The general perception is that China has one thirds surplus
rural workers, in other words, it has 100 to 150 million
unemployed labours in the rural area. But the reality paints
a quite different picture.
According to a research study done by China's Social Science
Academy released on Friday, currently there are only 52
million idle labours under the age of forty in the rural
In just couple of years, in fact, China is going to face
a labour shortage, and by 2015, the country will experience
a zero growth rate in labour force, said Mr Cai, the drafter
of the study report.
Mr Cai further illustrated in an interview with the state
television station that the current labour surplus is mainly
caused by a structural problem rather than an oversupply
China's labour structure has undergone a series of changes
in recent decades. When the Economic Reform started thirty
years ago, rural labours accounted for more than 76 percent
of China’s total working population; in 2005, it dropped
to 64. The true figure is even lower, according to Mr Cai,
as many self-employed migrants living in urban areas are
still registered as rural workers, while in cities those
who were retrenched from state-owned enterprises are not
counted as employed even after they have returned to work
in private sectors.
It is common for a country in the transformation from
agriculture economy to industry economy to experience a
shift from labour surplus to labour shortage. What is unique
about China is the time that it has taken for the transformation.
Normally it needs a hundred years to accomplish, in China
the circle is complete in just thirty years, partly owning
to the implementation of the One-Child
policy among the ethnic Han population.
The first sign of the labour shortage appeared as early
as in 2004 along China's coastal areas, but now the trend
has been observed in the interior regions. Sooner or later
it will trigger a wage rise across the board and an increase
in total labour costs of businesses.
It shall be a positive development for China’s more than
a hundred million migrant labours, who have overworked
yet have been overlooked, are always underpaid and sometimes
During this so-called Labour Day Golden Week, for instance,
majority of the migrant labours saw no gold: they have
to cope with the extra holiday expenses without holiday
Delaying and even denying wage of the migrant labours,
particularly in the building and construction sector, was
a huge problem and still is a problem now, with fatal consequences
including death and bodily harm heard from time to time.
Once Prime Minister Wen Jiabao had to go out his way to
demand the labour heads (包工头) to release wages owned to
their workers, so as to enable the migrant labours to return
home for a Chinese New Year reunion.
Migrant workers demand their rightful pay denied by their
Although wage increase may blunt competitive edges of some
Chinese products in the world market, it doesn't necessarily
present as a negative impact on China's overall economic
growth. "In fact it can help strengthening the domestic
market," one on-line post points out. As for the possibilities
of seeing foreign investors rechannelling their funds away
from China, it is relatively small, since apart from the
cheap wage factor, a stable political climate, preferential
policy measures and a sizable domestic market all play important
parts in attracting the foreign investments to China, the
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