in China in
the early 1980s was the overall results of creation of technical schools
specializing in textile engineering, and engineering profession overhaul,
and importantly the creation of local chambers of commerce whose role
was to facilitate the dissemination and sharing of-technologies and
knowhow start-ups (Morgan, 2003; Haggard, & Huang, 2008; Schott, 2008;
Mandel, 2013).
However, the most vital effect of these reforms was a change from
planning economy to the market economy. Researches conducted by
several scholars between the period from 1980 to 1989 indicated that the
magnitude of market transactions done by the state-owned enterprises
(SOEs) changed gradually; whereby the portion of material inputs bought
via the marketplace increased from 32 to 59 % (Yingyi & Jinglian, 2000), or
from 12 to 66 % (Jefferson & Rawski, 1994). The similar surveys indicate the
portion of output sold on the marketplace increased from 49 to 60% (Furen,
1991), or from 13 to 66 % (Jefferson & Rawski, 1994). In addition to this,
during the 1980s the enterprise funds and bank loans became the main
source of external sources of finance for enterprises in replacement of state
budgetary grants. This industrial reform enhanced the enterprises'
autonomy, created fair market completion among enterprises, and finally,
the allowed the entrepreneurial incentive mechanism system within
enterprises (Yingyi & Jinglian, 2000; Fan & Woo, 1993).
2.3.3. Economic Growth and Poverty Reduction
Economic growth is more important tool for lessning poverty and
upgrading the human conditions of living in all developing countries and
maintaining a better standard of living in developed countries. Actually,
64
economic growth brings prosperity and creates more employment
opportunities, makes structural adjustments possible and effective and
deepen other associated reforms. All emerging economies in this new and
modern world are relying on high, stable and maintainable economic
progress which truly facilitates the development of minor and middle
enterprises which in turn contribute in increasing government revenue,
preventing financial risks and maintaining financial stability. Economic
growth needs to be supported by political stability, favorable business
environment, strong leadership, and good governance. Economic progress,
thus, contributes to human development, which in turn stimulates
economic progress as well. In the late 1970s, the progress rate of GDP
averaged about 9 % per year during the past three spans (Montalvo &
Ravallion, 2009).
Many scholars especially Shaohua & Ravallion, (2004) and Zhang &
Long, (2005) indicated that there is a positive correlation between economic
progress and poverty lessening.
Therefore, any successful strategy for poverty reduction must start with
promoting rapid, stable and sustained economic growth. The policies and
strategies for poverty reduction must be fully pro-poor that permit the poor
people to involve in the opportunities generated by that growth. This may
be achieved by thinking and drafting policies which can improve labor
markets functionalities, ensuring women empowerment and fully
eradicating gender inequalities in the decision-making process and
furthermore increase financial inclusion for lightening entrepreneurship;
but however, the major determinants of economic progress in any country
consist of improved leadership and governance (Lin, 2003).
Rodrik, (2013), ascertained that economic growth is the best tool for
poverty eradication because it contributes too much to uproot
transformation of any society and help to provide the better life.
Development researchers around the world and especially around a wide
range of developing countries over the past five decades constantly
indicated that rapid and sustainable economic growth has been the most
effective economic instrument to make many people escape from poverty;
and in this way China is a typical example as it has lifted over 500 million
people from poverty to wealth creation since 1979 due to its extraordinary
and rapid, stable and sustainable economic growth between 1985 and 2001.
To achieve stable and sustainable economic growth is not an easy task.
China implemented the market-oriented economic reform; in early 1978,
China started the economic transformation beginning with the rural
reforms (Riskin, 1987; Cheremukhin et al., 2015).
Subsequently to the inceptive rural reforms, the country economy
gained abundant food supply escaping many people from hunger. This
rural reform served as the motivating factor for others reforms that were
subsequently designed and implemented such as opening up the economy
to the domestic private companies (Li, 1991; Jabbour & Dantas, 2017), in the
next stage, reforms also took place in the banking and financial sector
65
whereby the introduction of a new system which incorporated a national
bank, commercial banks, financial companies and as well capital stock
market (World Bank, 1995).
Fiscal, social, and environmental policies are the pillar of China’s
Sustainability of progress and development. Fiscal sustainability refers to
the government expenditures which affect income distribution and hence
reducing inequalities; Social sustainability refers to the social relationships,
interactions, and cohesion for providing the public goods to the human
societies. This creates a supporting cycle leveraging economic progress and
hence improving human capabilities and social welfare, Environmental
sustainability consists of managing natural resources resulting in the
reduction of ecosystem degradation, pollution, the risks of climate
(Saavedra-chanduvi et al., 2013). Growth policies like investment in human
capital and job creation that only foster greater labor utilization could
reduce poverty while the one that seeks to boost technological
development, tends to favor highly skilled workers and can harm the poor
people and lower skilled workers. Growth policies have to increase the
flexibility of the labor market's needs.
The features of China's economic reform have been qualified as
pragmatic, with reference to the famous statement of Deng Xiaoping:
“crossing the river by feeling the stone” (Zhu, Ying, & Warner, 2002).
Therefore, the progress of economic reform was divided into the following
five phases (Zhu & Warner, 2017).
The first phase of economic reform in 1978-1984 which involved the
control of the planning system throughout the strong market regulations,
complementary to the scheduled economy (Dorn, 2016). The conceptual
quarrel for this policy was focused on Deng Xiaoping’s well-known novel
philosophies which state that “socialism could have market economic elements
and capitalism could have planning elements” and “ a good cat is the one which
can catch a mouse regardless its color.”
The second phase was implemented in 1984-1992 and involved the novel
thought of a scheduled market economy to accurately match the standard
philosophy of the social economy. In this perspective of achieving rapid
and sustainable economic reform, the socialist economy is attached to the
rule of value that makes economic operators independent in terms of
decision making on the production, marketing, and pricing system.
The third phase which started from 1992-2001 was characterized with
the new political struggle of shifting from planned economy to a market
economy with the purpose of "establishing a socialistic market economic
system". In this system, the same of major policies were the support of the
private sectors such as local private enterprises and overseas-owned
enterprises.
The fourth phase was implemented in 2002-2013 which was
characterized by an important phase in the development of an upgraded
socialistic market economic system, gifted of the substantial upheaval
taking place over time, comprising world financial crisis in 2008.
66
The fifth phase started from 2013 up today has been designated as re-
concentrating on political regulation whereas more developing market
economy which is more regulated and institutionalized, within the "rule of
law", and the global economic cooperation under the governance of CCP
(Sardana & Zhu, 2017). This form of the economy makes more prominence
of sustainable economic growth and social integration and creation of
enlarged global economic ties. The objectives of more reform in economics
is to achieve the so-called "China Dream." Kuhn, (2011), indicated that
Chinese Dream focused on strong China (in the economy, politics,
diplomacy, technology, and military), Civilized China (equity and fairness,
strong culture), Harmonious China and Beautiful China (Health friendly
environment and low pollution).
Therefore, with this economic reform and other development
innovations over 35 years have been contributed to the economic progress
whereby number of the population in china get out below the poverty line,
good economic, developed infrastructure and friendly environments of
Investments, well-educated and fresher generation of labor force, upgraded
technology and FDI, new investment for Chinese companies abroad
(Zhu et al., 2010; Zhu & Warner, 2017). Economic growth has allowed
creating many jobs in China especially since the 1990s, enabled the
transformation of Chinese society by ensuring the right income
distribution, and the rapid economic growth driven by successful economic
reforms in China has resulted in a miraculous reduction of poverty.
Figure 2. GDP Growth Rate since the reform of 1978 of China and Rwandan situation
2.3.4. Agricultural growth and poverty reduction

The increase in agricultural production has been China's major
accomplishments over four decades in the fight against poverty. The
achievement of the rural reforms obviously constituted a solid basis for the
entire national economic reform and thus the dramatic decrease of poverty.
In late 1978, the "household responsibility system was introduced which
subsequently made the agricultural output increased rapidly and thus
making the rural farmers become richer and wealthier. The agricultural

67
reform was successful and served as the catalyzer of many interesting
reforms in other related economic sectors not only by ensuring the food
security for rural Chinese population but also by upgrading the ideological
and thinking culture towards a market-oriented economy (Rozelle et al.,
1998).
The shift from the common agricultural production to the household
responsibility system (HRS) or individual farming allowing the
liberalization of China’s agricultural economy was the starting point for
economic diversification in China. As a result, amid 1978 and 1984,
agricultural GDP augmented by 7.1% per year, an era when rural poverty
populace cut down the fastest. In fact, the agricultural progress also
perform a major role in enabling and strengthening the adjusting
transformation of the entire economic system. The agricultural progress is
arguably the most successful and the right instrument for rural
development for developing countries and for a better transition from
farming activities to non-farming activities including manufacturing and
service activities when it is supplemented by other more quick growth of
the non-agricultural sectors.
This is a reality as the acceleration of agricultural development has been
facilitating the increase of per capita income and hence the purchasing
power and supporting the industrial development through the provision of
cheap food and creating so many employment opportunities and enabling
the massive consumption of industrial goods as well as. Therefore, the
agricultural growth when accompanied by other right structural
adjustment and economic drivers and institution reform can constitute a
key driver in the overall growth process (Mellor, 2017).
In the early 2000s, China deepened and reinforced its poverty reduction
strategies to make them more decentralized at the community level in
order to lift a mass of Chinese population from poverty. In this perspective,
by the end of 2001, around 21% of entirely rural villages, which had been
formally selected as very poor, were pick out in such pro-poor growth
policies by providing quality and market-oriented education, technical and
vocational training, agricultural subsidized loans, and agricultural tax
exemptions, market-based incentives, all of these in the framework of
Grain for Green Program; Food for Work Program; Pro-farmers policies
and Welfare programmes such as social security expanded to rural poor
people (Montalvo & Ravallion, 2010).

68
Figure 3. China’ Agriculture, forestry, and fishing, value added (current LCU)
2.3.5. Openness to international trade and investment careers

Major world economies had grown stable and sustainable based on
successfully integrating into global markets, notable integration into global
financial capital and multilateralism which are pillars of globalization. The
openness to the international markets allows to accelerate growth,
facilitates technology transfer, increases competition and benefits both
producers and end consumers (Tarr & Volchkova, 2010). Over 35 years,
China benefited from the opening of its economy to the global markets in
terms of smoothing the population living conditions, lowering financial
and market risks, and attracting many worldwide enterprises and
companies and technology transfer from the developed world was a major
target, especially from western countries. In the late of 1978, the share of
the total trade balance in China’s national income amounted to only 7 %.
The open-door policy to international trade stimulated the opening of
China to overseas trade and hence increase the foreign imports and the
boosts exports as well and hence the foreign direct investments in the
country by create many special economic zones whereby foreign investors
can easily start factories and get advantages of the cheap and skillful
Chinese labor. In 1987, the capacity of foreign trade augmented by 25 %
and in 1998 it increased to 37 % of China’s gross domestic product (GDP).
A numeral of administrative reforms were hosted in foreign trade
institutions in the wake of developing world-class seaports. In this
perspective, the regions were given more specific autonomy to administer
their economy and promote their exports independently. Within this
framework, the decentralization of trading activities was deepened for the
purpose of facilitating and increasing exports, and trading enterprises were
created in connection with industrial and manufacturing companies.
China has tremendously benefited a lot from the opening its economy to
the global markets in late 1978, both China’s exports exploded by more
than 7800% and imports increased by more than 5600% in over the last 35
years increasing. The progress in China’s trade balance has faraway
overtaken the development in global trade balance in the recent era. As the
outcome of this China’s growth, the Chinese economy is nowadays the
second biggest in terms of international trading and industrial production
69
after the United States of America (USA). In order to be effective, the open
door policy was eventually supported by the stable macroeconomic system
because normally all investors expect to get the positive return with
minimum risk from their investments. However, the higher the risk is
usually associated with the higher return and economic value added of
investments. In this perspective, a stable macroeconomic environment with
low inflation and financial stability is vital to decrease the risks linked with
investments and it is a precondition for reducing poverty and inequality.
For this, strong fiscal and monetary policy instruments perform an
significant role in financing and enhancing public investments (Heilig et al.,
2005). In fact, trade liberalization made China one of the more open
economies in the global whereby the fraction of overall exports and imports
in GDP augmented from 11 to 64 % (NSBC, 2006). Since China opened the
door to the international trade, the trade share has been snowballing from
under 10 % before the reform period to 22.9 % in 1985, and from 38.7 % in
1995 to 63.9% in 2005. Further, China become a major world markets player
since it joined the World Trade Organization (WTO) in 2001 attracting so
many foreign direct investment (FDIs), and its annual inflows were
averaging $70 billion between 2004 and 2006, while boosting outflows of its
direct abroad investments at around $16.1 billion in 2006 (Chen et al., 2011;
WTO, 2008; UNCTAD, 2007).
Figure 4. China’s FDIs, net inflows Figure 5. China 's Situation of Export and
Import
2.3.6. Social welfare system

