no doubt pose a major threat to the country's political stability and economic growth. Their inabilities to find jobs compounded by the rising costs of living in the cities have made many people fall below the poverty line. There are also large numbers of unemployed and laid-off workers from state-owned enterprises (SOEs). These enterprises have since failed to compete efficiently with the private and foreign-funded companies when China's open-door policy was introduced. In the years 1995 to 2000, the state sector lost 31 million jobs, which amounted to 28 per cent of the jobs in the sector. The non-state sector has been creating new jobs but not in sufficient numbers to offset job losses from the state sector. SOEs’ roles were more than employers, they are also responsible for the provision of welfare benefits, like retirement pensions, incentives for medical care, housing and direct subsidies and the like to its employees, as these burdens greatly increased production costs. In 1992, SOE expenses on insurance and welfare took up 35% of the total wages. Therefore, many people not only lost their jobs but also the social benefits and security that they were once so reliant on. The adverse consequences arising from the market reforms are evidently seen as a socially destabilizing factor. Lastly, the government provided little or no social benefit for the urban poor who needed the most attention. Ministry of Labor and Social Security (MLSS) was the last line of defense against urban poverty in the provision of social insurance and the living allowance for laid-off employees. However, its effectiveness was limited in scope in which less than a quarter of the eligible urban poor actually receiving assistance. The Minimum Living Standard Scheme was first implemented in Shanghai in 1993 to help supplement the income of the urban poor. It is a last resort program that is meant to help those that don't qualify for other forms of government aid. The Minimum Living Standard Scheme set regional poverty lines and gave recipients a sum of money. The amount of money received by each recipient was the difference in their income and the poverty line. The Scheme has grown rapidly and has since been adopted by over 580 cities and 1120 counties. Rural Poverty While poverty has been reduced immensely in China over the past decade, it still remains a large problem in rural China. Rural China has historically been