The persistence of poverty in many parts of China despite over 30 years of rapid growth continues to exercise the Party leadership. We know that this poverty has many causes. In part it reflects adverse physical geography: it is hard to imagine how communities dotted across the Himalayan plateau will ever be rich in the absence of large state subsidies. But poverty also reflects forces as diverse as the operation of class processes, and the imperial project relentless pursued by the Han state throughout its colonies in western China. Yet, important though these policy questions are, they put the cart before the horse. Effective solutions can only be designed when the underlying problem – the extent of poverty – is accurately diagnosed, and here much remains to be done. We are therefore fortunate that the subject of poverty identification and measurement in China is capable of attracting able scholars such as Caizhen Lu.

Lu's purpose is not to provide us with an overall estimate of Chinese poverty. Her book provides a terse and useful summary of the existing literature on that macro question, but her principal aim is to provide a detailed examination of the extent of poverty in Jiankang, a village of 473 households located in Wuding county, Yunnan, during 2005–06. The results make for compelling reading because Lu shows that the extent of poverty in this one village is remarkably sensitive to how poverty is defined and measured. Four different approaches to measuring poverty are set out in successive chapters. First, Lu measures poverty using the official definition of poor households. This official approach is intensely political, and Lu provides fascinating insight into the process. In essence, what happens is that the national government estimates poverty at the county level by applying the national poverty line to the distribution of country income as implied by the national rural household survey carried out in that county. It is then left to the county government to allocate poverty quotas to villages within the county based on local knowledge of average per capita village income. In Jiankang, this led to around 40 per cent of the population being designated as poor. Village leaders in turn identify poor households in their village. Although this approach can work in principle, it is problematic because counties dispute the national survey data (Wuding county claimed 160,000 poor people in 2004 as opposed to the survey estimate of 68,000) and because the use of quotas inevitably confers enormous power on county and village leaders.

Lu's second approach is to conduct an income survey in Jiankang village and then to apply various subsistence-based poverty lines. This approach alone yields enormous variation. The national poverty line produces a poverty incidence of 5.5 per cent, but once this is adjusted to allow for higher local prices, poverty climbs to almost 21 per cent. The application of the World Bank's US$1.25 per day line, adjusted for local prices, increases the incidence still further to 38 per cent. If a local poverty line is used – for example, many of Jiankang's villagers engage in heavy manual labour and therefore around 2,775 calories per day of food are needed as opposed to the 2,393 calories national norm – fully 47 per cent are classified as poor.

Yet one of the great strengths of Lu's book is that she is not content with these two approaches to poverty, illuminating though they are. She argues that we need to involve the poor in deciding how to define poverty, so that they become subjects rather than objects in the poverty measurement process. It is, in Lu's words, a “… holistic and people-centred approach [which] … asserts the primacy of local knowledge over externally determined arbitrary measurement criteria” (p. 142). This type of participatory poverty assessment has often been employed in other countries and, not surprisingly, it provides a very different perspective on poverty in Jiankang. For villagers, income levels are only one factor to take into account. For them, the amount of debt, the extent of leisure time, the degree to which households can access public goods (health care, transport, telecoms) and asset ownership are all key indicators of poverty. In addition, there is a social dimension to the way they regard poverty: for many women in the village, the most obviously poor households are bachelor households. Aggregating these various components produces a poverty rate of 34 per cent. Fourth and finally, Lu looks at the degree of poverty in Jiankang using a range of human development indicators. This multidimensional poverty indicator approach is also quite commonly applied in other countries (especially India), but it has not been used much in analysing Chinese poverty.

The net result is a volume of quite extraordinary empirical richness, which offers a rare insight into the extent of poverty at a local level. And the results are remarkable: depending on how poverty is defined and measured, somewhere between 5 and 47 per cent of Jiankang's population were poor in 2005. More remarkably still, only 1 per cent of Jiankang's households were poor according to all four approaches. In one sense, none of this is surprising: we know that poverty estimates are sensitive to how poverty is defined and measured. Nevertheless, to find this degree of variation in a single village is quite extraordinary, and we are in Lu's debt for illuminating the point so graphically.

For all that, generalization from this type of work is difficult. Jiankang is anything but a typical Chinese village. Every part of the village stands more than 2,300 metres above sea level, it was hit by an earthquake in 1995, and 57 per cent of its population is non-Han. It is therefore not surprising either that the incidence of poverty is high, or that different poverty measures produce such varied outcomes for this sort of differentiated socio-economic landscape. I also find Lu's attachment to participatory poverty assessment rather unconvincing. To be sure, she outlines some of the problems – allowing the population to self-assess whether they are poor inevitably inflates poverty; the well-off in China are hardly likely to support poverty relief when assessment is so “subjective”; aggregation of different indices requires the use of arbitrarily chosen weights; and it is impossible to compare rates of poverty across different parts of the People's Republic. Nevertheless, Lu does seem excessively sympathetic to participatory poverty assessment. This is all the more surprising given the strictures she directs towards the official approach, which makes extensive use of local knowledge (albeit the knowledge of local officials) and which often allows villagers to voice their objections to the poverty list at public meetings, thus making it a genuinely participatory process. For all that, this is a fascinating book which demonstrates the way in which research for a doctoral dissertation can lead to a splendid contribution to scholarship and to knowledge.