The social welfare system includes health care system and social security
scheme. In the early 1980s, the Chinese government dissolved the
commune health care system, and now the health care system is financed
by the local governments for local population, while for the urban
population, the healthcare services are provided into different insurance
schemes such as Government Insurance Scheme (GIS) and Labor Insurance
Scheme (LIS). The GIS is supported by the country budget and covers
government workers, pensioners, disabled veterans, university educators,
and students. The social security was eventually reformed following the

70
reform of state-owned enterprises, in which the new system was initiated
and hence an unemployment compensation and retirement support were
provided whereby employees and firms including private enterprises were
encouraged to jointly contribute to a fund that was established for the
purpose of healthcare expenditures financing (Mark & Laiyin, 1997).
In fact, the Chinese social welfare policies were not much of success as
was economic reforms. In Chinese rural areas, the basic health and
elementary education were the most two fields which were lagging behind
other development fields, while in urban areas the population was
provided with many social benefits and human services including
elementary schooling, health care, accommodation, and recreation facilities
(Hong & Kongshøj, 2014). Since the 2000s, the Chinese government
embarked on the lifting of the living standard of the Chinese population.
The social development in China was supported by the emergence
market-oriented economy and liberalization of labor markets which in turn
helped to increase the freedom of choices for individuals among different
socio-economic spheres such types of employment, workplace,
consumption, business creation, etc. (Guan, 2000; Mai & Mingliang, 2008;
World Bank, 2008).
In fact, in order to speed up the improvement in social and welfare
system, The Chinese government opted for three major aspects of social
policies. The first category of policies undertaken was the ones that were
designed to influence and redistribute the factor income which
subsequently makes growth more effective and intensive to gain rapid and
sustainable growth. In this regard, the Chinese government invested more
capital in making labor markets more flexible and dynamic by focusing
more on human capital assets aspect than it was previously focused on
physical assets. This idea of making social change a new strong priority
helped to overturn the unemployment and underemployment status in
China over the last 25 years. This policy of public investment in
infrastructure that intended to boost productivity particularly in very low
income and poor regions produced empirical results including improved
nutrition, better sanitation, assuring basic education for all, and provision
of basic health services for all population living in rural and impoverished
regions (Jalan & Ravallion, 2002; Lin, 2004; Shenggen et al.,2002).
In post momentum of factor income redistribution policy, the chines
government introduced another programme regarding the income
transfers and mandatory insurance scheme and such programme was
financed by social contributions collected or funded by the government.
Under this programme, the major outcomes were the smoothing income
and social insurance, providing assistance to most vulnerable and deprived
individuals, and hence reducing chronic poverty. The insurance system in
China comprising mandatory pension, employment, and health insurances
were covering about 80% of the Chinese population in the 2000s (Song et
al., 2015; Yaohui & Jianguo, 2014).

71
Another major pillar of this social development was the provision of
human services to the Chinese citizens by the government or Non-
Government Organizations (NGOs), and to the employees by both public
and private enterprises. For this perspective, the government committed a
extensive range of financial transfers to poor local government
administrative entities; the typical example of this government
commitment is demonstrated by the decision taken at the 11th Congress of
the ruling Communist Party in early 2006 whereby the Chinese
government committed itself to increase the efforts to boost the provision
of human services particularly in rural areas (Lindbeck, 2006; Luo et al.,
2007).
Figure 6. Human Development Index Trends, 1990- 2017

Source: Computed from United Nations Development Programme (UNDP), (2018)
2.3.7. Pricing system

For the sake of market liberalization, the Chinese government opted for
perfectly competitive markets whereby consumers can afford cheap goods
than under controlled markets. The Chinese government then created
independent and competent utilities regulatory body for markets
regulation in order to ensure equity and transparency. It is the pricing
system which smoothened such regulation in order to ensure low prices are
determined by market prices. The Chinese government was aware that the
prices of basic consumer goods must be quite low for the improved welfare
of consumers who were, in turn, subsided in order to maintain such
equilibrium. In order to allow the shift from the planning system to a
market system, the government of China opted to introduce a dual price
system in the early 1980s (Lin, 2004) whereby the prices determination for
the same set of goods was articulated by the planning system on one hand
and by the market forces on the other hand. Within this pricing framework,
the owned state enterprises (SOEs) were allowed to purchase the given
quantities of inputs and sell given quantities of outputs at the prior set
prices. Additionally to this, every enterprise can acquisition extra quantities
of inputs and sell additional quantities of productivities at prices that were
specified by the market forces.

72
Furthermore, the dual pricing system was also transacted in the
construction of urban apartments which were supplied at extremely lower
prices. The dual price system was so far more reinforced and extended to
the transactions of both public, private and even external companies which
were permitted to build houses and apartments and sell them at relatively
affordable market prices. During that period of time, in urban areas
companies and enterprises were obliged to provide their workers with
apartments at relatively low market prices with the possibility to increase
depending on the increase in salaries and wages. The dual price system
was an economically efficient instrument in providing incentives and
subsidies for enterprises which consequently increase their profit by
economizing on costs of inputs and by the way increasing return on the
outputs (Bennett et al., 2008).
2.3.8. Development of transportation infrastructures
Over the last 35 years, the government of China has heavily devoted and
modernized public infrastructures especially the transportation
infrastructure which consisted of many highways and railways; and this
has contributed to the Chinese economic growth from late 1978 up to date
with the facilitation of admittance to markets, allowing domestic market
connections, lowering costs of production and transportation, and
upgrading China's profile and increasing its competitive advantage.
Besides contributing to economic growth, the investment in transportation
infrastructures was a key to poverty reduction by providing access to
services and economic opportunities. The Chinese government investment
in transportation infrastructure was mainly funded by the government
thanks to the Food for Work Programme which facilitated the construction
of a larger number of transportation infrastructure in poor areas and hence
creating many job opportunity for poor populations, particularly in rural
areas. Usually, the food for work programme allowed to provide free food,
cotton, and industrial products for highways workers, and such investment
was part of vast and ambitious national poverty reduction programs
constantly undertaken since the years of the 1990s particularly in what was
called the Roads Improvement for Poverty Alleviation (RIPA) program,
which is the development of rural highways (Zhou & Szyliowicz, 2006;
Brandta et al., 2016).
The development of transportation infrastructure in China was
facilitated by various poverty reduction policies and economic reforms that
occurred since 1978 and the institutional reforms including the fiscal
decentralization that took place in the 1990s, during that period of time,
Chinese economy was opened to the global market and was thus required
to have a wide range of modern and sophisticated transportation
infrastructure in order to attract many foreign direct investments (FDIs). As
a response to this, the Chinese government invested more money in the
building of new and improving existing transportation infrastructure
whereby the total investment was accounting 609.11 billion of Yuan in 2008

73
which in fact was 76 times the size of the same investment in the year of
1978 (Fan & Chan-kang, 2005).
In this development agenda, almost all areas in China can account
highways, which claimed to be most accessible means of transport than any
other transport means and thus contributed a lot in economic progress and
poverty lessening in rural settings. During the period of 1994 to 2000, the
Chinese government accelerated the construction of infrastructure for
further highway networks in order to respond to the huge booming
economy and large growing necessity of mobility thus 42,000 kilometers of
new highways were constructed every year in rural areas. In the late 2002s,
the extent of highways coverage was 1.065 million kilometers which means
they were 244,000 kilometers more than in 1995 (Xueliang, 2008; Bayane &
Yanjun, 2017).
2.3.9. Improved economic and social infrastructure
The Chinese industrial development accelerated the pace and
requirement of technological innovation and changes in economic and
social structures. Technological innovations are not only for hard structures
but also for a Soft structure which comprise of for instance the legal
framework, financial institutions, good governance and the schooling
systems (Chow, 2004; Lin, 2011, 2013).
In China, the technological innovation has been the basis for rapid and
sustainable growth for many years ago (Lin, 1995; Landes, 1998).
Investment in education and skills is most imperative than even investment
in physical assets such as machinery and plants because quality education
usually produces strong and sustainable human capital which actually
consists of people with required capabilities to absorb technological skills
and innovations, necessary factors in delivering rapid, stable and
sustainable economic growth. Investment in human capital directly leads to
the improvement of human development index as well as driving progress.
As an outcome of the investment in improving the education system, the
illiteracy percentage decreased from 22.9 to 6.7 % respectiverly in 1982 to
2000. The percentage of the Chinese populace who had secondary
education or higher education upsurge from 0.6 to 2.9 % respectiverly in
1982 to 2000; and the proportion of secondary students at schools
augmented from 8.9 to 46.0 % respectiverly in 1978 to 2000 (NBSC, 2003). In
order to stimulate economic growth, diversified labor skills are required,
including engineering, technical and vocational, machine intelligence, for
the Creation of non-farming opportunities and this programme can be
achieved through the training for youth (Lin, 2012).
Since 1978, China has created a favorable business environment which
in turn has been usually a key to attracting foreign investors who want to
safeguard that the returns of their investment will be positive. In this
perspective, strong and good governance was the ultimate guarantee of
political stability, a corrupt free system, and a low level which are also the
key drivers to the prosperous investment. However, over 35 years China
has constantly reformed its leadership and administration system by
74
softening legal enforcement of contracts, enterprises creation and
compliance with regulations in order to ensure high business profitability.
The protection of human rights has been at the heart of China’s legal
reform and the introduction of the rule of law; in this regard China signed
many international related human rights conventions, and in early 1992
when the economic reform was being deepened with very good
functioning, it was argued that many important laws were needed in order
to go by the that deepening of economic reforms, and for that perspective,
many private, public and social laws were drafted or revised and passed.
More than 300 laws related decisions based on the Chinese constitution
were voted, 700 administrative regulations were adopted by the state
council, and 6,000 local regulations were also adopted by local legislative
bodies (Yu et al., 2013).
In addition to this, enhanced institutional capacity for protecting
property rights contributed a lot to the increase of productivity and
ultimately growth. The Chinese government needed to collaborate and deal
with the global business community, particularly foreign investors through
its open door policy, and in this perspective, a large number of laws were
drafted and legislated for the functioning of the market economy. China
had subsequently made an impressive effort to modernize the Chinese
legal System and made it independent of all kinds of political influence.
2.3.10. Development of private sector and economic transformation
The creation of enabling business environment has fostered the
development of enterprises and hence facilitating the economic
transformation of China in the last three decades. In order to strengthen its
private sector, China set up the improved leadership and vision to become
a middle-income country, and this has been supported by the continuous
learning from western world experiments and innovation in order to build
a stable and sustainable economic growth.
China's pragmatic reforms since the 1980s have been providing strong
incentives and motivation for enterprise creation and retaining and
attracting back the talented Chinese people. The private sector
development strategy in China resulted in creating a lot of employment
opportunities pulling million of Chinese people from poverty for over three
decades. In China, the progress of the private sector which is at the heart of
economic transformation went hand in hand with the change from a
centrally controlled economy to the liberal economy, and agricultural
reform. In this perspective of the private sector and enterprise
developments, China set up policies targeting towns and village enterprise
creation (TVEs), special economic zones, widespread privatization of state-
owned enterprises. The progress of the private sector is a long process
which involves the creation of human and institutional capital needed for
managing enterprises for industrialization purpose.
However, the private sector development expanded and penetrated the
industries for which during the prior reform, they were characterized by
the state dominance and ownership including finance and banking,
75
telecommunications, steel, petroleum, tobacco, etc, to the extent that in 2003
such penetration was accounting around 59.2 % of China’s gross domestic
product (GDP) (OECD, 2005). In fact, the development of private sector
triggered the overhaul of the whole economic system turning from poverty
to growth and prosperity, from villages to cities, from planning or
controlled to market liberalization, from state ownership and dominance
toward private ownership and decentralization, and from isolation to
global integration. The emergence of the private sector and such economic
transformation allowed for an increase in output per capita and thus lifting
more than 500 million from poverty; the data show that absolute poor
villages level declined from 40.65% in 1980 to 10.55% in 1990 and 4.75% in
2001 (Chen & Ravallion, 2004).
2.3.11. Changes in income inequality
A serious consequence of economic progress is the deepening gap
between the rich and the poor. The increase in inequality 7% per decade
since the 2000s made China one of the uppermost inequality country in the
global with a Gini index of 50 %. Another serious difficult is that the
success against poverty has stayed geographically uneven over the
decades, where the coastal settings persisted better than inland settings,
hence leading to regional inequality (Sachs, 2005). The causes of income
inequality in China from came gaps from disparities between rural and
urban areas, a wide and complex informal sector, disparities in admittance
to education and discrimination for employment opportunities specifically
for rural migrants (Herd, 2010). Changing inequalities among the
population is new agenda for eradicating poverty in China by 2030 through
the revising a inclusive social security system elementary medical
insurance, joblessness insurance, and sustenance security for urban
residents (Xie & Zhou, 2014).
According to Sicular et al., (2017), China made remarkable progress in
lessening income inequality since 2008. However, Since the late 1970s,
China has experienced impressive changes transforming its economic
structures, institutions and social settings, and employment status.
Therefore, over the past 35 years, China recorded the most rapid and
sustainable economic growth rate in the world, but however, China's
economic growth was unevenly performed which made China the country
with the uppermost income inequality in the global. This can show by the
fact that while the annual GDP growth rate was near to an average of 10 %
amid 1985 and 2014, the Gini coefficient of income delivery augmented
from 0.38 to 0.471 for the same period.
However, in recent few years, the Chinese government has been much
more concerned to tackle this uneven income and wealth distribution issue,
and thanks to the efforts being invested deep transforming Chinese
economy, there was a significant declining trend in income inequality since
2008, whereby Between the period of 2008 and 2014, the Gini coefficient
decreased by 2.3 % Sicular et al., (2017). Further, the statistics from the two
CHIP surveys of 2007 and 2013 also confirmed that income and wealth
76
inequality declined by 3 % in the same period of time mainly owing to the
decrease income gap amid urban and rural families (Li & Sicular, 2014).
Figure 7. Income inequality, Gini coefficient for China and Rwanda, 1990-2017
3. Policies and strategies for poverty reduction in

