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The percentage of poverty-stricken people in China's total population has been declining steadily, a World Bank study has found, as the proportion of people living on below US$1 a day dropped from 16 per cent to 10 per cent between 2001 and 2004.

In this period, more than 60 million people climbed up and crossed the poverty line, according to preliminary findings of the bank's Poverty Assessment project.

"This continues the very impressive record of poverty reduction in China," David Dollar, the World Bank's country director for China, said on Friday at a press conference.

By World Bank standards, the country has lifted approximately 500 million people out of poverty since 1980. The bank's figures show that between 1990 and 2002, the latest year for which global poverty numbers are available, China reduced the size of its poverty-stricken population by 200 million. This represents more than 90 per cent of global poverty reduction.

"China's record in poverty reduction is extraordinary," Dollar said.

He said China's rapid economic growth has been an important driver of poverty alleviation.

However, not everybody has benefited equally from the growth. Incomes of poor groups have risen less than those of higher-income groups, Dollar said.

Furthermore, findings of the study suggest that earnings of those at the very bottom of the income distribution ladder experienced a slight decline between 2001 and 2003.

Household surveys indicate that the average real income of households in the lowest 10 per cent of the income distribution declined by 2.4 per cent, whereas all other income groups enjoyed a gain.

Traditionally poverty in China can be largely attributed to laggard economic growth, so in poverty alleviation the government focuses on helping poor areas achieve more rapid growth.

This approach will remain important, Dollar said.

However, the project's findings indicate that the nature of poverty is changing as the poverty rate declines.

The study found that about 70 per cent of the poor were temporarily in poverty because of an "income shock" such as unemployment, injury, ill health or crop failure.

This suggests further poverty reduction in China requires not only measures that reach households with different types of insurance such as health insurance and crop insurance, but also welfare programmes supporting households in which no adults can work, Dollar said.