China’s Burning

The NY Timesreports today that as China ages, a shortage of cheap labour looms (free registration required). Since the 1950s, China has held a competitive labour differentiator based on Mao’s encouraged population explosions. However, shortly after Mao died, a one-child per family policy was adopted. Today China stands to lose its prized labour position to countries like Bangladesh, India and Vietnam as a significantly sized workforce a) does not have the masses to be replaced, and b) are being replaced by young highly educated and empowered people who are not cheap.

From the article, “As workers become scarcer and more expensive in the increasingly affluent cities along China’s eastern seaboard, the country will face growing economic pressures to move out of assembly work and other labor-intensive manufacturing, which will be taken up by poorer economies in Asia and beyond, and into service and information-based industries.”

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