The Guangxi Zhuang Autonomous Region of the PRC is among the country’s less-developed provinces. Yet it holds massive potential for growth due to its relationship with two major regional economic initiatives—the Greater Mekong Subregion Economic Cooperation Program (GMS) and the PRC-Association of Southeast Asian Nations (ASEAN) Free Trade Area.
Guangxi is the only western province or autonomous region in the PRC that has both deepwater seaports and land ports at its international borders. Through intensive investment in construction over the past two decades, Guangxi has built a well-developed expressway system that directly connects Yunnan and Guizhou—two landlocked and less-developed western provinces—with Guangxi’s seaports at the Beibu Gulf and its land ports at the international border with Viet Nam.
Further development of three cities in Guangxi—Baise, Chongzuo, and Fangchenggang, which sit at strategic positions on the GMS’s regional transport corridors—was needed to foster the region’s economic transformation. To achieve this goal, the government proposed a development project as part of the ADB’s support for accelerated urbanization in the area and balanced economic development to alleviate regional poverty.
In 2010 ADB approved a loan of $150 million for the Guangxi Southwestern Cities Development Project to improve living conditions in three cities of Guangxi, the PRC while strengthening their ability to benefit from regional economic cooperation and integration. Work included construction and upgrading of roads; improvement of municipal services such as water supply pipelines, drainage and sewage systems, and lighting and traffic control; landscaping; and the building of coastal dikes and public education facilities to promote mangrove and lakeside environmental protection.
“The project has accelerated urban development not only through creating jobs away from agriculture for poor farmers from the surrounding counties, but also as part of the national development strategy to integrate this less-developed southwestern region with the international market through transport networks,” says Director General of ADB’s East Asia Department Teresa Kho.
From 2008 to 2019, each of the three project cities showed dramatic growth in their per capita gross domestic product (GDP). Fangchenggang increased its per capita GDP from $3,680 to $13,784; Chongzuo’s GDP increased from $1,620 to $8,246; and Baise’s GDP increased from $1,580 to $11,213.
About 4.4 million residents have directly benefited from ADB’s project in three cities of Guangxi, the PRC. Some 22,300 jobs were created, with two thirds of the jobs filled by ethnic minorities. One third of the created jobs were held by women.
“Minorities had the opportunity to participate fully in all phases of the project cycle through information disclosure, and community consultations and meetings,” says ADB Senior Project Officer Niu Zhiming. “The project provided scope for women’s effective project participation and access to employment opportunities through training and capacity building activities. These have contributed to changing the traditional way infrastructure projects were carried out in the project cities, bringing a focus on gender equality into the mainstream.”
With new or improved roads, increases in traffic speeds ranged from 14% to 65% across the three cities (against a target of 5%). Improvements in urban roads and related infrastructure have in turn contributed to the project cities’ overall development.
Environmental and Economic Benefits
The project also generated significant environmental benefits. An almost 4-kilometer coastal dike built at Fangchenggang provides once-in-30-years flood protection for 520 hectares of land. It forms a barrier protecting the mangrove forest from urban development as well as providing recreation space for residents. In Chongzuo, environmental improvements at Shuikou Lake significantly reduced pollution flowing into the lake and saw water quality improve from Class III at appraisal to Class II of Ambient Surface Water Quality in 2020.
“The project created significant social and economic benefits during implementation and since completion, and these have continued in the three cities,” says ADB’s Country Director to the PRC Yolanda Fernandez Lommen. “It helped to improve local people’s living standards and create a convenient transportation environment. The project also contributed to sustainable socioeconomic growth and regional integration development.”
These charts illustrate the environmental impact of agriculture in Asia and the need to move toward sustainable and healthy diets that are also environmentally friendly and affordable.
The critical role of agriculture to Asia and the Pacific’s development can hardly be overstated. In the 1960s, food supply was a severe problem with most economies in the region struggling to feed their growing population. Many economies depended on food aid, while shortages and speculation prompted food crises in a few others.
The adoption of green revolution technologies in the 1960s increased agriculture productivity and not only allowed the region to meet increasing food demand, but also release labor to contribute towards vibrant manufacturing and services sectors.
