Divyanshu Chadha

Introduction

China is home to the largest labor force of 269 million workers is running short of labor. This economic development has occurred due to the hard labor conditions and increase in wages in the Chinese manufacture sector. The main reasons affecting the decrease in labor are: -Shift by migrant worker and declining young work force due the government policies in China.

Shift back by migrant workers

In recent years, the trend in Chinese labor market is changing and workers who use to leave their families behind in their respective providences for better job prospects in highly industrial areas. This relocation of labor from rural areas has helped Chinese industries with abundant and cheap labor and made smooth progress in the rapid growth of very labor-intensive manufacturing companies are concentrated along Chinese coastline mainly in the Guangdong, province . But in this urban labor markets, these migrant unskilled labor are paid very low salary with extreme long hours of work and also are not provided with better housing. (Meng and Zheng, 2001).

Since 2004, China started to see shortages in labor because there was an extensive amount of factories been built but china could not provide the man power to run these new establishments. This caused an economic shift which due to shortage of labors it created an excess amount of labor intensive jobs but no man power to fill these positions. China had become a world power due to its ability to provide cheap labor which had started to show signs of weakening. Since the cost of living is increasing, unskilled labors moved back to farming. Since the consist inflation of agricultural products farmers are paid higher for their produce of agricultural goods. Due which unskilled workers who now prefer to work on their agricultural land and stay with their family instead in factories dormitories and work very long hours. Chinese economy will face a major structural adjustment, leading to a transformation of the economic and technological structure. (Chung, 2011)