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Letters and Blogs
(China Daily)
Updated: 2009-09-25 08:26 Dearth of migrant workers may be a good thing In the beginning of this year, around 20 million migrant workers from rural China were out of work and had to return to their homes. Now the tide seems to have been reversed. It is reported that Zhejiang and Guangdong, two provinces that are the manufacturing hubs of China, face increasing shortage of labor. Even in Sichuan province of Southwest China, famous for its labor emigration in the past, recruiters face difficulty in hiring workers. The wages of construction workers, too, have surged. The shortage of migrant workers is an auspicious sign for the Chinese economy. First, it indicates that the income of migrant workers from rural areas have risen. For many years, wages in the manufacturing sector in the eastern coastal areas barely changed. Now the workers have started moving to other regions and sectors where wages are higher, making employers to raise wages. Second, the dearth of labor reflects the industrial shift from the eastern coastal areas to central and western China. Migrant workers now can find jobs nearer their homes because many producers of labor-intensive products have moved to the central and western regions. Many migrant workers have even started setting up their own businesses. Third, more workers are now working for firms which are targeting domestic market, thereby revealing a change in the demand structure. The world financial crisis has decimated overseas demand for Chinese goods, forcing enterprises to reorient themselves to cater to domestic consumers. Though dearth of migrant workers is suffered by many enterprises, the pain will be only in the short term. In the long run, rising labor wages, as well as the change in the industrial and demand structure, will be reasons for us to applaud. Sheng Dalin http://shengdalin.blog.sohu.com/132483168.html China's monetary conditions In my op ed article in yesterday's China Daily about the possible risk of inflation and other risks of stimulus policies around the world, some small editorial changes were made. Some of these changed the content of my statements and views somewhat in a way that I regret. In particular, the title was changed in a way that I thought was at odds with what I argued. My original title was "Inflation is unlikely any time soon in China, but loose monetary conditions can cause other problems." My main point in the article was to argue two things. First, I think the fear of inflation, and the impact of monetary policy on inflation, is overdone. Second, unlike in the high income countries, China's monetary conditions are very loose. While inflation is not the most likely result, the abundant liquidity increases the risk of unwarranted impact on asset prices and quality. I am glad to know that the electronic version has been changed. Louis Kuijs via e-mail (China Daily 09/25/2009 page8) |
