The Impact of Foreign Trade and Urbanization on Poverty Reduction: Empirical Evidence from China

Xingying Wang, Hongli Yan, Libin E, Xiaoyun Huang, Haizhen Wen and Yan Chen
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Xingying Wang: Department of Civil Engineering, Zhejiang University, Hangzhou 310058, China
Hongli Yan: School of Marxism, Dongbei University of Finance & Economics, Dalian 116025, China
Libin E: School of International Trade Dongbei, University of Finance & Economics, Dalian 116025, China
Xiaoyun Huang: College of Economics, University of Guizhou, Guiyang 550025, China
Haizhen Wen: Department of Civil Engineering, Zhejiang University, Hangzhou 310058, China
Yan Chen: College of Economics, University of Guizhou, Guiyang 550025, China

Sustainability, 2022, vol. 14, issue 3, 1-20

Abstract: Poverty eradication is a worldwide development challenge, and China’s poverty reduction experience, evident in its sustainable development strategy, is receiving increasing attention. China has achieved high economic growth and success in poverty reduction over the past 40 years, since its reform and opening up. China’s experience can provide lessons for other countries, however, the situation of poverty in China is still severe, and the remaining people experiencing that condition have long been in a state where income poverty, capability poverty, and intergenerational transfer of poverty coexist. This requires systematic poverty reduction in multiple fields such as the following: population, production, consumption, capital, technology, finance and taxation, education, health care and environment. Foreign trade and urbanization are the best ways to implement poverty reduction. Despite the fruitful results of international studies, the impact of foreign trade, urbanization and their synergistic effects on poverty reduction have not been fully considered. Therefore, by selecting, as panel data, the urbanization rate, foreign trade dependence, and multiple dimensions of poverty indicators of different provinces in China from 2000 to 2017, this paper establishes regression models to study the poverty reduction effects of urban and rural areas. This is accomplished by focusing on three dimensions: poverty gap; income level and gap; and the numbers of under-insurance and guaranteed expenditure, in terms of both imports and exports, respectively. The paper not only considers the synergistic effects of foreign trade and urbanization on poverty reduction, but also investigates the heterogeneity of poverty reduction effects between urban and rural areas. The research results can be applied not only to poverty reduction policy formulation in China, but they can also provide empirical lessons for other developing countries with large urban-rural disparities. Therefore, the study has important implications for both poverty reduction theory development and poverty reduction policy formulation.

Keywords: foreign trade; urbanization; poverty reduction (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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