March 27, 2011
The seemingly endless flow of young Chinese workers that helped to create the country's economic miracle has now finally "dried up", according to a leading economist.
For decades, China has been able to rely on its vast workforce to manufacture a host of goods more cheaply and efficiently than anywhere else in the world.
But now China's leaders are worrying that the country's one-child policy has begun to stem the tide of young workers ready to step forward into the country's factories.
"Each year, the number of new workers joining factories is smaller than the number of old workers who are retiring," said Zhang Zheng, an economist at the elite Guanghua School of Management at Peking University. "The supply has dried up," he added.
Last year, according to his calculations, only 154 million people under 30 were part of China's enormous 550 million-strong industrial workforce.
Mr Zhang added that it was not just demographics that was sapping the workforce of younger staff, but also the growing ambition of young Chinese to pursue further education and then white-collar jobs.
The shortage of young workers is a headache for Chinese factory bosses, who need workers that can put up with long hours and work that demands physical strength, precision and good eyesight.
As a result, wages have shot up by anything from 15 per cent to 40 per cent in some areas, making China a more expensive location for foreign companies to manufacture their goods.
"Chinese companies have to accept the fact they have to raise wages," said Mr Zhang. "And foreign clients will have to accept that China is not just a place to manufacture cheap goods. Without rising prices, fewer Chinese companies will be willing to take orders," he added.