标题: Speed industry restructuring [打印本页] 作者: 蝴蝶刺尾 时间: 2010-7-22 10:10 标题: Speed industry restructuring China Should Speed industry restructuring
ShujieYao (China Daily)
Updated:2010-07-16 07:59
Chinamust expand services sector and move manufacturing inland in orderto combat labor shortages in coming years
Even thoughChina's leaders prize stability, they may come to look back onrecent labor strikes as a healthy and vital turning point onChina's twisting path to development.
The era oflow-cost production on a massive scale is drawing to a close. Asevere labor shortage is set to become a huge challenge for Chinain the next 10 to 20 years, rendering explosive growth based oncheap and abundant labor impossible.
Thegovernment must be quick to embrace wage rises for Chinese workersas the catalyst to accelerating its industrial restructuring. Toosluggish a response will leave it struggling to maintain higheconomic growth and withstand public pressure, the inevitableaccompaniment to mounting social inequality.
China facestwo key tasks in the face of rising wages. It must move itsindustrial production quickly up the technology ladder, reducingits reliance on the manufacturing industries and expanding itsservice sector. And it must relocate its traditional manufacturinghubs from coastal areas to central and western regions.
Progress isclearly being made in the latter. Many cities have begun to raisetheir minimum wages by up to 48 percent. Wuhan increased itsminimum wage from 700 yuan per month to more than 900 yuan permonth. Shenzhen now has the highest minimum wage, upping it from900 yuan per month to 1,250 yuan per month.
Following aslew of suicides, and a subsequent pay hike to 2,000 yuan permonth, Foxconn has announced the opening of factories in the inlandcities of Nanning, Chongqing and Wuhan to slash productioncosts.
Many morecompanies will follow, enabling China to begin rebalancing itsregional economies. Some will also turn to Vietnam to takeadvantage of wage rates that are 50 percent lower than those ininland Chinese cities.
But alarge-scale exodus from China is highly unlikely. Countries likeVietnam, Laos and Bangladesh simply can't compete with China interms of infrastructure, logistics and scale of production. For theforeseeable future, Western buyers will be able to absorb risingChinese labor costs by passing the difference on to Westernconsumers.
The threatof a labor shortage, however, makes the transition frommanufacturing to service industries all the more urgent for theChinese development model.
Britisheconomist Arthur Lewis proposed a dual economy model for adeveloping country in the 1950s, comprising a modern industrialsector and a traditional agricultural sector. As the model goes,surplus labor gradually shifts from the agricultural to theindustrial sector, with the country becoming more productive andindustrialized.
In theinitial stages of rural-urban migration, industrial wages arerelatively low as the economy has an abundant labor supply. As morelabor is absorbed by the industrial sector, the labor surplus inthe agricultural sector declines, which pushes up industrial wages.The industrial wages can increase rapidly before all theagricultural surplus labor is totally absorbed by industry.
China hasreached the beginning of the "Lewis turning point", whereindustrial wages are rising even though a significant amount oflabor remains in the countryside.
Severalfactors are pushing up wages in the cities. Living standards andagricultural productivity in rural China have increased markedlyover the last 30 years, raising the income expectations of newrural migrants.
Second, therising cost of living in cities, particularly in housing, medicalcare and education, mean that higher wages are required simply tosurvive. Third, non-farming activities in rural areas have becomevery important sources of income, resulting in many rural workershaving no need to move to cities in search of highersalaries.
And thenthere is the issue of China's ageing population that has beenlooming large for the last decade. The number of people agedbetween 15 and 24 entering the labor market in the next 10 years isset to decline by 30 percent.
It may seemhard to believe now, as Chinese graduates compete furiously forlimited job opportunities for little financial reward, but therewill also be signs of a labor shortage among China's youngcollege-educated workers.
This year,9.46 million students competed for places at Chinese universities,down 740,000 from the previous year - the second successive year ofdecline. If this trend continues, the population of collegestudents will decline rapidly in the near future.
In theshort-term though, Chinese graduates will still find themselveshaving to accept employment that is lowly paid in comparison totheir educational qualifications.
But thequicker China moves towards a more hi-tech output, the more jobswill become available to young skilled workers. A more balancedregional development will also help reduce employment pressure forgraduates chasing jobs in the major cities.
The recentspate of workers' strikes and the resulting wage rises will bringnecessary, long-term benefits to both China's blue-collar andwhite-collar workforces.
It is alsothe responsibility of municipal governments to provide basiceducation, healthcare and housing for migrant workers to mitigatewage hike pressures and raise happiness levels among low andmiddle-income households.
Cruciallyfor the Chinese leadership, higher incomes will add legitimacy toits pledges to narrow the gross inequality gap and compel it to actwith urgency in its pursuit of a sustainable and developedeconomy.
Theauthor is head of the School of Contemporary Chinese Studies at theUniversity of Nottingham.