China's Remotest Regions Slip Deeper Into Poverty

LIKE the spring dust storms that swirl off the naked contours of China's loess plateau to block out the sun, poverty has overshadowed life in Fangta village for centuries.

Each morning at dawn, villagers like Bao Guanyou shoulder hoes and trudge up dirt paths to sloping plots of sand-like soil. Parched by drought and scarred with deep gullies by erosion, the yellow earth never yields enough to feed the local population.

Until as recently as 1989, Mr. Bao, his wife, and three children survived on less than half the average yearly grain consumption of Chinese peasants. In the worst years, hunger drove Bao to fill his aching stomach with corn husks and weeds.

"All we did was plant, we didn't harvest anything," says Bao, his skin toughened by the constant, grit-filled wind that blows through this village in northern Shaanxi Province. "We were always hungry."

When darkness falls, Bao and his neighbors head home to dimly lit cave dwellings for suppers of noodles or steamed bread. The crude, earthen dugouts are much like those that sheltered Mao Zedong and his comrades in the 1930s and '40s when the Red Army was based in Yan'an, 30 miles southeast of Fangta.

Despite major gains in Chinese living standards in more than a decade of economic reform, 70 million peasants still live precariously in "absolute" poverty on the loess plateau and in other remote, mountainous parts of China, according to World Bank statistics.

Of these, tens of millions do not have enough food to eat or clothes to wear, and 13 million lack adequate supplies of drinking water. One-fifth of China's 860 million peasants live in homes without electricity, and a tenth live in townships without public roads, official Chinese statistics show.

Beijing, which failed to meet its stated goal of wiping out poverty by 1990, now says the task will extend beyond the year 2000.

Especially troubling to Chinese relief officials is the backsliding of poor areas. An estimated 15 to 20 percent of the areas that had escaped poverty since 1985 have dropped again below the poverty line of $40 per capita annual income, says Yang Yongzhe, a government development official.

China's most stubborn poverty is rooted in the economic and environmental fragility inherent in villages like Fangta, which often lie in isolated mountains or zones of frequent drought, flooding, or other natural disasters, relief workers say.

Yet the prospects for poor villages are also dampened by a widening of the historic economic gap between China's hinterland and the prosperous coast since the mid-1980s, when senior leader Deng Xiaoping initiated a coastal development strategy.

Preferential tax, trade, and investment policies for the coast, combined with the government's underpricing of key raw materials produced inland, have left out poorer hinterland provinces while subsidizing growth of industry and incomes along the more prosperous seaboard.

Today, peasant incomes in poor provinces are only half of those on the coast, a gap that increases while overall income in hinterland areas has increased slowly. Villages like Fangta are likely to fall further behind unless the government takes action to close the gap, inland officials and foreign experts warn.

"The biggest challenge is to protect the poor from the human costs of economic adjustment," writes Shahid Javed Burki, director of World Bank lending to China, in an article published in September 1991.

As the income gap grows, however, inland regions are pressuring Beijing to achieve more balanced growth. In the former Red Army base of Yan'an, the rising aspirations of peasants and bitter complaints of local officials indicate such pressure will only mount. Enter the family tractor

The Bao family, although poor by national standards with an annual per capita income of $50, is one of the wealthiest in Fangta, Ansai County.

Thanks to a grain-for-labor development scheme sponsored by the World Food Programme (WFP) in Ansai and three other nearby counties starting in 1989, the Baos today have adequate supplies of millet, corn, and wheat. (Erosion project, right.)

In 1990, Bao secured a loan to buy the village's first tractor, which he rents out to supplement his earnings. This year, the family celebrated the lunar New Year with pork, eggs, and red packets of money for the children.

Sitting across from a shiny, mirrored cabinet and television set in the living room of his newly dug cave, Bao can afford to look beyond the basic dilemma of survival for the first time. But though he lives more comfortably than ever before, Bao also nurtures unprecedented ambitions: In the 1990s, he wants to raise his family's income fivefold and boost its grain output by 25 percent.

"I am not wholly satisfied with my life," he says. "Others are still much better off than me."

"I know from TV that Hainan [Province] has developed much faster than here," he says. Hainan, a tropical island 1,000 miles southeast of Fangta, is China's largest zone for free-market experiments.

Like many of the country's poor, Bao has only a primary school education and has never traveled more than 30 miles from home. But the spread of television in the past decade means that millions of Chinese in poor areas are barraged nightly with tantalizing images of new wealth, giving rise to an explosion of expectations. `TV fiend'

"I am a TV fiend. Whenever there is a show I watch it," says Bao, who bought a television set in 1990. "I watch economic news and farming news - whatever can help me get rich." The village can tune into nightly broadcasts from 6:30, when the peasants return from the fields, until 11:00.

Bao's desire to make money has not yet spurred an interest in politics. On the contrary, Bao says most peasants in Fangta avoid serving on the eight-man village committee or Communist Party branch - the community's two grass-roots political bodies. They are too busy trying to improve their lot.

"I can't see any advantage in it," Bao says, scratching his head. Similarly, he says he pays little attention to TV reports on national politics because "they are not useful in improving our lives here."

Chinese officials in inland provinces are more politically outspoken, however. Protests over what they see as an unfair distribution of the benefits of reform have become more and more vociferous at the annual spring sessions of China's parliament, the National People's Congress (NPC).

NPC delegates warn that central government policies are turning the hinterland into China's "third world," and accuse Beijing of lacking a commitment to improving living standards in their regions.

As a result, some Western experts on China say that many hinterland regions withdrew active support for the reform program of Chinese leader Deng by 1988, and began backing conservative Communist Party forces aligned against him.

"The coastal policy prompted the defection of the interior from the reform coalition," asserted China scholar Andrew Wedeman at a recent conference on China's reforms.

In the city of Yan'an, officials charge that Beijing's policies have allowed coastal provinces like Guangdong to advance their industries by exploiting Shaanxi's cheap, plentiful reserves of coal and other raw materials. Meanwhile, industrial goods from the coast are sold inland at high prices.

"Guangdong wants to get rich by taking money from the pockets of poor people like us," scoffs Zhang Zhongqiang, a Yan'an offical.

Catching up with the coast is a major preoccupation for Mr. Zhang and other inland officials. He dreams of attracting foreign investment to build a multi-story "cave hotel" for tourists in Yan'an. The hotel would feature a transparent elevator "like the one in Shenzhen," he adds, referring to a hotel in the reform-driven boom town on Guangdong's border with Hong Kong.