What is in this article?:
- China's Looming Worker Shortage Threatens Economy
- China's Competitiveness
The abundant supply of cheap workers in the world's most populous nation has created unprecedented cost efficiencies that underpinned its blistering economic expansion over the past 35 years, propelling the global economy forward.
Chinese authorities maintain that controlling its population growth has been key to increasing its prosperity.
But while China has risen to become the world's second-largest economy, on a per capita basis it still lags far behind the U.S. and other developed countries.
Industrial disputes have become more common in recent years, as workers demand higher pay and better working conditions on the back of growing awareness of their rights and the shortage of skilled staff.
Multinational companies are looking to other developing economies with lower wages for further expansion, with some already moving production bases out of China to rivals such as Indonesia and Vietnam.
In a survey of 514 Japanese manufacturers by the Japan Bank for International Cooperation last year, the number of respondents voting China as the top destination for overseas business fell by more than 10 percentage points on 2011.
Economists said China must look to speed up the transformation of its economic model and move up the value chain.
"The golden period of the manufacturing industry, particularly those depending on exports, has gone," said Yao.
At the same time, she said, the country was woefully underprepared to meet the burden of caring for the elderly. "The fiscal situation is not prepared and the social security network is not complete," she said. By around 2060, every three Chinese workers will have to support two people above 60, compared with a ratio of five to one now, according to Li's projections.
It is a crucial challenge for the ruling Communist Party, said Ren Xianfang, a Beijing-based analyst with research firm IHS Global Insight. "Delivering growth and delivering social security to the general public are the key things for the state to (maintain) its legitimacy."
Analysts said the medical services are increasingly expensive and hard to access, while the country's flagship public pension plans are crippled by problems including insolvency risks, difficulties in expanding coverage and mismanagement.
-Fran Wang, AFP
Copyright Agence France-Presse, 2013