Trends in Chinas Labour Market

China is knChinas workforceown among companies for its cheap labour force. More and more companies are trying to take advantage of this fact. An average hour of a Chinese worker cost 0,81 US Dollars which is only 2,7% of the wage of the American counterpart. But this trend is about to change! Chinese workforce is gaining in bargaining power! That is the first trend in the labour market.

Companies all over China reporting strikes due to dissatisfied workers. Many plants have been shut down for days causing companies to lose a lot of money. One example is Honda that has a plant in Bejing. Due to the strike activities Honda agreed to increase its wage by 47%. The increasing bargaining power of the Chinese workforce makes it for foreing countries more expensive to produce in China.

Another trend is the diminishing Chinese workforce. Even the Chinese workforce makes up the world largest labour force with a total of 112 million people, the workforce is going to decline. Reasons for this is the Chinese one-child-policy that was enacted in the late 90´s to secure a more stable growth of the population. But in the future the Chinese are going to have problem to their population which is steadily growing older. Image

Nowadays many people move from the center of China into big cities to find jobs. It is estimated that another 70 million people are available in villages that could migrate to big cities. Nevertheless this trend will stop as well since the population is growing older and the motivation to migrate in an advanced ages declines.
In the long run China is missing workforce.

Sources:
http://www.economist.com/node/16693397
http://www.smh.com.au/business/chinas-labour-market-is-at-a-turning-point-20110207-1ak78.html

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6 thoughts on “Trends in Chinas Labour Market

  1. For me it was really surprising to find out that the Chinese workforce becomes more powerful, because almost everybody combines with China the very cheap labour force and bad working conditions. I think people in China realize that a big part of the Chinese economy depends on their workforce. This situation gives them the security to fight for better working conditions and higher wages. This very interesting development in the Chinese labour market has not only an impact on the Chinese economy but also on other parts and companies all over the world. As China is one of the most important investment countries in the world, companies which have their production facilities there have to be aware of higher costs and changing working conditions. On the one hand this development could cause a decline in the foreign investment, on the other hand there is the first counterculture of exploiting labour force.

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  2. I think its a good thing, that the people want higher wages and better workconditions. Because for decades, China has been able to rely on its vast workforce to manufacture a host of goods more cheaply and efficiently than anywhere else in the world.
    But now China’s leaders are worrying that the country’s one-child policy has begun to stem the tide of young workers ready to step forward into the country’s factories. Because each year, the number of new workers joining factories is smaller than the number of old workers who are retiring. It’s not just demographics that was sapping the workforce of younger staff, but also the growing ambition of young Chinese to pursue further education and then white-collar jobs.
    I think the Chinese companies have to accept the fact they have to raise wages,and foreign clients will have to accept that China is not just a place to manufacture cheap goods. Without rising prices, fewer Chinese companies will be willing to take orders.

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  3. I also think that it is a good development for the people living in China that wages are increasing. China has been developing rapidly in the last years and it is important that the people working in the manufacturies take advantage of it. Thus, this also affects the local economy as the buying power of the people is increasing. For me, the problem of a declining number of youth entering the manufacturing companies is mainly the result of low wages and poor working conditions. Increasing wages can attract the youth to work in the manufacturies and can also increase the number of educated and professional work force. As a result, China will not only be the cheap country for buying good but will also claim its position as a provider of goods with a high quality. Moreover, as the awareness for sustainable products is increasing especially within Europe the increasing wages and working conditions can be a good marketing tool for the chinese manufacturers.

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  4. That is true so salary in China is increases last years, but wages are still very low. The factor, so salaries are bigger makes that general costs of production in this country also are bigger. Reactions other countries very often is transfering production line to next country or just investing in other countries which are cheaper (work force is cheaper) than China, e.g. Vietnam, Bangladesh. This country is changes from production country to consumtion country, what is better for his development, for being world economic power, to be competitor for USA.

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  5. It is a positive thing the fact that some of them could say something to get higher wages. But most of them still work in bad conditions and generally for western firms. They way of working is very similar to slavery, but little by little I think that their situation will change especially thanks to globalisation. However like Europe they will have to face to an important problem which is aging, so they will have to find a solution too. As a consequence the fear present among some western people about the fact that China will be the most powerful country in the future is meaningless.

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