Rwanda
Over the last two decades, Rwanda has undergone a various economic
transformation with private led development and building a knowledge-
based economy. Since 2008, Rwanda's economy has been growing at an
average rate of 7%. Apart from such growth and economic transformation,
a number of constraints including inadequate financial services, poor
quality of infrastructure and education, weak private sector,
unemployment and deficit trade balance weighted against the successful
economic growth. These constraints were the roots of poverty in Rwanda
and any policy to fight poverty should target those highlighted areas.
3.1. Historical context of poverty in Rwanda

Poverty in Rwanda dates several decades and is caused by a number of
interrelated factors such land, demography, environmental deterioration,
geographic location, bad governance as well as little and restricted sources
of progress. The socio-economic problems that Rwanda faces today are
mainly structural and inherent in the 1994 genocide against Tutsi. It is
therefore significant to investigate the case of Rwanda as special which
needs special agenda for keep on short-term involvements to deal with
emergency wants and long-term viewpoint regarding the sustainable
development goals (SDGs).
The poverty incidence in Rwanda is depth with very low agricultural
yield, starvation and cyclical droughts, low human resource development;
very restricted occupation opportunities; high populace density and
demographic pressure; poor health indicators; high transport expenses and
environmental deterioration. These microeconomic hitches give increase to
the shocking macroeconomic troubles such as operational trade
discrepancy; high exposure to terms of trade tremors owing to thick
77
reliance on only export of coffee and tea; structural unevenness between
government incomes and expenses; negative savings; and very little level
of private investment. These shocking problems and limitations have led to
persistent degradation of social welfare over time, making poverty a
extensive issue. In the early 1990s, the significance of the scope of poverty
was rising, and the headcount index was gradually increasing from 65%.
The slow economic growth and increasing income inequality have been the
roots of poverty in Rwanda from 1992 to 2007. This period was
characterized by the liberation war and internal conflicts (1990-1994),
genocide against Tutsi (1994), the refugee crisis (1994-1998). Since then, the
socio-economic conditions deteriorated very much and poverty was a very
serious issue and which called upon various government interventions.
Over past two decades, the government of Rwanda have introduced a
range of policies and strategies, which contributed significantly to the
economic performance of Rwanda, such as the performance contracts at
district levels, performance-based financing (PBF) of health services, an
upsurge in the allocation of government expenses for the health
subdivision and the initiation of compulsory mutual health insurance
scheme for all Rwandan people (Saksena et al., 2011); the transformation of
the Rwandan coffee sector allowing the increase in Rwandan exports
(Guariso et al., 2011); land tenure regularization on investments,
management of soil of biodiversity conservation measures have
contributed very much to economic growth of Rwanda (Ali et al., 2011); the
introduction of free 12 years basic education program (Nkurunziza et al.,
2012); an intensive family planning (Kabano et al., 2013), and recently a
performance base evaluation was introduced in all public institutions in
Rwanda. All of those measures have produced satisfactory results in terms
of improved health care, education for all and reduction of illiteracy for old
people where Educational attainment improved over time.
However, since 2010 Rwanda has been recording the strong economic
growth and improvements in household living standards. According to the
BNR's statistics, between 2001 and 2011, Rwanda averaged an yearly
progress rate of high than 8 %, and GDP raised by 60 % in real terms (BNR,
2010). Over the past two periods, the government of Rwanda has
substantially developed the service sector, for the purpose of economic
diversification, which made the share of agriculture in the GDP to decrease
significantly even though it remains the main pillar of the Rwandan
economy and poverty reduction as well in the fact the substantial increase
in agricultural productivity contributes to the reduction of poverty. For
example in 2011 as the effect of economic diversification, the households
earning income from non-agricultural activity increased to 70% compared
to 30% in 2001. The diversification of Rwandan economy required a huge
amount of public investments in rural areas in irrigation projects
particularly in the Eastern province and in the factories designed for the
transformation of agricultural products so that the booming agricultural
productivity. Moreover, the fertility rate has decreased over the past two
78
decades in decreasing the family size which in turn makes the poverty fall
consistently (NISR, 2012).
Furthermore, the government of Rwanda has been introducing and
implementing several socio-economic reforms for the aim of reducing
poverty in Rwandan society since 1994. Rwanda in recent years has
consistently developed and implemented its policies and strategies for
poverty reduction encompassed in the framework called the Economic
Development and Poverty Reduction Strategies (EDPRS) with sounding
sharp measures including micro-insurance programs, public works
programs, preventing and responding to macro shocks, financial distress
and environmental degradation, tackling health problems, building strong
administrative institutions for ensuring equal citizen rights, peaceful
cohabitation and conflict resolution.
The first EDPRS was launched in 2008 for the period of five years and its
implementation ended in 2012 and thereafter in 2013 after evaluating the
implementation performance and results, the government of Rwanda
launched EDPRS II in 2013 for again the period of five years which will end
in 2018. Regardless of the big lessening in poverty over the past two
decades, poverty is still high 39.1% of the Rwandan population still lives
under the poverty line and 24 % cannot encounter for their most
rudimentary food wants, which means that Rwanda has a lot to do in the
perspective of poverty reduction (NISR and MINECOFIN, 2012). Therefore,
they are various reasons why Rwanda can learn from China in terms of
poverty reduction policies and strategies. Chine started by reforming rural
areas through land redistribution and investing in agricultural
infrastructure, developing agricultural technology, promoting science and
technology, decentralization of powers and authorities to local government,
developing global networks and opening its economy to international
trade, etc.; those practices are very similar to the ones that Rwanda has
been designing and implementing over past two decades.
3.2. Rwanda’s vision 2020

Rwanda’s Vision 2020 programme aims at making the country a middle-
income knowledge-based economy and more prosperous, with high life
expectancy, healthy people, educated people, and GDP per capita income
of $ 900 by 2020. To achieve this objective, it is important to put more focus
on a active and innovatory private sector, quick knowledge and technical
and vocational training, good governance, smart public finance
management and a receptive and powerful public sector as a crucial
devices for economic conversion (GOR, 2000).
The Poverty Reduction Plan is prepared based on Rwanda's
longstanding vision, interlocked in the Vision 2020 which includes the
thematic areas including good governance, macroeconomic stability,
human resource development, increasing productivity and employment
opportunities, promoting regional integration and open market economy
(Mann & Berry, 2016). Some of the Vision 2020 achievements indicate that
79
the previous target of GDP per capita of $ 900 which was set in 2008 was
then revised in 2012 to be $1,240, due to favorable conditions and positive
perspective. In the similar epoch the average GDP growth rate of 8% per
year, life expectancy reached 55 years, infant mortality rate was declined
from 107% to 50%, maternal mortality rate was reduced from 1,070 to 200,
the population in extreme poverty was decreased from 64% to less than
10% , child malnutrition was reduced from 30% to 10 % of the population,
basic education enrollment increased from 72 to 100%, and the enrollment
in tertiary education was increased from 1% to 6 %, gender balanced in
decision-making institutions increased from 10% to 40%, HIV/AIDS
prevalence rate was decreased from 13% to 8 %, malaria-related mortality
rate was decreased from 51% to 25%, the growth rate of the industrial and
services sectors increased from 7% to 11 % and off farming jobs increased
from 200,000 to 1,400,000 per year (GOR, 2000; MINECOFIN, 2007).
Figure 8. Trend of Rwanda GDP per capita (Constant 2010 US $)

