Introduction

Poverty in China used to be regarded as a largely rural phenomenon. The urban poor were assumed to consist of a small group characterised by the three ‘no's – no ability to work; no savings or other income source; no relatives to depend on. The able-bodied were expected to work, and the government was under obligation to provide them with a job, albeit at very low pay. Since the mid-1990s, however, urban poverty has come to be seen as a problem that potentially threatens a substantial percentage of the urban population.

There are three differences between the ‘old’ and the ‘new’ urban poor:

• • the new urban poor outnumber the old urban poor;

• • the emergence of new urban poverty is in tandem with rising inequality in urban areas. The contrast between the ‘haves’ and the ‘have nots’ is starker now more than ever in the Republic of China's (PRC) history;

• • unlike the old urban poor, a large percentage of the new urban poor are able and willing to work but have no jobs.

The first two differences are related. The rise in urban poverty is due partly to a changing perception of poverty. Urban poverty, which in the past was barely distinguishable from the then prevalent living standard, now stands out against the background of a comparatively high and rising average living standard. The third difference is the distinguishing feature of new urban poverty, and one that reflects a fundamental change in the urban economic environment, especially from 1994. The public sector, traditionally the main source of employment for the urban labour force, has been losing jobs. In the period 1995-2000 the sector lost 48 million jobs, 33.4% of the total in 1995. The non-public sector has been creating new jobs but not in sufficient numbers to offset job losses.

This chapter sets out to answer two sets of questions. Firstly, how many urban poor are there in China, and what percentage of the urban population do they represent? Secondly, what social safety nets are there to rescue the urban population from poverty? In order to answer the first set, I draw upon urban household data collected by the Chinese National Bureau of Statistics, using ‘best practice’ described in the Appendix to this chapter.