01/21/2015, 00.00
CHINA
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China’s labor force collapses: four million less in a year

The National Bureau of Statistics publishes data on 2014. The total population is growing, but not enough to cover the increase in retirees and to ensure the sustainability of the welfare state, the health system and pensions. Competitiveness of national exports also at risk, the real engine of economic expansion in past 30 years.

Beijing (AsiaNews) - The Chinese population and active work force continues to decline. The effects of the disastrous one child law, the imbalance between the sexes, parents forced to have children later in life because of work or forced emigration have reduced the labor force by nearly 4 million units in 2014. Although some economists point out the positive aspects of the data - ie the reduction in the unemployment rate - the majority argues that with this trend the social welfare system, the health sector and the pension system threaten to implode soon.

The figures were released today by the National Statistics Bureau. Late last year, China's population stood at 1.37 billion people, an increase of 7.1 million compared to 2013. However, the active and working age - healthy people between 16 and 59 years - stops at 915.8 million, a decrease of 3.7  million units.

According to some analysts, the reduction of the basin will help prevent a high unemployment rate. At the same time, however, with these numbers the average cost of labor will rise: this, in turn, will negatively affect the manufacturing sector and competitiveness in exports. This is the very sector that has driven the extraordinary economic expansion of the country began 30 years ago.

Yuan Xin, Tianjin Nankai University demographer, considers a lack of manpower "unlikely" in the short term. The same expert points out, however, how the challenges of the world of work are "increasing" and that Beijing must also reform this sector to make their economic and structural reforms sustainable in the long run.

Also according to the National Bureau data, in 2014 the inhabitants over 60 years of age - and thus with the right to a state pension - increased by 10 million, reaching 212.4 million in total. This is 15.5% of the population, a fact that according to some projections will touch 20% in the next five years. Forced by the one-child law to have a single heir, these seniors are counting on the only worker in the family to secure a decent future.

However, the central government is running out of money to cover the medical costs of the elderly and to pay for their retirement. And the imbalance of the internal labor market forces hundreds of millions of people to leave the area of origin and the family to move in search of employment, often to the other end of the country. Aware of all these risks, the government has amended the family planning law by opening up to the possibility of having two children for couples in which at least one parent is an only child. Immediately after the launch of this reform, one million families applied to be able to have a second child.

 

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