Chronicle of a Decline Foretold

Chronicle of a Decline Foretold
Author: Ms.Mitali Das
Publisher: International Monetary Fund
Total Pages: 21
Release: 2013-01-29
Genre: Business & Economics
ISBN: 1475548249

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China is on the eve of a demographic shift that will have profound consequences on its economic and social landscape. Within a few years the working age population will reach a historical peak, and then begin a precipitous decline. This fact, along with anecdotes of rapidly rising migrant wages and episodic labor shortages, has raised questions about whether China is poised to cross the Lewis Turning Point, a point at which it would move from a vast supply of low-cost workers to a labor shortage economy. Crossing this threshold will have far-reaching implications for both China and the rest of the world. This paper empirically assesses when the transition to a labor shortage economy is likely to occur. Our central result is that on current trends, the Lewis Turning Point will emerge between 2020 and 2025. Alternative scenarios—with higher fertility, greater labor participation rates, financial reform or higher productivity—may peripherally delay or accelerate the onset of the turning point, but demographics will be the dominant force driving the depletion of surplus labor.

China Has Reached the Lewis Turning Point

China Has Reached the Lewis Turning Point
Author: Xiaobo Zhang
Publisher:
Total Pages: 22
Release: 2010
Genre:
ISBN:

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In the past several years, labor shortages in China have become an issue. However, there is heated debate as to whether China has passed the Lewis turning point and moved from a period of unlimited supply to a new era of labor shortage. Most empirical studies on this topic focus on estimation of total labor supply and demand. Yet the poor quality of China's labor statistics leaves the debate open. In this paper, China's position along the Lewis continuum is examined though primary surveys of wage rates, which offer a more reliable statistic than employment data. Our results show a clear rising trend in real wage rates since 2003. The acceleration of real wages even in slack seasons indicates that the era of surplus labor is over. This finding has important policy implications for China's future development.

Understanding China's Lewis Turning Point

Understanding China's Lewis Turning Point
Author: Annie Wei
Publisher:
Total Pages: 29
Release: 2014
Genre:
ISBN:

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The question of whether China has reached the Lewis turning point (LTP) has recently been intensively debated in the literature. Partly, this is due to the profound policy implication of the turning point posited by Lewis (1954) and Ranis and Fei (1961), while it is also closely related to the growing concern of China's growth sustainability. Various empirical approaches and criteria have been applied in the literature and greatly contributed to the diverse findings on the questions of China's LTP. In this paper, we carefully review the approaches applied in the existing studies and revisit the question by applying the wage-productivity approach which is most closely to the theoretical definition of LTP and the core criterion recommended by Minami (1968). Moreover, we examine the regional heterogeneity of China's LTP which has long been neglected in the literature but shall have significant policy implications to China's regional economic development. Our results show that in China's Eastern provinces, the marginal product of labour has increased rapidly and outpaced agricultural incomes by 2002 for the earliest and 2008 for the latest. In Central China, most provinces included in the sample of our study have passed the LTP by the mid to late 2000s except for Jiangxi province. In contrast, half of the examined provinces in Western China have not yet passed the turning point. The regional heterogeneity of the LTP can be explained by diverse levels of economic development of China's regions. It also indicates that China should adopt heterogeneous industrial policies across regions.

Debating the Lewis Turning Point in China

Debating the Lewis Turning Point in China
Author: Yiping Huang
Publisher: Routledge
Total Pages: 228
Release: 2016-04-08
Genre: Business & Economics
ISBN: 1134925980

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HUANG Yiping is Professor of Economics at the China Center for Economic Research, National School of Development, Peking University, China. He is also an adjunct professor at the Australian National University and a member of the China Finance 40 Forum. His current research focuses on macroeconomic policy, international finance and rural development. CAI Fang is Director, Professor and Fellow at the Institute of Population and Labor Economics, Chinese Academy of Social Sciences, China. He serves as Vice Chairman of the China Population Association. His current research focuses on China’s labor migration, population and development, economic reform, income distribution and poverty.

