Poverty should not diminish one's dignity, aspirations, or moral standards. Even in hardship, a person should maintain self-respect and strive for betterment.
This saying is a cornerstone of Chinese folk morality, often taught to children as a lesson in resilience. It counters the stigma of poverty with the ideal of inner strength.
Chinese people use this to separate material conditions from moral worth. It's a motivational phrase that reinforces the idea that character is more important than wealth, and that poverty is not an excuse for moral failure.
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