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Aug24
Ten Years on the East Side of the River, Ten Years on the West Side of the River
Yuan Yao August 24, 2006
Know More: Economic Forecast
The green paper report on population and labor by the Chinese Academy of Social Sciences (CASS) showed that after 2016, the aging population is set to increase dramatically, and the size of the labor force will drop accordingly. Economists said if this situation becomes a reality China’s cheap labor advantage may disappear.

Actually the problem has already emerged in China’s most development areas including the Yangtze River Delta and the Pearl River delta, where the labor supply could not meet the demand in years.

Indeed China’s economic growth has mainly relied on its ample supply of labor. It is the labor intensive manufacturing and processing industries that have given China such an advantage in the world economy. Without sufficient labor supply, these industries will collapse.

The Chinese economy is in a new stage of development, perhaps the policy-maker need to rethink whether its export model for processing trade is a sustainable path for China’s economic growth.

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