Posted on 08/28/2005 10:29:34 AM PDT by Our_Man_In_Gough_Island
BEIJING: They are unskilled and unhappy, but China’s hordes of rural migrants are a big reason why China is likely to remain the workshop of the world.
Last month’s 2.1 percent revaluation of the yuan, coming on top of labour bottlenecks in southern China that have pushed up employment costs, has given hope to China’s rivals that they might grab a bigger slice of the low-cost manufacturing pie.
So they might, especially if producers decide not to put all their eggs in the China basket because of spreading trade rows.
But with scores of millions of peasants destined to leave the land and so keep a lid on urban wages, China has an inbuilt cost advantage that, when combined with modern infrastructure and a huge domestic market, will make it hard to beat, economists say.
“For the first decades of the 21st century, China has for all practical purposes an unlimited supply of labour, at least of the unskilled and minimally educated variety, and perhaps also of basically literate and numerate hard-working labourers who were born in the countryside,” Beijing-based demographer Judith Banister said in a study for the US Bureau of Labor Statistics.
Some 930 million of China’s 1.3 billion people live in the countryside, and guesses of the number of surplus rural workers range up to 200 million. Official figures are murky, but the National Economic Research Institute (NERI), a Beijing think tank, estimates that 99 million peasants have already flocked to the cities.
In any case, Banister said all the signs were that an exodus that gathered momentum in the late 1990s was continuing apace.
“The drive out of the villages is real and permanent and as China opens up more it’s going to get worse: China’s agriculture is just not competitive on the world market,” she told Reuters.
Shortages: Incomes in the city are about three times higher than in the countryside, and the money migrants send home boosts per capita consumption in China’s western and central provinces by about 10 percent, according to Wang Xiaolu, deputy director of NERI. In 2003 they remitted some 450 billion yuan, or 3.9 percent of China’s national income. But the bounty comes at a cost. reuters
" China has for all practical purposes an unlimited supply of labour, at least of the unskilled and minimally educated variety..."
I give China's government about ten years.
It's still the same system under a different name as the dynastic variety but educated peasants are a new thing on the horizon...and they will become educated and if not them, then their children.
Hey, why not? Labor unions were at least influenced by Marxists in the early days. Labor unions in Communist China, screwing up their works, would be the LEAST the unions could do to make up for all their excesses have cost the U.S.
Cheers!
---I'm all for a workers movement in China. IMHO, the next decade is going to be full of turmoil and trouble as much for China as it is in the US---
Sounds like paradise to the U.S. cheap labor lobby.
I do not agree 100% with that part of the article. The labor supply is not unlimited unless it can get to where it is useful, or unless the factories can locate in the countryside. There is a certain amount of glossing over the method by which one gets 200 million people to move into cities on short notice. That must be some infrastructure problem. If the solution is, in effect, shantytown slums, that does not ease the social tensions in the nation.
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