September 2005
Migrant Workers: Illusory Shortfall
Press accounts of labor shortages in Guangdong province have sparked a round of excited comment from many China watchers. How was it possible to have a labor shortage in a country with hundreds of millions of excess farm workers? Was the China cheap-labor story coming to an end? The answers to these questions prove simple enough in concept, though complex in detail. Briefly, China is not running out of cheap labor to work in its factories, and is unlikely to do so for some decades. Yet it is also true that China’s labor market is intricate and fragmented, and subject to demographic ebbs and flows resulting from the one-child policy. Such fragmentation makes it possible for localized labor shortages to occur even when millions of rural migrants are looking for jobs. CEQ demystifies the issues around China’s estimated 131m migrant workers, a gigantic but poorly understood component of the national workforce.
Also in this issue:
Louis Kuijs examines the dynamics of Chinese saving and investment
Tom Miller argues that The increasing tightness of water supplies may constrain China’s economic growth in future, though it is hard to quantify just how severely