In 2018, daily calorie intake per capita in the region, which is now home to more than half of the world’s population, had increased from 1245 kilo calories (kcal) in 1961 to 1914 kcal. Despite this progress, different forms of undernourishment such as stunting and wasting of children persists, even as obesity is rising in many parts of the region.
Today agriculture in the region faces a different kind of food supply challenge. Higher incomes and increasingly urban lifestyles have changed the needs and preferences of consumers. Instead of a diet heavy on traditional staples such as rice and wheat, consumers today prefer a more diverse diet. Per capita consumption of rice has leveled off; while that of fruit, vegetables, eggs, dairy products, as well as meat and seafood is increasing.
Although the consumption of cereals in developing countries in Asia increased between 1961 and 2018, its overall share in the diet decreased. The share for meat and animal products increased from 1% to 4%. This represents a more than six-fold increase in protein intake from animal meat from 1.5 grams to 10 grams per person per day. Still, this is well below the 34.6 grams average in advanced economies outside of the region.
In the PRC daily calorie intake more than doubled between 1961 to 2018, reaching 3205 kcal in 2018. Cereals only make up 46% of the diet, while the share of meat and animal products increased from a mere 3% in 1961 to 21% in 2018. This represents a 20-fold increase in per capita intake from 1.1 grams in 1961 to 19.7 grams in 2018.
To meet these changing food preferences, agriculture in the region will have to reorient from a traditional focus on the production of food staples to high-value crops such as fruit and vegetables, as well as livestock and aquaculture. This will mean a more resource-intensive production as well as rising greenhouse gases. As figure 3 shows, animal-based products have a much larger resource footprint, especially with regard to greenhouse gas emissions and water use.
To reduce the environmental impact of agriculture, it is important to move toward sustainable and healthy diets that are also socially acceptable and economically accessible for all. Some ways to achieve this are to promote mostly plant-based diets, reduce red meat consumption, promote fish obtained from sustainable stocks, and reduce food loss and waste throughout the supply chain.
This blog post is based on data from the recently published Asian Development Outlook Update 2021 Theme Chapter, Transforming Agriculture in Asia.
The People’s Republic of China (PRC) feeds the largest population in the world, a task fraught with many challenges. While investments in agriculture together with institutional reforms have secured a stable food supply, food security remains a concern due to productivity and environmental challenges.
Water availability is one of the biggest constraints to agricultural development in the PRC. It is aggravated by climate change that leads to more frequent droughts and floods, causing reductions in grain output. About a decade ago, average irrigation water use efficiency in the country was only about 40%, and soil fertility was degraded in many regions due to intensive farming techniques over decades. In addition, there was limited institutional capacity to manage the advanced irrigation infrastructure that exists, and a lack of mechanized plowing and harvesting equipment.
It was against this backdrop that the Asian Development Bank (ADB) approved in 2012 a $200 million loan for the Comprehensive Agricultural Development (CAD) Project to support the PRC’s CAD program to promote a holistic approach to enhance food security. Five provinces (Anhui, Heilongjiang, Henan, Jilin, and Yunnan) and one autonomous region (Ningxia Hui Autonomous Region) were selected for the project.
Boosting agricultural productivity
“The project was designed to use an integrated approach to increase agricultural productivity through developing improved irrigation and drainage infrastructure,” says ADB Senior Natural Resources and Agriculture Specialist Shingo Kimura. “This was combined with institutional and capacity development to promote effective operation and maintenance of irrigation and drainage infrastructure, and to introduce modern agricultural technologies.”
At the preparation stage, the project team gathered extensive inputs from provincial and national government officials as well as villages, including women and ethnic minorities.
“A well-informed consultation process along with participation and involvement in subproject identification and implementation ensured the effective operation and maintenance of improved infrastructure upon completion,” says Mr. Kimura.
Over the six-year implementation period, the project improved drainage over more than 100,000 hectares (ha), developed extensive surface water and groundwater irrigation systems, and introduced water-saving technology. By adopting practices such as land leveling, soil testing, appropriately applying fertilizers, returning crop residue to farmland, and reducing salinity, the project improved soil quality in about 43,600 ha of land, while repairing almost 2,000 kilometers of roads, and providing tractors and plant equipment to farms.