3.3. Rwanda’s economic development and poverty reduction

strategies
EDPRS stalks from Rwanda's Vision 2020 and encompasses medium-
term activities which have to drive to the accomplishment of the Vision's
objectives. The major aims of the vision is to accelerate Rwanda's
development to become a middle-income state and generate a good quality
of life for entirely citizen via continued average GDP growth of 11.5% and
enhanced poverty lessening to be lower than 30% of the populace by the
year 2020 (MINECOFIN, 2013).
The EDPRS is an important instrument for poverty reduction. The first
EDPRS was covering the period of 2008-2012 defining the country's
developmental objectives, high preferences, and strategies to accelerating
the private sector development which will accompany the government and
remains the major player and catalyzer for the economic growth. The
EDPRS I was fully supported by Rwanda's development partners and it
was designed to extend the PRSSP-III in order to enhance the three
priorities areas such as growth for Jobs and exports; improved governance
80
and leadership, Vision 2020 Umurenge designed to impact rural
development and hence poverty reduction; all for the end aims of reducing
shocking poverty and inequality (MINECOFIN, 2013).
The continuous progress for Jobs creation and Exports leading aims at
boosting economic progress by improving competitiveness, private
investment and novelty, agrarian production, exports, and technology
competencies. These need quit ambitious procedures to lesser the expenses
for conducting business counting improvement of technical abilities and
upgrade the schooling in science and technology to lessen the scarcity of
trained labor and to increase private sector competitiveness capacity. Other
urgencies comprise upgrading economic infrastructure, upgrade of the use
of updated technologies, machine intelligence and expanding the financial
division.
The Vision 2020 Umurenge is a major pillar for poor rural development
and aims at addressing the extreme poverty and vulnerability. And that
vision has three constituents: (i) public works which intend to make non
agricultural work opportunities and the constructing of community
properties and rural basic infrastructures; (ii) development of cooperative,
and small and medium-sized enterprises (SMEs) to promote private
enterprise; and (iii) providing social services and support to the landless
households that are incapable to involve in public works agendas (RLDSF,
2012).
The prize of Governance and leadership aims at maintenance of peace
and security; building strong and capable institutions; upgraded
corabollation with entirely countries; advertising of equity and social
justice, human rights and the rule of law; and delegation and service
conveyance. It, however, accompaniments other continuing plans intended
at making well-defined property rights, business enabling environment,
well-organized public management, and the fighting against corruption
(MINECOFIN, 2007). The EDPRS II of Rwanda is divided into five main
clusters along with each cluster outlining its priority areas: Economic
transformation, rural development, production and younger generation
employment, responsible governance, foundational and cross-cutting
matters (MINECOFIN, 2013).
The objectives of EDPRS I was, therefore to speed up growth and
economic diversification with private sector led development, and
decentralization of governmental administration in order make people
participate in the decision-making process, accompanied by enhanced
accountability. Since the launch of EDPRS, I in 2008, living conditions for
Rwandan have been improving dramatically follow-on important
reduction in poverty and income inequality. The household consumption
increased by 2.5% per year and income inequality decreased by 44.9% in
2011 (NISR, 2012).
Under EDPRS I, tremendous socio-economic achievements have been
made. The economy raised sharply, accompanied by important poverty
lessening. Economic progress was motivated by an upsurge in agricultural
81
production, exports, and robust domestic demand. For a period from 2008
to 2012, the real GDP growing with an average of 8.2% per annum, with the
per capita growth of 5.1% per annum. The increase of service sector output
has been the core driver of economic progress in Rwanda under EDPRSI.
The main areas of services expansion include telecommunications,
wholesale and retail trade, and transportation. The service sector raised by
an average rate of 10.0% per annum and contributed nearby 52% of
national production throughout the EDPRS 1 period. The development of
the service sector in Rwanda under EDPRS I considered for over half of
total GDP progress of 53%. The industrial development was a key driver of
Rwanda’s economic growth whereby the industrial sector which has been
growing at a rate of 9.8%, and contributed to the extent of 15.4% of national
output and 20% of total growth for EDPRS I period. The agriculture
industry grew at 5.4% through the scaled-up public investments for
instance the crop-intensification programme (CIP), and the farming sector
yielded 32.7% in GDP and 28% of total progress for the EDPRS I period.
During such period, income inequality reduced significantly from 0.52 to
0.49 Gini coefficient (NISR, 2016).
Thanks to impressive success and the experience gained from EDPRS I,
the government of Rwanda launched the second phase of EDPRS in 2013.
The EDPRS II (2013-2018) focuses on four priorities including economic
transformation which is designed to stimulate rapid economic growth with
targeted 11.5% of growth rate and hence change Rwanda’s economic
structure; rural development which aims at upgrading the livings of rural
populace across land consolidation and rural settlements, agriculture, rural
finance, youth employment through jobs creation by increasing the shift
from agriculture to services or non-farm jobs and shaping the competitive
skilled labour, and good governance which focuses on public
accountability, transparency, and effective service delivery. The
emblematic goal of EDPRS II is all about accelerating progress towards
making Rwanda a middle-income country and a good living condition for
the whole Rwandan population and accelerate poverty decrease trend to be
low than 30% of the populace of Rwanda. This goal will undoubtedly
achieve thanks to the fact that the government is fully committed and
determined to that goal as it demonstrated by the gradual increase in
national budget from $260 million in 1998 and $1,768.3 billion in 2015- 16
fiscal year whereby 64% of the national budget was domestically financed,
and recently the national budget for the 2017-18 fiscal year is 80%
domestically financed (MINECOFIN, 2013).

82
Figure 9. Situation of Rwanda’s Poverty Reduction in Rwanda

Source: Computed from National Institute of Statistics of Rwanda (NISR),(2015)
3.4. Understanding Rwanda’s economic growth patterns since the

2000s
Rwanda's economic growth is just explained by many factors including
the strengthened private sector development, counting the progress of
socio-economic infrastructure, liberalization of trade, and restructurings
and capability improvement in PFM, restructurings focused on upgrading
the business environment, promotion of the exports sector and
privatization of state- owned enterprises. The Rwanda’s economic growth
success was driven by sharp development of private sector, particularly the
progress in the services sector where growth of 40% of growing in real
Gross Domestic Product (GDP) went beyond the government’s
expectations. Another driver of Rwanda’s economic growth is the increase
in agricultural output since 2008 accounting for 20% of the total increase in
consumption.
The large finance injection of Official Development Assistance (ODA) to
Rwanda and the overhaul in agricultural activity, construction, and
services sectors were the major key drivers to the Rwandan economic
growth. The construction sector has been the more driver growth and
employment, and itself accounted for 6 % of GDP and it raised at 10 % per
year during the previous decade. Transport, communications, and tourism
were also other major engines of economic progress over the last decade. In
addition to this, the joining of East African Community (EAC) created
numerous growth opportunities especially in the agro-processing and
manufacturing industries, and transborder commercial activities, this
regional economic integration contributed to the level of 14 % of nominal
GDP in 2007 and hence made Rwandan economy to be much competition
(RoR, 2017). The rapid growth and expansion of the Rwandan economy
also were due to the large increase of public investment over the last
decade which contributed a significant share in GDP growth to 20 % of
GDP in 2000 and to 26 % in 2007 (World Bank, 2016). The public
investments were largely supported by snowballing domestic resource
enlistment and an increase in outside support. The key priorities in public

83
expenditures include infrastructure and human resource development,
strengthening public administration, military and security system. Since
the creation of the Rwandan Revenue Authority in 1997, considerable
efforts were made in snowballing government incomes, from 11.4 to 13.7 %
of GDP respectiverly in 2001 to 2007, and to 13.9 % in 2008, thus
subsequently reducing the dependence on international aids (MINECOFIN,
2012).
The economic growth in Rwanda since the 2000s has led to an increase
in employment opportunities, agricultural production. Agriculture output
increased from 18% in 2006 to 25% in 2011. This increase in agricultural
productivity continues to contribute so much in elevating the standards of
living for many Rwandan population over the last decade, and thus this
social improvement was accompanied by a significant fall in poverty and
inequality with the Gini coefficient decrease throughout Rwanda, from 0.52
in 2006 to 0.49 in 2011 (NISR, 2012; World Bank, 2016; World Bank, 2013)
Figure 10. Contributions of Rwanda’s economic sector to GDP

3.4.1. Governance and leadership

The Government of Rwanda adopt a strategy of zero tolerance
concerning corruption and Rwanda ranks better in the world but however,
it is still needed to reinforce governance leadership, however much more
necessities to be done in the domaine institutional capacity development. A
key area of governance improvements in Rwanda has been Public Financial
Management (PFM) whereby improvements focus on skilss development
for accounting, auditing and supply chain management, and
administration of public investment at different levels of government. The
Government has taken serious measures to reform its key public
institutions in order to improve the service conveyance to the private sector
including (i) merging in 2008 several government institution in one entity
called “Rwanda Development Board”; (ii) creation of Commercial
Registration Services Agency (CRSA), (iii) streamlining land registration
transactions through a newly created Office of the Registrar of Land Titles;

84
and (iv) establishment of agencies incharge of promoting investment and
exportation activities (Richard et al., 2013).
The decentralization Policy of the government of Rwanda is a
paramount factor of good and sustainable governance. To build a flexible
governing system allowed very much the monitoring and accountability of
public servants' action through service charters. The government efforts in
promoting transparent and accountable governance system were sustained
by a number of government policies which in turn produced great results
in terms of the country's competitiveness, economic growth and the public
sector’s effectiveness. These tremendous efforts allowed Rwanda to be
ranked 7th most efficient government globally in 2015, and in the same
year Rwanda was classified among the seven least corrupt countries in
Africa (WEF, 2017). According to the assessment done by the Rwandan
Governance Bord on leadership efficiency, corruption level, transparency
and accountability in the public sector, Rwanda gained 79.04 % of positive
view and progress (RGB, 2014).
Figure 11. Rwanda’s Controle of corruption, Political stability and absence of violence
Source: Computed from World Bank, (2018b)
3.4.2. Social and human development

Whereas Rwanda’s social indicators remain weak and a lot of
improvements still to be made, remarkable improvement has been
achieved since the late 2000s in various domains counting gender equality,
adult literacy, admissions in primary and secondary schooling, basic health
services, and the deterrence of the spread of HIV/AIDS. The involvement of
women in decision-making institutions and in other positions of influence
is now about 60 %, and education for all in primary and secondary
education with the initiation of free and compulsory twelve years basic
schooling has increased to above 90%, with equality amid boys and girls
(United Nations, 2015). Free and compulsory vaccination rates for children
and other trends of are trends under the Millennium Development Goals
(MDG) have been among the highest in sub-Saharan Africa. In general
poverty incidence and extreme poverty decreased from 60.4 per cent in

