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Nation sees drop in labor force numbers

By Zhao Qian (Global Times)

08:41, February 25, 2013

China's labor force aged between 15 and 59 declined by 3.45 million last year, the first drop in three decades, and an expert warned Sunday that a transformation of the country's economic structure is urgently needed in order to deal with changes in the labor supply.

The number of workers aged between 15 and 59 fell to 937.27 million last year, accounting for 69.2 percent of the total population, 0.6 percentage points lower compared with the previous year, the National Bureau of Statistics (NBS) said in a report on its website Friday.

"This is the first absolute decline for China's labor population in a long time," Ma Jiantang, commissioner of the NBS, was quoted by the Beijing News as saying Sunday. The country's labor force will keep on declining "gradually" until at least 2030, Ma said.

The decline has raised concerns that China's "demographic dividend" - which has been closely related to the country's dazzling economic growth over the past three decades - is now dwindling. Consequently, there are doubts about whether the country can continue such strong growth in the future.

The dividend refers to a demographic structure in which the proportion of people aged under 15 and over 60 is fewer than those aged between 15 and 60. The net effect of such a demographic mix for an economy is an ample supply of cheap labor, a high savings rate, a high return-to-investment ratio, low cost of taking care of the elderly and fast economic growth.

"The decline doesn't mean that the demographic dividend will fizzle out soon, because the total amount of the working population is still huge," said Zhai Zhenwu, dean of the School of Sociology and Population Studies at Renmin University of China.

The labor force aged between 15 and 59 will not see a dramatic drop in the next decade, Zhai estimated.

But Zhai warned that the rising proportion of aging workers will pose a big challenge for the country's labor-intensive industries, which will need to transform their industrial structure into technology-intensive business models.

Labor shortages have already been noticed in China, especially in southern and eastern developed areas.

"Only a few workers have come back to work so far after the Spring Festival holiday (which ended on February 17), and we are still unable to start operating," Zhang Huaguang, an owner of an export-oriented company in Dongguan, South China's Guangdong Province, was quoted by China Times as saying Saturday.

"Some labor intensive companies have been forced to make innovations in their operating model, such as using robots during the manufacturing process," said Li Jianming, deputy director at the China Enterprise Confederation.

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