Reports that businesses such as Foxconn Technology Group are raising wages and struggling to recruit workers in China have intensified debate over just how many surplus workers the country still has.
Meanwhile, a boom in college-educated Chinese has raised concerns of an impending threat to U.S. competitiveness. These seemingly disparate concerns about China’s labour force are actually linked by common underlying factors, with critical implications for China’s ability to remain the growth engine of the world.
China’s large pool of surplus labour has fuelled its rapid industrial growth. Now this “demographic dividend” may be almost exhausted, and its economy reaching a Lewis turning point: a shift named after the Nobel prizewinning Arthur Lewis, who was the first to describe how poor economies can develop…
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