85
2000/2001 to 56.9 per cent in 2005/2006, a decrease of 3.5 % points and 41.3
% to 36.9 % in 2005/2006, the inequality as measured by Gini coefficient
was slightly increased from 0.47 to 0.51 respectively in 2000/1 to 2005/6
(NISR, 2007). The current speeding up of economic progress,
predominantly in the agrarian sector, and the adoption of social protection
plans in EDPRS, are predictable, with donor funding.
The home grown solutions such as “one cow per family programme” which
was initiated and launched by H.E Paul Kagame the president of Rwanda
in 2006, is aimed at enhancing social protection and thus fighting against
the severe malnutrition especially among the children and as a mechanism
to reduce poverty in rural areas and boost agricultural output, and thus
contributing to improve the livelihood and nutrition among rural poor
population. The majority of Rwandan population is still living in rural
areas whereby 85% of the people live in rural areas with around 80% solely
live on modest agriculture for their livelihood (NISR, 2012; Bizimana et al.,
2012). Around 350, 000 cows have been distributed by 2017 (RAB, 2017).
However, In 2003, the government of Rwanda introduced the famous
countrywide Community-Based Health Insurance Scheme which
significantly contributed to the upsurge in admittance to health care and
make poor Rwandan people afford health care. Adhesion to this scheme is
family based, where compulsorily all family members have to be enrolled.
The ministry of health of Rwanda reported that in 2010, the coverage of
Mutual Health Insurance attained the level of 91 % (Makaka et al., 2012). In
2009, Rwanda introduced the free and compulsory 9 Year Basic Education
(9YBE) for all young children between the age of 7 and 15, and as result, the
primary school enrollment rose to 91.7% (Action Aid, 2012).
Rwanda has continuously made dramatic improvement in terms of
welfare, schooling, and healthcare. In 2015, Rwanda performed well in
health improvement, scoring 85.1 and ranking 7th in Africa. Rwanda has
the highest primary and secondary schools enrolment rate in Africa and is
one of the best-performing countries in fighting against corruption in
Africa. Rwanda has been making numerous social changes by investing in
people as its important resources, and in 2015Rwanda's education scored
84.75% points (RGB, 2014; WEF, 2015).
3.4.3. Public investments management
Through the EDPRS, public investments to, amid other goals, upgrade
infrastructure development and decrease the expense of conducting
business, the administration of public investments has arisen with a high
significance action in the restructuring agenda of the government of
Rwanda. In early 2009, a new public investment policy that was put in
place with the aims of selecting and implementing rational public
investment projects. As a result of this policy, public investments have
grown quickly, funded by snowballing domestic resource mobilization and
outside funds (IMF, 2011).
The report from the World Bank show that the stock of external private
capital augmented from $ 1,404.1 in 2013 to $1,752.0 million in 2014. FDIs
86
has become progressively significant as a most important source of
investment funds accounting for 22.1% of Gross Fixed Capital Formation
(GFCF) in 2014 from 16.7 in 2013. The FDIs contributed to the Rwandan
economic growth to the extent of 14.1%. In 2014, Foreign Private
investment was driven by ICT, Mining and Finance and Insurance
activities, with 70.2 % for the total inflows in GDP (World Bank, 2015).
According to the WEF report (2015) on doing business and global
competitiveness, Rwanda was among the leading economies in Africa in
policy and structural reforms. Open Knowledge International's Global
Open Data Index (2015) ranked Rwanda as a country with the most
available open government in Africa. In 2016, it was noticed that Rwanda
has created the most favorable business environment with simplified
modalities for registering and starting new businesses, reducecd time for
issuance of various permits. Access to credit and financing were also eased
by permitting banks the right to scrutinize credit situation of all borrowers
and the loans granted be reported to the BNR. Further, Rwanda decline the
number of required trade papers and improved its joint border movement
procedures through ICT (WEF, 2016).
Figure 12. Rwanda’s FDIs, net inflows (% of GDP)

4. Policy lessons from China for Rwanda

After having understood China's successful reforms and fight against
poverty, we need to draw some lessons from China’s poverty alleviation
strategies for Rwanda, it is noteworthy to know that China is dissimilar
from Rwanda especially in the size, many natural resources, better
geographical location, the high rate of economic progress realized in the
previous 35years, and a substantial industrial development, high
innovations and creativity with a robust leadership managerial system, the
capability to organize resources for poverty lessening programmes.
However, Rwanda has made considerable progress in fighting against
poverty it is on the right track in terms of development since 1994s, it is
lagging behind China and other many other emerging Asian economies.

87
4.1. Lessons for Rwanda: Economic development strategy and
enabling environment
In general China’s economic development approach and additional
connected policy measures such as reforms in strategic markets and
institutions served as the cornerstone for poverty lessening fight in China.
In overall, the China’s poverty decrease strategies and schemes have
focused in every single very poor rural area of the state and made China’s
economic progress more pro-poor. Therefore, China’s stable and
sustainable economic growth can serve as an economic role model for
Rwanda in many different ways for the poverty alleviation purposes.
China's advance strategy over 35 years encompassing growth of
agriculture set as a precedence at little levels of incomes and a opportune
move to labor-intensive production industries. In the early 1980s, China
started to promote township and key village projects, and in the same
period it then create special economic zones in Shangai and Shenzhen and
a number of other sites to stimulate foreign direct investments (FDI) to
develop labor-intensive production industries and technology transfers.
Rwanda can follow the Chinese economic development model putting
more efforts into attracting FDI which in turn provide unlimited labor
supply and are very important in boosting economic growth and exports
(Chen et al., 2015). It is in this perspective that Rwanda has improved
private sector progress, counting the enlargement of socio-economic
infrastructure, liberalization of trade, and reforms and capacity
development in PFM, upgrading in the business environment, promotion
of the exports area, privatization of state-own enterprises, and intensifying
reforms in different domain in line with poverty reduction.
Rwanda needs to learn from China whereby the development strategy is
based on political stability, economic and conducive socio-economic
environment. However, the agricultural reforms for poverty reduction
have been the most successful and catalyzer in the economic growth of
China. Ravallion & Chen, (2007) indicated that the Chinese agricultural
growth is appraised to have donated four times more to poverty lessening
likened with the increase in both manufacturing and in services; and
similarly Rwandan agricultural growth supply more to poverty reduction
than growth driven by other economic sectors such as services and
manufacturing (Diao et al., 2010).
The quick agrarian growth in China since late 1970s has been
determined by a number of sharp measures such as redistribution of
resources from heavy weight industries into farming subdivision and
following with upsurge in farmhouse prices, distribution of agricultural
land to individual households, and boosting in the volume of agrarian
inputs such as fertilizers, chemicals, plastic films, electricity and
complemented by strong irrigation system. Agricultural development in
China has also been powered by a huge and enabling internal market for
agricultural produce and effective pricing system. Given the upsurge in
agricultural production and incomes, the rural areas population in china
88
were stimulated to differentiate their actions into non-agricultural activities
for the purpose of increasing their income (Ling et al., 2013).
In line with agricultural development and transformation of rural
household revenues, a various valuable lessons from the quick
development of agriculture which contributed to poverty alleviation in
China can be pinched for Rwanda. China’s poverty lessening programs
have a robust emphasis on rural settings and agrarian development has
been led by the government. An increase in the reallocation of resources to
agriculture industry for instance investment in irrigation and rural roads,
and upsurges in farmhouse prices for agricultural products and hence
incomes. Moreover, enabling and supporting internal market is also
essential to safeguard farmhouse prices through government backing, for
example the subsidies on farmhouse input, government investments in
rural infrastructures, homebased price assistance and trade safeguard
which are important ingredients for agricultural growth and poverty
decrease.
Following the contribution of farming to poverty lessening, at low-
income levels the poverty alleviation programs should focus first of all on
agrarian development, especially agrarian growth in the poor and remote
areas. Therefore, given the upsurge in revenues, more focus should be
attributed to the improvement of manufacturing industries and service
sector so as to expand farmhouse incomes and offer a feasible market for
sustained agrarian development.
China's open door policy constitutes a major lesson to draw for Rwanda,
whereby it important to create local foreign trade corporations and then
decentralize the decision making process about exports and imports to
local administrations or such external trade corporations. It is also
necessary to create and many special economic zones and border open
cities for the intention of attracting exports and FDIs. It is also necessary for
Rwanda to introduce tariffs, quotas, and licensing and lessening or
removing all restrictions on exports and imports. Further, it is also
worthwhile to smooth and liberalize foreign exchange.
China's growth is on a gradual track than any other country in the
world. Chine is heavily investing in research and development, placing
creativity and innovation any the center of its development. The Chinese
public expenditure on research and development accounts for 15% of the
world's total, and Rwanda needs to learn from this impressive Chinese
development practice.
Rwanda must learn from China on how to address the constraints of
productivity through fiscal and financial dressing in order to have rapid
and sustainable growth. China has gained a high increase in productivity
through the development of the agricultural area, accompanied by the
development of township and village enterprises and restructured of state-
owned enterprises. Rwanda can strengthen its manufacturing and service
sectors, develop its agro-food processing industry, expanding exports of

89
vegetables and beverages and diversifying through exports can support
Rwanda to upsurge productivity and scale up into worldwide markets.
The productivity and economic growth in China have been
tremendously pro-poor and sustained by sharp market reforms, and the
improvements in agriculture and service sectors can help Rwanda reduce
poverty. In order to have rapid and sustainable growth and eradicate
poverty, Rwanda needs to learn from China, by engaging in the
development of human capital with intensive and continuous investment
in education and improving quality of education so as to produce the
required skilled labour force, especially in core fields such science,
technology, engineering, and mathematics (STEM). Another important
focus for Rwandan human capital development is technical and vocational
education and training (TVET), filed in Rwanda needs to continue
supporting and develop. China’s achievement in increasing the skilled
labor force required to adopt various types of technology, and thus create
the conditions for investments in manufacturing, especially in this domain,
Rwanda has a lot to absorb from China's experience in order to implement
new technologies and thus create jobs and hence diversify its economy. In
order to sustain growth and human capital, it is important to have a viable
health system. In this regard, Rwanda needs also to learn from China
experience of having high-quality healthcare and broadening health care
accessibility, especially in rural areas.
4.2. Lessons for Rwanda: Particular poverty policies and projects

The Chinese government played a key and distinguished role in poverty
alleviation and economic development. The successful poverty lessening
strategies and programs in China have been distinguished by the
government's solid commitment and will power in fighting against poverty
and the government's ability in call up a big amount of resources for
poverty lessening programs. In addition to this, the government-led
poverty reduction has been fuelled by the establishment and performance
of solid poverty reduction institutions and a snowballing amount of
supports earmarked by the government for poverty reduction through well
managed of poverty reduction funds. The market liberalization pointed out
the best interests of poor people China's success against. In support of this
policy, the farmers were given market incentives included in the
institutional reforms. However, Rwandan farmers can dramatically
appreciate this good policy (Qu, 2017).
China’s poverty lessening strategies and programs are singularly
distinct with government-led and development-oriented, pick out the very
poor countryside settings and poor families, focusing on countryside
infrastructure projects. China has performed a foremost role in poverty
lessening by deploying resources for poverty decrease and instituting
particular national poverty institutions, and the government is competent
of pledge large-scare poverty alleviation projects as a result for reducing
poverty occurrence significantly in a comparatively to small period.
90
Rwanda can study from the Chinese performance by creating particular
institutions for poverty reduction and by distributing more funds for
countryside development and poverty decrease programs. The government
of Rwanda can reinforce its public administration system for improved
project management dimensions by establishing specially designed poverty
reduction institutions with specialized skills and continuous training in
poverty reduction strategies rather than be contingent mostly on outside
consultants.
An effective lesson that Rwanda can learn from experience of China is
that for poverty reduction programs directly pick out poor families is more
operative than indirectly pick out poor households via rural enterprises
which offer occupation occasions for poor families, as they will be
additional expenses for monitoring the poverty effects of the enterprises.
Additional lesson connected to enterprise development in China is that
the government poverty programs can emphasis originally on small-scale
agro-processing enterprises used by domestic farmers equipped with the
basic manufacturing technology and administration competence in the
poor settings. The delivery of financial assistance for instance subsidized
credits should be accompanied by technical teaching and administration
support. As countryside infrastructures are important for income-
generating doings handled by poor families, the major part of Chinese
poverty supports has been utilized for countryside infrastructure projects,
mostly on countryside roads, upgrade of land, potable water, and
irrigation, that has donated a considerable deal to an upgrading in
agricultural production and family incomes.
The poverty reduction institutions in China have also operated with
poor families on biogas and sun stoves by offering funds and technical
provision, in this perspective, Rwanda has also created the Business
Development Agency (BDF). Rwanda has to consider that a greater amount
of poverty lessening supports are necessary to be distributed to countryside
infrastructure plans, particularly on countryside roads, upgrading of land
and irrigation, so as regards to offer marketplace admittance and essential
environments for farming productivity for poor how valuable lessons for
Rwanda.
The government of Rwanda should always make need assessment for
development and poverty projects. The Chinese performance in poverty
reduction also indicates that even at little levels of revenue, with very
limited government economic means and shocking large-scale poverty,
development-focused programs pointing poor settings can be successful. It
is significant to note that in order to allocate effectively and efficiently the
scarce resources, it is a must to improve the production conditions.
However, with the decline in poverty incidence and increases in income,
poverty programs would be constantly targeting more poor societies and
poor persons, straight revenue transfer can also be initiated and more
determinations should be formed to shape the capacity for the poor groups
and poor persons.
91
4.3. The lesson for Rwanda: Learning for innovation and capacity
building
The central significance of human capital and capacity building for
poverty reduction and sustainable development and for the sake of
building a harmonious society, China has implemented development-
oriented poverty reduction projects which are consistent with the scientific
and technological advancement. Research in science and technology played
a key role in poverty reduction in China. In the early 1980s, the publicly
funded autonomous think-tank group and much other influential research
in the reform process were created, studying the local experiment and
merits with the Household Responsibility System (HRS) that in provided
recommendations that convinced national policymakers on the motive of
scaling up. China's pro-poor policies depend on the level of empowerment
and participation of poor people in the reform process. Since the late 1970s,
China has built and maintained a strong public administrative system to
make a global capable state. Indeed, the administration and leadership of
townships and rural villages have been more accountable for their
economic development (Herbst, 2000; Clapham et al., 2001; Van de Walle,
2001).
4.4. The lesson for Rwanda: Asset creation