Reassessing the Lewis Turning Point in China

Reassessing the Lewis Turning Point in China
Author: Yuan Zhang
Publisher:
Total Pages: 0
Release: 2018
Genre:
ISBN:

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There is no convincing evidence to prove that China's Lewis turning point (LTP) arrived in 2004-2005, as suggested in some of the existing literature. Employing data from the National Bureau of Statistics of China for 70,000 rural households and following the method proposed by Minami (1968) to identify the Lewis turning point in Japan, the present study reassessed the reaching of the LTP in China and found that China's economy reached the LTP around 2010. From a regional perspective, China's eastern region reached the LTP in 2010 and its central and western regions are now approaching the turning point. After arriving at the LTP, China's rural economy will face three key tasks: safeguarding grain security, promoting economic restructuring and realizing agricultural modernization. To cope with the shortage of human capital in agriculture production and the challenge of the tight balance between grain supply and demand, the Chinese Government should improve the human capital training system, accelerate agricultural modernization and guarantee national grain security.

The China Population and Labor Yearbook, Volume 1

The China Population and Labor Yearbook, Volume 1
Author: Fang Cai
Publisher: BRILL
Total Pages: 328
Release: 2009-05-06
Genre: Social Science
ISBN: 9004180575

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This yearbook is a collection of important articles by demographers and economists from CASS and other top research and policy institutes in China. Several of the articles in this volume are based on major labor and population surveys carried out in recent years.

China’s Economic Growth Prospects

China’s Economic Growth Prospects
Author: Cai Fang
Publisher: Edward Elgar Publishing
Total Pages: 247
Release: 2016-01-29
Genre: Business & Economics
ISBN: 1781005850

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China has grown rapidly since the reform initiation of the 1970s. China’s Economic Growth Prospects narrates the contribution of demographic transition to recent economic growth in China, and provides suggestions for ways in which it can sustain growth over the next few decades. The expert author provides reasons for the economic slowdown since the second decade of the twenty-first century; explores the challenges facing China’s long-term sustainability of growth with the disappearance of demographic dividend; and proposes policy suggestions. He concludes that, in order to avoid the middle-income trap, economic growth in China must transform from an inputs-driven pattern, to a productivity-driven pattern. Academics, researchers and students of economics and business, particularly those specialising in China, will find this book to be a useful resource. Investment bankers, journalists, politicians and policy makers will find the discussions of past experience and the future potential of the Chinese economy to be of interest.

The great Chinese inequality turnaround

The great Chinese inequality turnaround
Author: Kanbur, Ravi
Publisher: Intl Food Policy Res Inst
Total Pages: 32
Release: 2017-05-03
Genre: Political Science
ISBN:

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The high level of inequality in China has been a focus of interest for policy makers and researchers. However, few studies have evaluated the trend since 2010. With changes in the economic structure and new policy tools introduced in recent years, a revisit of Chinese inequality should give us the latest information about its evolution and the impacts of these economic and policy changes on income distribution. This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroup. Some preliminary explanations are provided for these trends in terms of shifts in policy and the structural transformation of the Chinese economy. The narrative on Chinese inequality now needs to focus on the reasons for this great turnaround.

Post-Lewis Turning Point Era

Post-Lewis Turning Point Era
Author: Fangbin Qiao
Publisher:
Total Pages: 0
Release: 2022
Genre:
ISBN:

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China reached the Lewis turning point in the first decade of the twenty-first century. While the impact of increasing wages was insignificant in the pre-Lewis turning point era, its negative impact on agriculture may be substantial in the post-Lewis turning point era. By analyzing a theoretical model, this study first shows that increasing wages have different impacts on labor-intensive and labor-extensive crops. Using nationally representative household-level panel data, the empirical analyses confirm these results. Importantly, contrary to the worry that this impact will be negative, this study shows that sown area of grain crops increases following wage increases because of the mechanization that results from the increasing wages in the post-Lewis turning point era.