Growth of the country's population of working age will slow down
and lead to labor shortages, a leading expert warned yesterday
after it was announced this week that the number of Chinese aged 65
or above has hit 100 million.
To sustain economic development, the country will have to shift
from a labor-intensive growth model and learn to with an ageing
population, said Cai Fang, a director of the Chinese Academy of
Social Sciences.
"Between 2005 and 2030, China's working-age population (those
between 15 and 64) is projected to grow at 0.4 percent a year, far
lower than the global average of 1.2 percent," Cai said, quoting
United Nations projections.
Coupled with the ageing of the workforce itself for example,
those aged between 50 and 64 will increase by 67 percent and the
country will inevitably witness a general shortage of workers, Cai,
the chief of the academy's Institute of Population and Labor
Economics, told China Daily.
The mainland's population reached 1.306 billion at the end of
last year. Slightly more than 100 million, or 7.69 percent of the
total, were aged 65 or above, pushing China into the ranks of
ageing societies, according to latest official figures.
The number of senior citizens will account for at least 10
percent of the total population by 2017, Cai said.
"As a result, the growth rate and the absolute number of the
working- age population will decline, which will lead to an
inevitable labor shortage," he said.
The working-age population was estimated at 918 million in 2005,
or 70 percent of the total, according to Wang Guangzhou, a
researcher with the China Population Development Center. That group
is expected to account for 72.14 percent of the country's total and
peak at 997 million by 2013.
From 2015, the growth rate of the working-age population will
shrink dramatically, Cai said.
A plentiful labour supply has long contributed to China's
economic miracle. At least one-fifth of the country's GDP growth
between 1978 and 1998, for example, was contributed by the
migration of the workforce from agriculture to industrial and
services sectors, according to Cai.
The shortage of workers will result in an increase of wage bills
for skilled labor, which could erode China's comparative advantage
in labor-intensive industries, he said.
Factories are already finding it hard to employ migrant workers
at low salaries despite a contingent of 150 million awaiting
migration from rural to urban areas.
The change of labor supply patterns should prompt the country to
change its economic growth path, for example, by developing
capital- or technology-intensive businesses, Cai said.
Bao Minghua, a researcher with Renmin University of China, said
the increase in labor costs as a result of worker shortage will not
significantly affect foreign investment.
"China cannot rely only on inexpensive labor to attract foreign
investors," Bao said recently. "The increasing numbers of
high-technology industries in the country do not depend on cheap
labor."
(China Daily September 1, 2006)
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