The development necessitates investment in physical capital for instance
the plants, machinery, raw materials, etc. these are fundamental to
industrial production. Investment in significant technology and machine
intelligence is also significant due to the fact that technology is frequently
personified in capital goods for example plants and machinery. Growth is
ultimately linked with the investment in capital and labor and upgrading
the output from these factors of production via the procedures of
innovation and technological assimilation. However, possessing the assets
such as land, machinery, property, plant & equipment perform a key role
in increasing the opportunities for development and access to finances
which in turn can allow more households the opportunity to invest.
The land settlement should be regarded as most important in reducing
rural poverty, and China proceded for the distribution and consolidation of
land which consequently brought a qualitative change in incomes of the
countryside populace because rural poverty is usually mostly observed
among the landless and small farmers. Rwanda largely possesses poor
physical infrastructure, while are very crucial to growth. In this regard,
impressive lessons are to be drawn from China’s advancement in physical
infrastructure through dramatic investment in physical capital for instance
roads and highways, railways, and telecommunication assets (Rosen &
Hanemann, 2009).

92
4.5. Rwanda and China poverty cooperation focus areas
Poverty collaboration between China and Rwanda is a reciprocal
studying process even it uneven and imbalanced. There is now a extensive
range for Rwanda-China collaboration in poverty decrease. The Chinese
Government has started providing development and technical and
financial assistance to Rwanda by supporting agricultural projects and by
offering loans and grants, scholarships for long-standing and short-course
training for expertise sharing. China is increasing its support, trade and
investment plans which as well have poverty impact in Rwanda. As China
is strengthening its global influence, there is, yet, a hope for upgrading on
the current collaboration, and more significantly, there will be boundless
prospective for increasing poverty collaboration between China and
Rwanda.
A more systematic knowledge sharing and technology transfer should
be more essential and the starting point for poverty cooperation between
Rwanda and China. It vital to expand the effectiveness of the short-courses
and long-standing training for Rwandan youth whereby the development
professionals and experts from China, who generally have skills on China’s
poverty lessening and development involvement or on sure practical field,
may have inadequate information of poverty in Rwanda, Alternatively, the
professionals from Rwanda can discover it hard to comprehend the definite
Chinese strategies and programs for poverty reduction. This is why a
mutual cooperation and learning from each other between Rwanda and
China is necessary. The hands-on training focus on the function of farming
expansion services, progress, and administration of small-scale countryside
enterprises, medical and agrarian insurance for the countryside poor,
building and maintenance of minor countryside infrastructure plans,
construction of township and key village projects, intrinsically technical
familiarity can be used more straightforwardly in Rwanda. The cooperation
between Rwanda and China will definitely focus on providing support to
the knowledge platforms and centers of excellence between the two
countries as a means of speeding up the exchange of technology especially
in the agricultural sector.
As we have discussed before, China needs to cooperate with and learn
from Rwanda in particular and Africa in general. Rwanda has marked
higher growth performance in the last decade towards improved economic
governance. The new cooperation prospects between Rwanda and China is
being dictated by the increasing demand for natural resources from
emerging economies including China. As Rwanda has a major deficit in
infrastructure, the top priority must be given to the development of rural
and urban infrastructure as the calyser of regional and African integration
needed by the African Union, it is important to stress that thanks to that
urgent growth of development infrastructure, China will be the top service
provider and development partner. The collaboration between China and
Rwanda should be reinforced in terms of direct investment and trade, the
Chinese Government should offer further technical and financial assistance
93
for poverty lessening in Rwanda throughout augmented training and
capacity building exercises, collaborative research and discussion and
throughout improved support effort in poverty alleviation for Rwanda.
Recent Forum on China-Africa Cooperation (FOCAC) highlighted the
major areas for Africa-china cooperation including trade and investment,
China-proposed belt and road initiative, youth employment and
development, poverty alleviation, exchanges in culture and art, education,
sports, strengthening the media, women and young people, sharing of
knowledge, develop and strengthen institutions and governance,
promoting peace and stability in Africa, environmental management (H.E
Xi Jiping opening speech, 3rd September 2018).
5. Conclusion and policy recommendation

5.1. Conclusion
China’s poverty reduction strategies and programs for poverty
reduction over the last 35 years have been miraculous. This dramatic
progress against poverty in China was induced by a high speed of
economic development, pro-poor growth strategies and the government's
strong commitment against poverty. The Chinese government-led poverty
programmes have had a substantial influence on the increase of incomes
and capabilities of the poor communities and poor persons in rural areas.
Throughout a procedure of studing and capacity building and via the
collaboration with global development partners, China’s poverty reduction
policies and programs have become more sharing and demand-oriented,
with an snowballing prominence on capacity building for the poor societies
and poor persons, and for poverty lessening agencies.
As long as the eradication of poverty is a serious concern for Rwanda,
learning from China has got important implications for Rwanda fighting
against poverty. The government-led and development-targeted poverty
programs have donated to poverty lessening in China by upgrading
countryside infrastructure and hence enlightening the production
situations in poor rural settings. The government poverty programs have
also delivered small-credits and workshops to the poor, which stretch to
increase their revenues and enhance their capacities. It would naïve to say
that Rwanda can copy and paste all China's growth and poverty reduction
experience because they have a different history, culture, and geographical
settings, but however it has to create its own conditions or continue
homegrown solutions to define its own growth path.
5.2. Recommendations
Rwanda and China have to deepen economic reforms by restructuring
their economies and facilitating the broad pro-poor growth. The effective
attraction of foreign direct investments (FDI) is a major weapon to
galvanize economic growth and encourage affordability, which is essential
to promote integration into the worldwide economy. In addition to this,

94
FDIs are usually fostered by novel technologies and strong management
skills that strengthen economic transformation. It is also important to
explore and take advantage of lucrative foreign markets by increasing
participation in the global economy. Rwanda must diversify its economy in
order to deepen economic transformation important to inclusive growth
and poverty lessening catalyzed by industrialization. The development of
social and physical infrastructure is important to sustaining economic
progress and poverty reduction and should be set among top priorities.
Rwanda itself should learn from the Chinese approach to setting short-
term priorities for poverty reduction and sustainable progress. It is
therefore important to stress that implementing policies that aim at
increasing households income, creating more employment opportunities,
agricultural productivity, rural recapitalization would extend services and
support, countryside credit and financial services to micro and small-scale
enterprises which are key to rural poverty eradication.
Rwanda should continue strengthening schedules to upgrade the
standard of life of the poor and stabilize lives of the populaces in the rural
settlements by safeguarding admittance to elementary health services,
primary schooling, water and sanitation facilities, energy and housing
facilities. Another Chinese example which can serve as an important
recommendation for Rwanda is the establishment of training and
occupation opportunities for unqualified younger generation and
enablement of the trained youth to involve in income-generating doings.
Beyond the middle to longer term, it is indispensable to expand the
economy and to increase the proportion of productive investment in
Rwanda in order to attain sustainable progress and poverty lessening. The
rate of savings must be increased in order to boost domestic investment,
Attracting foreign investors must be strengthened. More specifically, efforts
must be concentrated on high influence productive ventures which can
lead to the real transformation in a comparatively short period.

