The government’s plan to shift the economy from manufacturing and export to services and internal consumption may be a step in the right direction to re-balance the economy – see https://chindia-alert.org/2013/04/19/chinas-growth-the-making-of-an-economic-superpower-dr-linda-yueh/. But only if the move doesn’t “hollow out” manufacturing and export as a result. Otherwise, China will be treading a path Western nations have trod and are still treading to one of slow growth and increasing debt.
WSJ:
Second in a Series: China’s Changing Work Force
“For 15 years, Cui Haifeng worked in China’s manufacturing industry, stitching together leather to make soccer balls before working her way up to warehouse manager at a wood-flooring factory.
A young woman stands in the street as a hostess and advertisement for a hotpot restaurant in the shopping district Dongman in Shenzhen.
Last month the coal miner’s daughter traded a past of factory uniforms for a blouse and skirt, training as a customer-service representative for a life insurer in Guangzhou, southern China’s largest city.
The insurance industry “provides a more promising future and flexible working hours,” says Ms. Cui, 34 years old, who grew up in central China’s poor Henan province. “I want to earn more money to give my two kids a better and stable living environment.”
Her experience mirrors a transition sweeping China. This year, service-related positions—such as those in retail, travel and leisure—for the first time will account for more of the country’s gross domestic product than industrial-sector jobs, J.P. Morgan Chase JPM -1.90% predicts. Government figures show that the service sector created 37 million new jobs in the past five years, compared with 29 million in the industrial sector, which includes manufacturing, construction and mining.
Growing competition between the service and industrial sector for migrant workers like Ms. Cui is contributing to China’s tightest labor market in years, putting upward pressure on wages that already are rising in the double digits annually. That is leading apparel manufacturers to shift some production out of China, although concerns about worker safety in countries such as Bangladesh are forcing factory owners to consider the risks of doing so.
Demand for urban workers in China exceeded supply by a record amount in the first quarter, according to the government. Meanwhile, the average monthly income for migrant workers rose 12.1% from a year earlier.
“There is no let up in the labor shortage,” says Kelvin Lau, a senior economist Standard Chartered Bank. Manufacturers “are realizing that this is not a cyclical thing. It’s not about riding out a storm.”
In southern China’s industry-heavy Pearl River Delta region, nearly 90% of factory owners surveyed by Standard Chartered say the labor shortage will remain the same or get more severe this year.
Stronger growth for service-sector jobs signals that the government’s long-promised transition from an industrial economy focused on exports to one led by domestic demand is under way. Creating jobs in hair salons and insurance companies, instead of in steel mills and soccer-ball factories, helps fuel growth in the world’s second-largest economy.”
via China Grapples With Labor Shortage as Workers Shun Factories – WSJ.com.
Related articles
- * Where Have China’s Workers Gone? (chindia-alert.org)
- Labor shortage eroding China’s edge (fresnobee.com)
- The real cause and impact of China’s labour shortage (chindia-alert.org)
- Foxconn Plant in Peanut Field Shows Labor Eroding China’s Edge – Bloomberg (bloomberg.com)
- A Turning Tide? Why More Chinese Migrant Workers Are Saying ‘Goodbye’ to First-Tier Cities (tealeafnation.com)
- * Wages Rising in Chinese Factories? Only For Some (chindia-alert.org)
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