Reducing rural poverty
It also increased agricultural productivity and irrigation water use efficiency in the project area, with grain yields increasing by 53%, cash crop yields (excluding vegetables) by 353%, and vegetable yields by 35% in the project area between 2010 and 2018.
“The project supported water-saving irrigation and conservation agriculture, which became more relevant under the PRC’s new policy orientation promoting sustainable agricultural production,” says ADB’s Director of Environment, Natural Resources, and Agriculture in East Asia Tom Panella. “It was well aligned with the PRC’s 12th and 13th Five-Year Plans, which highlighted the importance of food security, agricultural productivity, and water resources management.”
Further, the project contributed to reducing rural poverty through increasing both farm and non-farm income opportunities. It had a positive impact on women particularly by boosting their participation and representation in local water and farmer associations, increasing employment opportunities, and improving technical capacity in modern agricultural production and irrigation. The project created 24,263 jobs during implementation and 2,284 employment opportunities during operation of the facilities, with women taking up half of the new jobs created.
Ethnic minorities, which comprise about 60% of the population in the project area, benefited through training, job opportunities, and improved farmland. They comprised 60% of farmers who received training and almost 70% of those who received employment under the project.
“This project has achieved remarkable results despite the complexities of effectively managing 68 counties scattered around 6 provinces,” says ADB Country Director in the PRC Yolanda Fernandez Lommen. “The strong coordination between ADB, project implementation offices, and provincial and county governments was a key factor behind the success and smooth implementation of the project.”
|Grain Yields||5.74 ton/ha||8.76 ton/ha||53%|
|Cash Crop Yields||1.90 ton/ha||8.60 ton/ha||353%|
|Vegetables||25.2 ton/ha||34 ton/ha||35%|
|Irrigation water use efficiency – surface systems||40%||55%|
|Irrigation water use efficiency – groundwater systems||60%||76%|
|Average per capita income of farmers||CNY3,614||CNY9,675||168% (in constant 2010 values)|
|Poverty incidence in project villages||12.3% (2013)||1.5%|
In the People’s Republic of China, a study shows pension income in rural areas improves economic independence and health of older people.
Establishing sustainable social pension systems in low- and middle-income countries is an urgent task as the growth rate of the senior population in these countries substantially exceeds that of high-income countries (Edmonds et al., 2005). Analysis of the People’s Republic of China’s (PRC) new rural pension scheme, the world’s largest social pension program, offers a robust case study of the impacts of pension benefits on older persons and their extended families in developing countries. In particular, our study examines whether increased income for aging parents relaxes the overall credit constraints for households, especially those in poor rural areas, thereby facilitating more independent living for pensioners and better access to crucial services including medical care.
Like many developing countries, the PRC’s population is aging rapidly. By 2050, more than 25.6% of its population is expected to be over the age of 65. Moreover, stringent family planning policies during the last 3 decades have contributed to a dramatic increase in the ratio of relatively low-income senior dependents, further intensifying the pressure on a shrinking working-age population to take care of their parents. Older rural residents living in less developed regions are particularly disadvantaged. In 2010, the poverty rate for rural people aged 60 and above was as high as 22.3%, compared to 7.8% for the rural population in the PRC as a whole (Cai et al., 2012).
The PRC launched the rural pension scheme in 2009 to alleviate some of these pressures and better provide for the basic needs of aging residents. The program now covers almost all counties with over 400 million people enrolled. Considering its scale and the large disparities between rural and urban areas as well as across regions and age cohorts, this pension scheme provides a unique case study of the heterogeneous impacts of pension income.
In analyzing these effects, three questions were asked:
- Does more income for aging parents facilitate more independent living and less co-residence with adult children, particularly adult sons?
- Does pension income facilitate better access to and use of crucial services, such as medical care for seniors?
- Does pension income change pecuniary and nonpecuniary transfers between older people, their adult children, and their grandchildren?
To answer these questions, we examined two detailed household surveys: from Guizhou province, which is one of the poorest areas of rural PRC, and from the relatively well-off Shandong province. In both cases, we tracked each adult child’s living arrangements and demographic information regardless of whether the adult child is counted as a household member. Using both sets of comparative data allowed us to conduct stronger empirical tests.