95
References
Action Aid. (2012). Aid Effectiveness in Rwanda: Who Benefits? Institute of Policy Analysis
and Research – Rwanda. [Retrieved from].
Albert G.Z. Hu; Gary H. Jefferson. (2008). Science and technology in China. In L. Brandt & T.
Rawski (Eds.), China’s Great Economic Transformation. Cambridge: Cambridge University
Press. doi. 10.1017/CBO9780511754234.010
Ali, D.A., Deininger, K., & Goldstein, M. (2011). Environmental and gender impacts of land
tenure regularization in Africa: Pilot evidence from Rwanda. World Bank, Washington, DC.
doi. 10.1016/j.jdeveco.2013.12.009
Bank, W. (2001). China: Overcoming Rural Poverty. The World Bank, Washington, D.C.
Bayane, B. M., & Yanjun, Q. (2017). Transport infrastructure development in China. Journal
of Sustainable Development of Transport and Logistics, 2(1), 29–39. doi. 10.14254/jsdtl.2017.2-
1.3
Bennett, J., Dixon, H., & Hu, H. (2008). The effect of reform of the Chinese dual-track price
system john. CEDI Discussion Paper Series, No.08-14. [Retrieved from].
Bizimana, C., Usengumukiza, F., & Kalisa, J. (2012). Trends in Key Agricultural and Rural
Development Indicators in Rwanda. [Retrieved from].
BNR, National Bank of Rwanda. (2010). Rwanda annual report 2010. Kigali, Rwanda.
[Retrieved from].
Bo Q. Lin. (2003). Economic growth, income inequality, and poverty reduction in people’s
Republic of China. Asian Development Review, 20(2), 105–124.
Brandt, L., Ma, D., & Rawski, T. (2016). Industrialization in China, IZA Discussion Paper, No.
10096. [Retrieved from].
Brandt, L., & Thun, E. (2016). Constructing a ladder for growth: Policy, markets, and
industrial upgrading in China. World Development, 80, 78–95. doi.
10.1016/j.worlddev.2015.11.001
Brandta, N.B.-S.L., And, J.V.H.M.A.T., & Zhang, Q. (2016). Roads, railroads and
decentralization of Chinese cities. Review of Economics and Statistics, 99(3), 1-53. doi.
10.1162/REST_a_00660
Chen, G., Geiger, M., & Fu, M. (2015). Manufacturing FDI in Sub-Saharan Africa: Trends,
Determinants, and Impact. Washington, DC: World Bank Group. [Retrieved from].
Chen, Q., Goh, C.-C., Sun, B., & Lixin Colin X. (2011). Market integration in China. World
Bank Working Paper, No.5630. [Retrieved from].
Chen, S., & Ravallion, M. (2007). Poverty and hunger special feature: Absolute poverty
measures for the developing world, 1981-2004. Proceedings of the National Academy of
Sciences, 104(43), 16757–16762. doi. 10.1073/pnas.0702930104
Cheremukhin, A., Golosov, M., Guriev, S., & Tsyvinski, A. (2015). The economy of people’s
Republic of China from 1953. NBER Working Paper, No.21397. doi. 10.3386/w21397
Chow, G.C. (2004). Economic reform and growth in China. Annals of Economics and Finance,
5(1), 127-152.
Clapham, C., Rozes, A., & Clapham, C. (2001). Features rethınkıng Afrıcan states. African
Security Review, 10(3), 7-16. doi. 10.1080/10246029.2001.9628110
Daniel H.R., & Hanemann, T. (2009). China’s changing outbound foreign direct investment
profile: Drivers and policy implications. PIIE Policy Brief, No.Pb09-14. [Retrieved from].
David, D. (2007). Learning from China: What works and what doesn’t. Mimeo. World Bank
Resident Mission, Beijing, China.
Diao, X., Fan, S., Kanyarukiga, S., & Yu, B. (2010). Agricultural Growth and Investment Options
for Poverty Reduction in Rwanda. International Food Policy Research Institute.
Washington, D.C. [Retrieved from].
Dollar, D. (2008). Lessons from China for Africa. World Bank, East Asia and Pacific Region
China/Mongolia, Working Paper, No 4531. doi. 10.1596/1813-9450-4531
Dorn, J.A. (2016). The genesis and evolution of China’s economic liberalization. CATO
Institute Working Paper, No.38. doi. 10.2139/ssrn.2835474
Fan, G., & Woo, W. (1993). Decentralized socialism and macroeconomic stability: Lessons
from China. Working Paper Series, No.112. [Retrieved from].
Fan, S., & Chan-kang, C. (2005). Road development, economic growth, and poverty
96
reduction in China. International Food Policy Research Institute, Research Report, No.138.
[Retrieved from].
Furen, D. (1991). Behavior of China’s state owned enterprises under the dual system.
Unpublished Paper,Chinese Academy of Social Sciences, Beijing. [Retrieved from].
Government of Rwanda, GOR (2000). Rwanda Vision 2020. Kigali: Ministry of Finance and
Economic Planning. [Retrieved from].
Guan, X. (1995). Poverty and anti-poverty programmes in rural China since the mid-1980s.
Socıal Polıcy Admınıstratıon, 29(3), 204–227. doi. 10.1111/j.1467-9515.1995.tb00465.x
Guan, X. (2000). China’s social policy: Reform and development in the context of
marketization and globalization. Social Policy and Administration, 35(1), 115–130. doi.
10.1111/1467-9515.00180
Guariso, A., Ngabitsinze, J-C., & Verpoorten, M. (2011). The Rwandan coffee sector: out of
the ordinary. In R.F. Vandeginste S., & M. Verpoorten M. (Eds.) L’Afrique Des Grands
Lacs., (pp.397-426), Annuaire 2011-2012, Paris, L’Harmattan.
Haggard, S., & Huang, Y.S. (2008). The political economy of private sector development in
China. In L. Brandt, & T. Rawski, 8Eds), China’s Great Economic Transformation,
Cambridge and New York: Cambridge University Press.
Heilig, G.K., Ming, Z., Long, H., Li, X., & Wu, X. (2005). Poverty alleviation in China : A
lesson for the developing world ? Soil and Water, 2(2), 4-13.
Herbst, J. (2000). States and Power in Africa: Comparative Lessons in Authority and Control.
Princeton University Press.
Herd, R. (2010). A pause in the growth of inequality in China?. OECD Economics Department
Working Papers. doi. 10.1787/5kmlh52r90zs-en
Hong, L., & Kongshøj, K. (2014). China’s welfare reform: An ambiguous road towards a
social protection floor. Global Social Policy, 14(3), 352–368. doi. 10.1177/1468018113513914
Hongbing, G. (2001). Study on Poverty Reduction and Development Planning. China Financial
and Economic Press.
IMF, (2011). Rwanda: 2010. Consultation and first review under the policy support
instrument and modification of assessment Criteria. International Monetary Fund
Washington. [Retrieved from].
Jabbour, A., & Dantas, B. (2017). The political economy of reforms and the present Chinese
transition. Brazilian Journal of Political Economy, 37(4), 789–807. doi. 10.1590/0101-
31572017v37n04a08
Jalan, J., & Ravallion, M. (2002). Geographic poverty traps? A micro model of consumption
growth in rural China. Journal of Applied Econometrics, 17(4), 329–346. doi. 10.1002/jae.645
Jefferson, G.H., & Rawski, T.G. (1994). Enterprise reform in Chinese Industry. Journal of
Economic Perspectives, 8(2), 47–70. doi. 10.1257/jep.8.2.47
Jeffrey D. Sachs. (2005). Are there lessons for Africa from China’s success against poverty?.
The End of Poverty: Economic Possibilities of our time. World Bank,Washington DC, USA.
doi. 10.1016/j.worlddev.2008.06.001
Jose, G.Montalvoa & Ravallion, M. (2009). The pattern of growth and poverty reduction in
China. Policy Research Working Paper, No.WPS5069. [Retieved from].
Kabano, I.H., Broekhuis, A., & Hooimeijer, P. (2013). Fertility decline in Rwanda: Is gender
preference in the way?. International Journal of Population Research, 9. doi.
10.1155/2013/787149
Kuhn, R.L. (2011). How China’s Leaders Think. The Inside Story of China’s Past, Current and
Future Leaders. John Wiley & Sons, Asia.
Landes, D.S. (1998). The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.
Norton, New York.
LGPRD - Leading Group for Poverty Reduction and Development. (2001). China’s Rural
Poverty Reduction and Development Compendium (2001 –2010). Beijing.
Li, J. (1991). Taxation in the People’s Republic of China. New York: Praeger.
Li, S., & Sicular, T. (2014). The distribution of household income in China: Inequality,
poverty and policies. China Quarterly, 217, 1-41. doi. 10.1017/S0305741014000290
Lin, J.Y. (1995). The Needham Puzzle: Why the Industrial Revolution Did Not Originate in
China. Economic Development and Cultural Change, 43(2), 269–292. doi. 10.1086/452150

97
Lin, J.Y. (2004). Lessons of China’s transition from a planned economy to a market economy.
Peking University, Beijing China, 1-45. [Retrieved from].
Lin, J.Y. (2011). New structural economics: A framework for rethinking development. World
Bank Research Observer, 26(2), 193–221. doi. 10.1093/wbro/lkr007
Lin, J.Y. (2012). New Structural Economics : A Framework for Rethinking Development and Policy.
Washington, DC: World Bank. [Retrieved from].
Lin, J.Y. (2013). Demystifying the Chinese economy. The Australian Economic Review, 46(3),
258-268. doi. 10.2307/2667712
Lindbeck, A. (2006). An essay on economic reforms and social change in China. World Bank
Policy Research Working Paper, No.4057. [Retrieved from].
Ling, S., Tuan, F., Gale, F., Somwaru, A., & Hansen, J. (2013). China’s regional agricultural
productivity growth in 1985 – 2007 : A multilateral comparison. Agricultural Economics,
44, 241–251. doi. 10.1111/agec.12008
Liu, M. (2017). Inclusive Growth and Poverty Eradication Policies in China. United Nations, New
York.
Luo, R., Zhang, L., Huang, J., & Rozelle, S. (2007). Elections, fiscal reform and public goods
provision in rural China. Journal of Comparative Economics, 35(3), 583–611. doi.
10.1016/j.jce.2007.03.008
Ma, D. (2008). Economic growth in the lower yangzi region of China in 1911–1937: A
quantitative and historical analysis. The Journal of Economic History, 68(2), 355–392. doi.
10.1017/S002205070800034X
Mai, Lu., & Mingling, F. (2008). Reforming the welfare system in the people’s Republic of
China. Asian Development Review, 25(1-2), 58–81.
Makaka, A., Breen, S., & Binagwaho, A. (2012). Universal health coverage in Rwanda: A
report of innovations to increase enrolment in community-based health insurance. The
Lancet, 380, S7. doi. 10.1016/S0140-6736(13)60293-7
Mandel, B.R. (2013). Chinese exports and U.S. import prices. Staff Reports, Federal Reserve
Bank of New York, No.591. [Retrieved from].
Mann, L., & Berry, M. (2016). Understanding the political motivations that shape Rwanda’s
emergent developmental state. New Political Economy, 21(1), 119–144. doi.
10.1080/13563467.2015.1041484
Mark, S., & Laiyin, Y. (1997). The reform of social welfare in China. World Development,
25(10), 1657–1668. doi. 10.1016/S0305-750X(97)00055-7
Mellor, J.W. (2017). Agricultural development and economic transformation. promoting
growth with poverty reduction. Palgrave Studies in Agricultural Economics and Food Policy.
doi. 10.1007/978-3-319-65259-7
Meng, L. (2013). Evaluating China’s poverty alleviation program: A regression discontinuity
approach. Journal of Public Economics, 101(1), 1–11. doi. 10.1016/j.jpubeco.2013.02.004
MINECOFIN -Ministry of Finance and Economic Planning, (2007). Economic Development and
Poverty Reduction Strategy, 2008- 2012. Kigali, Rwanda.
MINECOFIN -Ministry of Finance and Economic Planning, (2012). Budget Framework Paper
2012/13-2014/15 April. Kigali, Rwanda.
MINECOFIN -Ministry of Finance and Economic Planning, (2013). Economıc Development
And Poverty Reductıon Strategy Iı 2013-2018. Kigali, Rwanda.
Montalvo, J.G., & Ravallion, M. (2010). The pattern of growth and poverty reduction in
China. Journal of Comparative Economics, 38(1), 2–16. doi. 10.1016/j.jce.2009.10.005
Morgan, S.L. (2003). From cotton mill to business empire: The emergence of regional
enterprises in modern China. Project MUSE, 6(3), 506–508.
National Institute of Statistics of Rwanda, (2012). The evolution of poverty in rwanda from
2000 to 2011: Results from the Household Surveys (EICV). Kigali, Rwanda. [Retrieved
from].
National Institute of Statistics of Rwanda, (2007). EICV Poverty Analysis for Rwand’s
Economic Development and Poverty Reduction Strategy, May, No.104. [Retrieved from].
National Institute of Statistics of Rwanda, (2015). Rwanda Statistical Yearbook (2015 Edit).
Kigali, Rwanda. [Retrieved from].
National Institute of Statistics of Rwanda (NISR). (2016). Statistical yearbook, Kigali, Rwanda.

