Economic reforms that started in 1978 have helped lift 635 million Chinese people out of poverty, from 839 million in 1981 to 204 million in 2005 (see chart above), according to this study (Table 2). The poverty rate has fallen from 53% of the population in 1981 to 8% by 2001 (see chart above from the World Bank).
Bottom Line: Free market capitalism is the best path out of poverty. The difference between capitalism and socialism? Capitalism works.