Because they were very restricted from doing anything that was self enterprising. You couldn't even move without permission from the government. Like, you know people say here, that if you want to succeed but grew up in a poor area, that you need to get out. Well in China, they made it so you legally couldn't do that. You were stuck where you were, and so what incentive would anybody have other than to live a peasant agrarian lifestyle, just enough to feed and support their own family unit? And then you got that, and then Mao comes in and takes all those people's food, and then 50 million people died. But now, that they have been exposed to the capitalist west, although they are siphoning off our success, to lift their own status, they are doing it in a way that is cheating, and there's still a ton of corruption and the "state" takes all the stuff for themselves, and gives the leftover gristle to the people, so they can just barely get by, and there is still very little ability for social class mobility, and also still have restrictions on geographical mobility too so there is still a lot of poverty overall, but it's all because of them opening their red curtain to the west, that you see that graph go up at all. We're like pain pills helping them with the symptoms, so they can get by, but their system is designed to keep people in their "station" and this does not encourage a lot of economic growth, unless you can bribe the right people, which takes money, which most of them don't have...so yea...that keeps them poor.