BIZCHINA / Top Biz News

Rural labor shortage beginning to be felt
Updated: 2006-05-29 09:12

The factories and enterprises reaped profits by capitalizing on cheap land and labor resource, but did not establish their own brands and intellectual properties, as they failed to inject enough input into research and development. Therefore, overproduction and excessive competition emerged in the country's manufacturing industries. For the sake of survival, some factories kept the salary at a low level for the rural migrant workers without buying their social insurance, Wen said, adding that poor salary and welfare system cooled the migrant workers' zeal for working in cities.

And some rural labor began returning home because of poor welfare system for migrant workers in cities.

Liu Shilong, a farmer in central Henan Province, said both of his sons have come back tilting farmland after years of work in cities, since they could not stand heavy workload any more in their 40's and their current farmwork could earn as much as working in cities.

China's labor resource shortage can be ascribed to another factor: population aging.
In the past 25 years, China's economy maintained high-speed growth thanks for sufficient laborforce at their young and middle age. But today, China's population aging has reached the world's average level, while per capita GDP was merely one fifth of the world's average level.

For instance, populous Henan Province now has 7.18 million population aged 65 or above, taking up to eight percent of its total population. In the next 20 years, its population will continue to be fast aged.

The urgent task for the government is to increase rural laborers' income and welfares, Prof. Wen acknowledged. "When we enjoy the profits and bonuses brought by these laborers, we should at the same time establish capital reserves to their support for their old age."

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