Re: [OPE-L] China: Labor Power Shortage Looms

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Thu Jul 06 2006 - 16:33:07 EDT

This I believe is a factor of decisive significance
for the balance of class forces internationally.

Based on UN projections the section of the chinese
population between the ages of 16-55 who are the
most economically vigorous will peak sometime
between 2010 and 2020. Since the latent reserve
army in peasant agriculture is some way from being
exhausted, the exploitable population will continue
to rise for a short while after that. For how long
it grows depends on the accumulation rate. 

An accumulation rate approaching 50% of GNP which
is quite extraordinary can eat up population supplies

Rakesh says it is not yet critical but one should
be wary of being too short term in ones perspective.
For historical materialism it is the broad long term
trends of a mode of production that are decisive.
In this context the year 2006 is significant. It is
the first year in which more than half the world
population is urban. This puts the world as a whole
at the same stage of capitalist development as
Britain was when   Engels and Marx arrived there
and started and started their analysis of it with
' The condition of the working class in England'.

By my reckoning the strategic shift in class forces
brought on by demographic transition was evident here
by 1900. From then on the tendancy was for the working
class to grow in strength relative to the bourgoisie
producing a series of restructuring crises.

In China the process will be accelerated by several

1. The rate of capital accumulation is an order of
   magnitude higher than it was in the 19th century.

2. The productivity differential between agriculture
   and industry is much higher, this is what temporarilly
   allows such a rapid rate of accumulation.

3. Whereas Britain could seize an empire that was much
   larger than its domestic population to offset the
   decline in the rate of profit, this is not possible
   for the most populous nation on the planet.

This means that the inherent tendancies of capital accumulation]
to self dissolve the capitalist mode of production will be
more marked in China than they were in Europe a century

-----Original Message-----
From: OPE-L on behalf of glevy@PRATT.EDU
Sent: Sat 7/1/2006 2:48 PM
Subject: [OPE-L] China: Labor Power Shortage Looms
I saw this on Globolist.  With all of the talk of "over-population"
in recent decades, this article raises some important issues.  Given
the age distribution of the population in certain regions in China, will
it face a labor-power shortage?  If so, how will that affect its terms of
trade and manufacturing costs?  How might it be overcome? (e.g. by
internal [wrom where?] or external migration?)  Will manufacturing shift
to other regions in search of lower labor costs? Is the "boom" in
Shanghai about to end?

In solidarity, Jerry

NY Times, June 30, 2006
As China Ages, a Shortage of Cheap Labor Looms

SHANGHAI, June 29 - Shanghai is rightfully known as a fast-moving,
hypermodern city - full of youth and vigor. But that obscures a less
well-known fact: Shanghai has the oldest population in China, and it is
getting older in a hurry.

Twenty percent of this city's people are at least 60, the common
retirement age for men in China, and retirees are easily the fastest
growing segment of the population, with 100,000 new seniors added to
the rolls each year, according to a study by the Shanghai Academy of
Social Sciences. From 2010 to 2020, the number of people 60 or older is
projected to grow by 170,000 a year.

By 2020 about a third of Shanghai's population, currently 13.6 million,
will consist of people over the age of 59, remaking the city's social
fabric and placing huge new strains on its economy and finances.

The changes go far beyond Shanghai, however. Experts say the rapidly
graying city is leading one of the greatest demographic changes in
history, one with profound implications for the entire country.

The world's most populous nation, which has built its economic strength
on seemingly endless supplies of cheap labor, China may soon face
manpower shortages. An aging population also poses difficult political
issues for the Communist government, which first encouraged a
population explosion in the 1950's and then reversed course and
introduced the so-called one-child policy a few years after the death
of Mao in 1976.

That measure has spared the country an estimated 390 million births but
may ultimately prove to be another monumental demographic mistake. With
China's breathtaking rise toward affluence, most people live longer and
have fewer children, mirroring trends seen around the world.

Those trends and the extraordinarily low birth rate have combined to
create a stark imbalance between young and old. That threatens the
nation's rickety pension system, which already runs large deficits even
with the 4-to-1 ratio of workers to retirees that it was designed for.

Demographers also expect strains on the household registration system,
which restricts internal migration. The system prevents young workers
from migrating to urban areas to relieve labor shortages, but officials
fear that abolishing it could release a flood of humanity that would
swamp the cities.

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
India, the world's other emerging giant, also stands to benefit, with
low wages and a far younger population than China.

Even within China, Mr. Zuo said, many foreign investors have begun
moving factories away from Shanghai and other eastern cities to inland
locations, where the work force is cheaper and younger.


This archive was generated by hypermail 2.1.5 : Mon Jul 31 2006 - 00:00:03 EDT