Labor shortages already hampering China’s growth

The high cost of China’s 30-year one child-per family policy is rising higher. The world’s most populous country is grappling with a shortage of labor.

Even in the provinces that traditionally export labor to other areas, such as Henan province, the biggest source of labor in China, the labor supply can barely meet the demand. One local newspaper in Henan reported on Feb 8 that even after raising wages by 10 percent, companies still faced a shortage of workers. There was a similar situation in Anhui, Sichuan and Hunan provinces, which all used to provide labor to the east coast.

The one child policy and thin social safety net are also leaving workers with the heavy burden of caring for parents and grandparents without the help of siblings or cousins:

  “Workers may have to set aside as much as 25 percent of their wages to support their old age”, according to the research by Heiner Flassbeck, the director of the division on globalization and development strategies at the United Nations Conference on Trade and Development.

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