Apr 14, 2008

China's low wage future

There was an article on NPR this morning about China's "one child" law. As you know, that has been in place for decades and limits most parents from having more than one child. Now, two only-child parents can have two children. (There may be some exceptions for farm families, if I recall correctly.) When it comes to consumption of scarce resources, this has seemed to some as a good thing.

Demographers in China are now warning of some looming crises. One is a high proportion of older people who will have to be supported by a much smaller base of young people. Not so different from our baby-boomer crisis, except that we allow immigration and have a long history of mechanization and automation.

Another is that the birth rate for boys is much higher than that for girls. That is due to the cultural preference for boys in China, and the ready availability of abortion. Think it's hard to find a girlfriend here? Male Chinese engineers may have yet another reason to stay on after their education in other countries.

The third really has economists in China worried. Too small a labor force for low-wage manufacturing jobs, which will go to India or Bangladesh. It's no secret that lean and automation are increasingly important in the China of the future. But it sounds less likely that your job will go there. Better pick another place to worry about.

2 comments:

J Thatcher said...

Floaters, floaters, floaters.
All of these projections, or at least the ones I have read, fail to take into account the 100-300 million non-citizen residents of China born outside of the Hukou system.

I'm not saying NPR and its various experts don't have a point, they clearly do, but that population is the wild card in china - politically, socially, and economically.

Karen Wilhelm said...

Thanks for the comment. It just shows how little we learn about a part of the world by listening to a few 3-minute reports.

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