Taken together, the research design disentangles the effects of pensions from other age-related factors shaping intergenerational relationships, thus contributing to the growing literature on the specific mechanisms underlying impacts of the pension scheme.
Our findings indicate that the pension scheme significantly reduces intergeneration co-residence, promotes pensioners’ consumption of healthcare services, and weakens (but does not supplant) nonpecuniary and pecuniary transfers across three generations. All of these impacts of the pension scheme exhibit far greater magnitudes in the locality with lower income, Guizhou, than the locality with higher income, Shandong.
In looking at intergeneration co-residence, we observed a perceptible reduction in adult sons’ co-residence with parents around the cut-off age for pension receipt, with a larger and more significant effect for Guizhou than for Shandong. Similarly, there is a more salient decline in co-residence between grandchildren and grandparents for Guizhou than for Shandong. Thus, pension income does appear to relax credit constraints most significantly for the poorer rural area and is associated with purchase of greater living space (and privacy) across three generations.
Moreover, the rural pension scheme appears to reduce some nonpecuniary transfers between senior parents and adult children and grandchildren, such as being assisted by children when ill, and to weaken pecuniary transfers between generations. One interpretation for the finding is that pensioners transfer less money to adult children and grandchildren after household division, especially in Guizhou, and that they instead spend the money on hired services. Another interpretation centered in household division is that separation between older people, their adult children, and grandchildren decreases the level of utility from companionship felt, thereby reducing a grandparent’s monetary investment in a grandchild. It could also be the case that parents’ pensions contribute to adult children’s rising migration rate and off-farm employment, thus increasing children’s economic resources and decreasing the demand for transfers from grandparents. In any case, the introduction of pension incomes appears to increase the economic independence of older people.
In addition to these multi-generation impacts, pension receipt is associated with greater healthcare consumption among pensioners or greater perceived confidence in consuming medical services when needed. In rural PRC, despite universal coverage by basic health insurance schemes, financial difficulties often prevent patients from receiving or continuing expensive medical treatments. Our findings suggest that pension benefits may help to alleviate this problem by promoting confidence in ability to pay for necessary medical services, positively impacting both the health and well-being of aging patients in rural areas and allowing family units the option of investing economic funds previously allocated toward the medical needs of senior parents into alternative investments, such as education, additional job training, or relocation.
Throughout the developing world, adult children often provide the most important form of support for their aging parents, both through pooling of household public goods in co-resident living arrangements and other nonpecuniary support. Pension payments increase older people’s economic resources, which may promote their economic independence and enable adult children to choose to live in a separate home in the same village or to move further away in pursuit of education or work. Our analysis of the PRC’s pension scheme shows that providing pension income to older persons in rural areas may
- reduce intergeneration co-residence, thereby creating additional economic and migratory opportunities for adult children and grandchildren;
- weaken, but not eliminate, the web of nonpecuniary and pecuniary transfers across three generations, increasing the economic independence of older persons and allowing for immediate family to reallocate economic resources toward options, such as schooling and work opportunities; and
- increase access to medical services among older persons in rural areas, improving their personal health and well-being and reducing the burden of medical expense coverage by extended family.
Our findings help strengthen the rural pension scheme program and thus improve the well-being of older persons and their families across regions in the PRC. They also offer insights into the feasibility of replicating similar schemes in other developing countries that are facing similar demographic challenges.
The complete study is co-authored by Karen Eggleston (Stanford University), Xi Chen (Yale University), and Ang Sun (Central University of Finance and Economics, People’s Republic of China) and is published in the November 2018 issue of The Journal of the Economics of Ageing.
E. Edmonds, K. Mammen, and D.L. Miller. 2005. Rearranging the Family? Income Support and Elderly Living Arrangements in a Low-Income Country.The Journal of Human Resources, 40 (1). pp. 186–207.
F. Cai et al., eds. 2012. The Elderly and Old-age Support in Rural China: Challenges and Prospects. Washington, D.C.: World Bank.
Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat. World Population Prospects: The 2010 Revision.
X. Chen, K. Eggleston, and A. Sun. 2018. The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from the People’s Republic of China. Journal of the Economics of Ageing. 12. pp. 225–235.