800-Million peasants living on $700 a year in china. How come china is so poor and Un-developed (3rd world)?

China has all along been claiming herself "a developing nation" with at least 200 million, out of 1.3 billion still living in poverty. Standard of living differ from 1 nation to the next, US$700 could be manageable in some backward mountain village inside China. Likewise, US$700 could be very rich in Somalia.