98
[Retrieved from].
National Institute of Statistics of Rwanda (NISR) and Ministry of Finance and Economic
Planning (MINECOFIN) (2012). Rwanda Fourth Population and Housing Census.
Thematic Report: Population size, structure and distribution. [Retrieved from].
Naughton, B. (2015). The transformation of the state sector: SASAC, the market economy,
and the new national champions. In B. Naughton & K. Tsai (Eds.), State Capitalism,
Institutional Adaptation, and the Chinese Miracle (Comparative Perspectives in Business
History, (pp. 46-7). Cambridge: Cambridge University Press. doi.
10.1017/CBO9781139962858.003
NBSC -National Bureau of Statistics of China, (2003). Chına Statıstıcal Yearbook(2003). China
Statistical publishing house. [Retrieved from].
Nkurunziza, J., Broekhuis, A., & Hooimeijer, P. (2012). Free Education in Rwanda: Just One
Step towards Reducing Gender and Sibling Inequalities. Education Research International,
2012, 1–11. doi. 10.1155/2012/396019
NSBC -National Statistical Bureau, P.R.C. (2006). China Compendium of Statistics, 1949- 2004.
Beijing: China Statistics Press.
OECD. (2005). Promoting IPR Policy and Enforcement in China: Summary of OECD-China
Dialogues on Intellectual Property Righ ts Policy and Enforcement. OECD, Paris.
Posner, D.N., & Young, D.J. (2007). The instıtutıonalızatıon of political power in Afrıca.
Journal of Democracy, 18(3), 127–140.
Qu, T. (2017). Poverty alleviation in China – plan and action. China Journal of Social Work,
10(1), 79–85. doi. 10.1080/17525098.2017.1314812
Qin, C., & Chong T.T.L. (2015). Can poverty be alleviated in China? MPRA Papers, No.
68458. [Retrieved from].
RAB -Rwanda Agriculture Board, (2017). Girinka Programme transforms livelihoods, reconciles
communitie. Kigali, Rwanda. [Retrieved from].
Ravallion, M., & Chen, S. (2007). China’s (uneven) progress against poverty. Journal of
Development Economics, 82(1), 1-42. doi. 10.1016/j.jdeveco.2005.07.003
Rawski, T.G. (1980). China’s transition to industrialism: Producer Goods and Economic
Development in the Twentieth Century. Ann Arbor : University of Michigan Press.
Rawski, T.G. (1989). Economic Growth in Prewar China. Berkeley: University of California
Press.
RGB -Rwanda Governance Board, (2014). Rwanda Governance Scorecard, 2014 Edition. Kigali,
Rwanda.
Richard N., & Zangrandi, M.V. (2013). Managıng aid for trade and development results
Rwanda case study. Policy Dialogue on Aid for Trade, OECD. [Retrieved from].
Riskin, C. (1987). China’s Political Economy: The Quest for Development Since 1949. Oxford, UK:
Oxford University Press.
RLDSF -Rwanda Local Development Support Fund, (2012). Vision 2020 Umurenge
Programme (VUP) Intermedıate Impact Assessment 2008-2011. [Retrieved from].
Rodrik, D. (2013). When ideas Trump interests: Preferences, world vıews, and polıcy
innovatıons. Working Paper Number No.100. [Retrieved from].
RoR –Republic of Rwanda, (2017). Made in Rwanda Policy. Ministry of Trade and Industry
Made, Kigali - Rwanda. [Retrieved from].
Rozelle, S., Park, A., Benziger, V., & Ren, C. (1998). Targeted poverty investments and
economic growth in China. World Development, 26(12), 2137–2151. doi. 10.1016/S0305-
750X(98)00104-1
Saavedra-Chanduvi, J., Narayan, A., & Tiwari, S. (2013). Shared prosperity: Links to growth,
inequality and inequality of opportunity. World Bank Group, Working Paper, No.WPS6649.
doi. 10.1596/1813-9450-6649
Saksena, P., Antunes, A. F., Xu, K., Musango, L., & Carrin, G. (2011). Mutual health
insurance in Rwanda: Evidence on access to care and financial risk protection. Health
Policy, 99(3), 203–209. doi. 10.1016/j.healthpol.2010.09.009
Sangui, W. (1994). Poverty Problems and Economic Development, Rural Reading Materials
Press.
Sangui, W., Zhou, L., & Yanshun, R. (2004). The 8-7 National Poverty Reduction Program in

99
China — The National Strategy and Its Impact. [Retrieved from].
Sardana, D., & Zhu, ‎Ying. (2017). Background: Reforms in China and India. Palgrave
Macmillan Asian Business Series, doi. 10.1057/978-1-137-54721-7
Schott, P. K. (2008). The relative sophistication of Chinese exports. Economic Policy, 23(53), 5-
49.
Shaohua C., & Ravallion, M. (2004). How have the world’s poorest fared since the early
1980s? The World Bank Research Observer, 19(2), 141–169. doi. 10.1093/wbro/lkhO20
Shenggen F., Zhang, X.Z. (2002). Growth, inequality, and poverty in rural China. The role of
public investments. Washington, DC: International Food Policy Research Institute.
[Retrieved from].
Sicular, T., Shi L., Ximing, Y.H.S. (2017). 2017-12 Changing Trends in China’s Inequality: Key
Issues and Main Findings. Centre for Human Capital and Productivity. CHCP Working
Papers, 2017-12. London, ON: Department of Economics, University of Western Ontario.
[Retrieved from].
Song, Z., Storesletten, K., Wang, Y., & Zilibotti, F. (2015). Sharing high growth across
generations: Pensions and demographic transition in China. American Economic Journal:
Macroeconomics, 7(2), 1–39. doi. 10.1257/mac.20130322
Tarr, D.G., & Volchkova, N. (2010). Russian Trade and Foreign Direct Investment Policy at
the Crossroads. World Bank, Policy Research Working Paper, No.5255. [Retrieved from].
Thirty Years. (2008). Zhongguo xiangzhen qiye 30 nian [30 years of China’s township-village
enterprises]. Beijing: Zhongguo Nongye Chubanshe. [Retrieved from].
UNCTAD. (2007). World Investment Report 2007: Transnational Corporations, Extractive
Industries and Devel- opment. New York and Geneva: United Nations. [Retrieved from].
UNDP. (2013). China National Human Development Report 2013. Sustainable and Liveable
Cities: Towards Ecological Civilization. UNDP China and Institute for Urban and
Environmental Studies, Chinese Academy of Social Sciences. doi.
10.1142/S2345748113800031
United Nations. (2015). The Millennium Development Goals Report 2015. United Nations: New
York, USA. [Retrieved from].
United Nations Development Program (2016). Report on Sustainable Financing for Poverty
Alleviation in China. [Retrieved from].
United Nations Development Programme –UNDP, (2018). Human Development Reports.
September 26, 2018, [Retrieved from].
Van de Walle, N. (2001). African Economics and the Politics of Permanent Crisis, 1979–1999.
Cambridge: Cambridge University Press. doi. 10.1017/CBO9780511800344
WEF -World Economic Forum, (2015). The Global Competitiveness Report The Global
Competitiveness Report 2015-2016. World Economic Forum, Geneva. [Retrieved from].
WEF -World Economic Forum, (2016). The Global Competitiveness Report The Global
Competitiveness Report 2016-2017. World Economic Forum, Geneva. [Retrieved from].
WEF -World Economic Forum, (2017). The Africa Competitiveness Report 2017. World Bank
and African Development Bank, Geneva. [Retrieved from].
World Bank. (1995). China - Public investment and finance. Washington, DC: World Bank.
[Retrieved from].
World Bank. (2008). Poverty data A supplement to World Development Indicators 2008. doi.
10.1596/978-1-4648-0163-1
World Bank. (2013). Rwanda Economic Update, May 2013 : Maintaining Momentum with a
Special Focus on Rwanda’s Pathway Out of Poverty. Rwanda Economic Update; May 2013,
Edition No. 4. Washington, DC. doi. 10.1108/09544789110032089
World Bank. (2015). Rwanda Economic Update. Managing Uncertainty for Growth and Poverty
Reduction. Washington, DC: World Bank Group. [Retrieved from].
World Bank. (2016). Rwanda economic update: Rwanda at work, (9), 79. [Retrieved from].
World Bank. (2018a). World Development Indicators. September 26, 2018, [Retrieved from].
World Bank. (2018b). Worldwide Governance Indicators. September 25, 2018, [Retrieved from].
Wright, T. (2008). A Chinese economic revolution: Rural entrepreneurship in the twentieth
century. International Journal of Asian Studies, 5(1), 135-137. doi.
10.1017/S1479591407001039

100
WTO -World Trade Organization. (2008). World Trade Report 2008. Trade in a Globalizing
World. [Retrieved from].
Wu, Z., & Cheng, E. (2010). Poverty alleviation in the people’s Republic of China: The
implications for Sino-African cooperation in poverty reduction. African Development
Review, 22, 629–643. doi. 10.1111/j.1467-8268.2010.00263.x
Xiaolan, F., & Balasubramanyam, V.N. (2003). Township and village enterprises in China.
The Journal of Development Studies, 39(4), 27–46. doi. 10.1080/713869424
Xie, Y., & Zhou, X. (2014). Income inequality in today’s China. Proceedings of the National
Academy of Sciences, 111(19), 6928–6933. doi. 10.1073/pnas.1403158111
Xueliang, Z. (2008). Transport infrastructure, spatial spillover and economic growth :
Evidence from China. Front. Econ. China, 3(4), 585–597. doi. 10.1007/s11459-008-0029-1
Yansui L., Guo, Y.Z. (2017). Poverty alleviation in rural China : Policy changes , future
challenges and policy implications. China Agricultural Economic Review. doi.
10.1108/CAER-10-2017-0192
Yaohui Z., & Jianguo, X. (2014). China’s urban pension system: Reforms and problems. Cato
Journal, 21(3), 395–414.
Yingyi, Q., & Jinglian, W. (2000). China’s Transition to a Market Economy: How Far across the
River?. Working Paper, No.69. [Retrieved from].
Yu, N., de Jong, M., Storm, S., & Mi, J. (2013). Spatial spillover effects of transport
infrastructure: Evidence from Chinese regions. Journal of Transport Geography, 28, 56–66.
doi. 10.1016/j.jtrangeo.2012.10.009
Zhang, G.K.H., & Long, M. (2005). Poverty alleviation in China: A lesson for the developing
world ? Soil and Water, 1, 1–22. [Retrieved from].
Zhang, K., Dearing, J.A., Dawson, T.P., Dong, X., Yang, X., & Zhang, W. (2015). Poverty
alleviation strategies in eastern China lead to critical ecological dynamics. Science of the
Total Environment, 506–507, 164–181. doi. 10.1016/j.scitotenv.2014.10.096
Zhang, M. (2003). China’s Poor Regions. Rural–urban migration, poverty, economic reform, and
urbanisation. [Retrieved from].
Zhou, W., & Szyliowicz, J.S. (2006). The development and current status of China’s
transportation system. World Transport Policy & Practice, 12(4), 10–16. doi. 10.1016/S0140-
6736(17)31958-X
Zhu, Y., & Warner, M. (2002). Human resource management in China’s “frontier” special
economic zone: A study of selected enterprises on Hainan Island. International Journal of
Employment Studies, 10(1), 75–104.
Zhu, Y., Webber, M., & Benson, J. (2010). The Everyday Impact of Economic Reform in China:
Management Change, Enterprise Performance and Daily Life. London: Routledge.
Zhu Ying; Warner Malcolm. (2017). Impact of western economics on China’s reforms from
the late 1970s to the present: An overview. In M. Warner (Ed.). The Difusion of Western
Economic Ideas in East Asia (Chapter 19). London: Routledge.
Copyrights
Copyright for this article is retained by the author(s), with first publication rights granted to
the journal. This is an open-access article distributed under the terms and conditions of the
Creative Commons Attribution license (http://creativecommons.org/licenses/by-nc/4.0).

101

Lessons Learnt For Rwanda From China's Poverty Reduction Strategies: Policy Analysis Review's

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lessons Learnt For Rwanda From China's Poverty Reduction Strategies: Policy Analysis Review's

Uploaded by

Copyright:

Available Formats

Journal of Economics Bibliography

Lessons learnt for Rwanda from China’s poverty

2. Sympathetic China’s progress averse to poverty

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

2.2. Evolution of China's poverty reduction strategies and policies

(ii) The National Poverty Reduction and Development Programs 1986-

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

Figure 1. Poverty reduction in China between 1990-2015 based on international poverty

2.3.2. Industrial development and poverty reduction

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

2.3.4. Agricultural growth and poverty reduction

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

2.3.5. Openness to international trade and investment careers

2.3.6. Social welfare system

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

Figure 6. Human Development Index Trends, 1990- 2017

2.3.7. Pricing system

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

3. Policies and strategies for poverty reduction in

3.1. Historical context of poverty in Rwanda

3.2. Rwanda’s vision 2020

Figure 8. Trend of Rwanda GDP per capita (Constant 2010 US $)

3.3. Rwanda’s economic development and poverty reduction

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

Figure 9. Situation of Rwanda’s Poverty Reduction in Rwanda

3.4. Understanding Rwanda’s economic growth patterns since the

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

Figure 10. Contributions of Rwanda’s economic sector to GDP

3.4.1. Governance and leadership

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

3.4.2. Social and human development

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

Figure 12. Rwanda’s FDIs, net inflows (% of GDP)

4. Policy lessons from China for Rwanda

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

4.2. Lessons for Rwanda: Particular poverty policies and projects

4.4. The lesson for Rwanda: Asset creation

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

5. Conclusion and policy recommendation

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

G. Bikorimana, & S. Sun, JEB, 6(2), 2019, p.52-98.

You might also like