Labour Market News
- Labor shortage expected
Date: 14-May-2007 Sources: (Shenzhen Daily)
THE country's ample supply of low-cost labor, one of the mainstays of China's remarkable economic transformation, could start shrinking by 2010, a State press report said Saturday.
'China is moving from an era of labor surplus into an era of labor shortage,'the China Daily reported, citing the Chinese Academy of Social Sciences, the nation's key government-run research institute.
China's 1.3 billion people constitute the globe's most populous country but the new study said its massive rural labor force, that has spearheaded the nation's roaring growth, may have been poorly estimated.
The number of unemployed workers below the age of 40 in rural areas that migrate in search of jobs is only about 52 million, far below previous estimates of 100 to 150 million, according to the institute.
The shortage will eventually trigger a demand for higher wages, possibly as soon as in three years, it said.
Rising labor costs would in turn go right to the nation's economic heart as foreign investors forsake the world's factory floor for cheaper workers elsewhere.
While it was too early to judge whether more expensive Chinese labor would become less competitive, the nation needs to start making adjustments now, said Cai Fang, a labor economics expert and chief researcher of the study.
'The country needs to change its growth mode from relying solely on one production factor (labor) to advanced production methods,'Cai said.
The report pointed to the recent worker shortages in Guangdong that has long relied on labor-intensive industries to compete in global markets.
'The phenomenon is spreading gradually from coastal areas to Central China or even some provinces that boast huge labor surpluses,'said Cai.
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