Elevator pitch
China experienced significant economic progress over the past few decades, with an annual average GDP growth of approximately 8.6%. Population expansion has certainly been a contributing factor, but that is now changing as China rapidly ages. Rural migrants are set to play a key role in compensating for future labor shortages. However, they still face significant barriers to live in cities permanently, resulting in surging waves of return migration in recent years. Additionally, China faces a low fertility rate of 1.01 births per woman, although the population control policy has been relaxed. Millions of people are employed in the food delivery and courier industry, yet with little social benefit and insurance, which poses potential challenges for China’s labor market stability.
Key findings
Strengths
The youth labor force is abundant in rural areas and should serve as an important factor in dealing with China’s aging population.
Real earnings for both rural migrants and urban residents increased over the last 20 years.
Average years of schooling for both rural and urban workers have continued to rise over the past decade, reinforcing the foundation for China’s high productivity growth.
Weaknesses
The working-age population is decreasing, and China’s population is aging rapidly.
The relaxation of the one-child policy has limited effects on the birth rate, which remains far below the population replacement rate.
Millions of people employed in China’s food delivery and courier industry without adequate social benefits or insurance present potential challenges to the stability of the country's labor market.
The US-China trade war, combined with China’s rising labor costs, is prompting numerous foreign firms to relocate operations elsewhere.
