July 7, 2007 (LPAC) China is facing the end of the supply of young, new
migrant workers from the countryside into the cities, one of
China's leading policy institutes reported last month.

Xinhua news agency quoted a mid-June report from the Development
Research Center of the State Council, China's cabinet, which
found that 74% of some 2,749 villages in 17 provinces and
regions, no longer had any "surplus" workers to join the migrant
work force. Xinhua reported government estimates of some 120
million migrant workers now in larger cities, and another 80
million in smaller towns. An earlier CASS (Chinese Academy of
Social Sciences) "green paper" on population and laborers,
concluded that China would face an imminent labor shortage as
early as 2009. CASS reported that the rate of increase in new
laborers has been dropping year by year. The DRC study covered
all regions of China, and found that the situation exists all
over China. First affected have been the Pearl River Delta on
southeast China's coast, where a growing number of cheap-labor
enterprises have had to close due to shortage of workers and
rising wages, which have gone up by 25% since 2003.

This problem is the result of several factors: one of
course is the population policy, which restricts Chinese parents
to one child in the cities, and only two children in the countryside
(about 65% of the population), agriculture has been modernized
in recent decades, the proportion of "surplus" workers - those
for whom there just is not any work on the land - has risen
sharply, creating the basis for the huge labor migration to the
cities and towns.

But China's population is so large, and still so young,
that an overall national surplus of millions of workers will
continue for some time. Peoples Daily on July 3 reported from the
Ministry of Labor, that China's workforce is now based on the
"baby boom" of the 1960s-70s, which will keep the population
growing for at least the next 20 years (when populations in
Europe, for example, will start sharply shrinking). In the next
five years, the new annual work force in the cities and
countryside will reach 20 million. Despite its economic growth,
China still has some 24 million people looking for work each
year, and even growth of 8%-9% is not providing enough workplaces
for all of them. Even while creating 8-9 million new jobs a year,
and millions retiring, China will still have a national surplus
of some 12 million workers who will need work, the Labor Ministry
reported. The key will be shifting focus from cheap-labor to more
advanced production.