Abstract:Social capital plays an important role in China's poverty alleviation.Social capital is the important channel for impoverished households' obtaining resources and opportunities, and it also impacts the efficiency of poverty alleviation project.The paper analyzes social capital and its economic impact from the theoretical perspective.It indicates the condition of social capital of impoverished regions of China, including the closeness and differentiation of social networks, failure of traditional norms, and decline of trust.Then, the paper investigates from the practice perspective, how social capital contributes to poverty alleviation and its efficiency improvement.Finally, it proposes policy implications, including constructing multiple and new rural social networks, improving peasants' trust upon governments, building and perfecting rural social institution and norms.