原创翻译:龙腾网 http://www.ltaaa.com 翻译:后羿A射日 转载请注明出处

Part 3: Workforce


Since China opened up its economy to the world in 1978, the country has experience unprecedented growth. This growth fueled by the seemingly limitless cheap labor migrating from the countryside into urban areas to become the backbone of China’s industry. Around the same time another radical reform was implemented, in 1979 the One Child Policy came into effect. This was done in an attempt to curb China’s growing population and increase its GDP per Capita. These two reforms have reshaped China’s demographics over the last few decades but now have created one of China’s biggest challenges.


The same workforce that has powered the nation’s growth since the late 70s is now aging and with more and more going into retirement each year. This presents multiple issues for the country. Due to the One Child Policy, each generation is smaller than the previous. 38 years later and two generations in, the average person entering the work force has two parents, four grandparents that either retired or nearing retirement and no siblings. The current pension and social security programs are not robust enough to be able to support this aging population and the responsibility falls on the youngest generation entering the labor force. In 2013, China has imposed a new law that mandates working individuals to both provide for financially and visit their parents. This cultural virtue turned law, is in attempt to share the financial and psychological weight of taking care of the 222 million Chinese that are over the age of 60 representing 16.1% of total population. These figures are still rising.


With the shrinking workforce, demand for labor now outweighs supply. In the last 8 years, the wages of entry level jobs have doubled making it impossible for factories to be able to match the prices of goods that their customers have become accustomed to. This has resulted in many factories relocating to countries like Vietnam, Ethiopia, Nigeria, Pakistan, Bangladesh and Indonesia. The remaining factories are now turning to automation and the production of high-tech products. This shift to high-tech although necessary is making it harder for older people who are not yet ready to retire to find work. As technology moves forward, companies are reluctant to hire anyone over the age of 35. So when a factory relocates to another country, the workforce over the age of 35 left behind has few options. They often return to the countryside and have to rely on their children to take up the mantle.


The one child policy has now been relaxed to two children but this change may not be enough to replenish China’s labor force in the coming generations. Since the couples who are looking to start a family are generally both working and have to support potentially 4 parents and 8 grandparents, having more children proves to be difficult. Before the One Child Policy was relaxed to two children, a study was done where 3,000 women were given permission to have two children. They found that only 10% of the women actually had a second child. For now, China’s population is expected to continue aging and workforce shirking.


Being able to produce and export more low cost manufactured goods than any other country for decades has given China the title “Factory of the World.” Yet, that once cheap labor is now becoming one of China’s largest economic burdens and vulnerabilities. A smaller workforce has to divert a significant portion of income and national budget to support China’s aging population. As a nation that is reluctant to open its borders to migrants to replenish the workforce and population, China has yet to come up with any significant long term solutions. One of the largest challenges that China has to overcome in its rise on the global stage comes from within. Its once greatest strength is now its Achilles Heel.