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Productivity trumps sheer numbers as emphasis shifts to skilled workers

A worker labors at a label manufacturer in Huzhou, Zhejiang province, in February. [Photo/VCG]  

China"s shrinking working-age population should not cause alarm, experts said, after figures released recently by the National Bureau of Statistics showed declines in the number of workers over seven consecutive years.

Both the absolute number and the relative proportion of the working-age population-those 16 to 59 years of age-have been dropping. Last year there were 897 million people in China in that age group, down by 26 million from the peak in 2011.

It is generally believed that China"s economic juggernaut over several decades was fueled by an abundant supply of labor generated by the baby boom of the 1950s.

Those babies matured into adults in the 1980s, coinciding with a series of economic reforms that created plenty of employment opportunities, and with the enforcement of the family planning policy, which reduced the child-rearing burden for workers, said He Dan, director of the China Population and Development Research Center.

Those factors have gradually lost traction. The one-child limit was scrapped in recent years as the labor pool appeared to be shrinking.

Demographers focused on a potential shortage of working-age people, which could drag down economic growth in the coming decades.

Anxiety was heightened by bleak projections from the Ministry of Human Resources and Social Security and the United Nations, both of which forecast that the decline will persist, with the working age population dropping to around 700 million by 2050.

But some demographers and economists said the prevailing anxiety over the shrinking workforce is exaggerated.

Zhai Zhenwu, president of the China Population Association, said the sheer volume of the workforce in China is equivalent to that of all developed countries combined, and "currently, no labor shortage is in sight".

"Workforce declines can be offset with improved productivity," he said. "China"s economy is mainly driven by labor-intensive industries, rather than the high-tech sector. Through science and technological innovation, the country can scale back its dependence on workforce volume.

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