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Private Sector Aids Poverty Alleviation
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Approximately 6.5 million people have been assisted out of poverty in the past 12 years by private enterprises in China most notably by financing agriculture and industry projects in poverty-stricken regions of western China.

By the end of November the China Society for Promoting the Guangcai Programme (CSPGP), a national poverty-alleviation project funded by private firms, had distributed 124.7 billion yuan (US$15.6 billion) in poor rural areas through 14,529 such projects, said Xie Boyang, vice-president of the programme at a press conference yesterday.

More than 19,982 entrepreneurs from the Chinese mainland, Taiwan, Hong Kong and Macao have funded the projects. "In five years the Guangcai Programme will continue to fund sustainable development of 10,000 villages in poor rural areas," Xie said. The official said "help and support" would be offered to agriculture or industry projects that were designed to promote local economies

The Guangcai Programme has developed a unique framework of partnership between investors and beneficiaries which is usually referred to as the model of "company plus farmer." Investors and beneficiaries form legally binding contracts to determine each party's responsibilities, rights and obligations.

"Different from many other charitable projects the Guangcai Programme is outstanding in its efforts to help the poor through industrial projects which have more long-term benefit than a simple financial donation," the official said. "It's a real salvation for China's poverty-stricken population."

Ten private entrepreneurs initiated the Guangcai Programme in 1994.

Internationally the CSPGP has set up the Sino-Africa Commerce Society. To date the organization has recommended 356 investment projects to countries such as Ghana, Nigerian, Cameroon, Kenya and Mozambique. This year 15 private enterprises have been selected to engage in further investment in Africa.

To further facilitate its poverty-alleviation efforts the CSPGP Fundraising Association was established last December with the aim of better attracting and managing public donations. To date the association has gathered a contracted value of 80 million yuan (US$ 9.8 million) in donations.

"The Guangcai Association is one of only 21 foundations in China that enjoy a complete exemption from both corporate and individual income tax while for other charities the exemptions are 30 per cent and 3 per cent respectively," said Sun Gonglin, secretary general of the CSPGP.

Part of the funds raised go to international poverty-relief projects. The CSPGP donated 1.2 million yuan (US$148,000) to Pakistan earlier this year when the country was struck by an earthquake.

(China Daily December 4, 2006)

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