Action needed to narrow wealth gap - Zhang Juwei

Zhang Juwei

The wealth gap in China, reflected in the gini coefficient, is moving into dangerous heights, and government action is needed to narrow to divide between rich and poor, says professor Zhang Juwei, director of the labor and social security research center at the Chinese Academy of Social Sciences to the China Daily.

The China Daily:

The Gini coefficient - a measure of income inequality commonly used by economists and institutions - reached 0.47 in China in 2005, overtaking the recognized warning level of 0.4, according to the World Bank. 

Although no new calculation has been released to gauge the latest situation of income inequality in China, the previous World Bank figure basically represents the nation's current situation and the gap is widening dramatically, said Zhang Juwei, professor and director of the labor and social security research center at the Chinese Academy of Social Sciences. 

Zhou Tianyong, senior economist of the Party School of the Central Committee of the Communist Party of China, said in a recent article that in 2008, the Gini coefficient was 0.47 in China. 

"When the Gini coefficient reaches around 0.5, it means the inequality problem is extremely severe and needs immediate action to bring it down," Zhang said... 

As for solutions, analysts are divided on where the strongest measures should be taken. Zhang said the emphasis should be placed on the primary distribution of national income. "It is the root of the income distribution system. The government should do more to raise the proportion of laborers' incomes in the income basket, which has been declining for years," he said, adding that capital investment has been a major reason for the disproportionately high ratio of wealth held by the rich. 

He said raising farmers' incomes is a practical measure and by doing that, the salaries of low-income groups like migrant workers would also go up.

More at the China Daily.

Zhang Juwei is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.

The repositioning of China's labor market - Zhang Juwei

Zhang Juwei

Cheap factory labor is phasing out in China, but the country has new assets to offer in terms of labor, says Zhang Juwei, deputy director at the Chinese Academy of Social Science (CASS) in the China Daily. Now, high-qualify labor for a lower price might offer just that opportunity.

The China Daily:

According to Zhang Juwei, deputy director of the Institute of Population and Labor Economicsunder the Chinese Academy of Social Sciences, China's work force is now attracting overseasenterprises because of its performance-cost ratio rather than just its low cost. "It is the relativelylower cost of higher-quality labor rather than purely the low cost of labor that attracts foreigncompanies now," he said. 

This is because China's labor market does not offer enough positions for graduates; so withsupply exceeding demand their starting salaries are not much higher than those without college diplomas, he said.... 

"China needs to seize the opportunity to redefine its position in the global industrial chain, andattract more professional jobs rather than low-paid manufacturing jobs for its laborers," said Zhang.

More in The China Daily.

Zhang Juwei is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

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Government should limit salaries SOE-execs - Zhang Juwei

Zhang Juwei

Chinese executives of state-owned giants are following their Western counterparts in the salaries they claim from their companies. Wrong, says Zhang Juwei, director at the Chinese Academy of Social Sciences in the China Daily. The government should limit their salaries. The China Daily:

Zhang Juwei, deputy director of the Institute of Population and Labor Economics under theChinese Academy of Social Sciences, said the government should set a long-term mechanismto limit the salary of SOE executives even if the companies are performing extremely well. "These executives are not recruited from the market but assigned by the government. Manyhuge SOEs have important social functions to provide welfare to society, such as energy andtransportation," said Zhang. "Paying too much will also affect the feelings of civil servants whodo a similar job to the SOE executives." Zhang suggested imposing regulations on the salary of SOE executives based on the salariesof civil servants at an equivalent level.

More in the China Daily Zhang Juwei is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.  

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Labor shortage will cause stagnation - Zhang Juwei

Zhang Juwei by Fantake via Flickr

China's economy will face stagnation in the short term because of the ongoing shortage of labor, tells CASS-professor Zhang Juwei state news agency Xinhua in a dispatch about the effect of aging, based on the latest results from the National Bureau of Statistics.

"The potential emergence of a labor shortage is likely to contribute to slower economic growth in the short term," said Zhang Juwei, professor and director of the Labor and Social Security Research Center at the Chinese Academy of Social Sciences.
China has already reaped the benefits of a demographic dividend, which is believed to have played a role in the country's economic breakthrough, having enjoyed the advantage of abundant cheap labor for decades.
"Wage increases are the most direct response to labor shortages. That will definitely squeeze the profit margin for some low value-added manufacturers," Zhang said.

More in Xinhua.

Zhang Juwei is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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Labor force will shrink after 2015 - Zhang Juwei

Zhang Juwei by Fantake via Flickr

Are you already worried about the shortage of labor and its rising costs in China? Zhang Juwei of the Chinese Academy of Social Sciences (CASS) tells Business Week the real labor problems are only developing after 2015.

The workforce—those from 15 to 64 years old—will plateau at almost 1 billion in 2015 and then start to shrink, figures the World Bank. These trends will help drive labor costs higher. "Over the next 10 years, this will become a serious problem," says Zhang Juwei, deputy director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences.

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Do you want to hear more from one of China's leading academics on its labor force? Zhang Juwei is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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'Black children' a rural myth - Zhang Juwei

Zhang Juwei  by Fantake via Flickr

For a long time the existence of 'black children' at China's country side- offspring outside the country's one-child policy and not accounted for in its statistics - were seen as an illegal but useful counter measure for the aging problem and the shortage of cheap labor. But the rural fertility rate is not as high as many hope for, tells CASS-director Zhang Juwei in The Economist. 
The Economist:

The recent CASS report said the rate that would be expected if women had exactly as many children as allowed would be 1.47. The government uses the higher figure believing that many “black children” were missed by censuses. But the report disagreed, saying such serious underreporting was unlikely. It said data showed that the 150m-strong migrant population has a fertility rate of only 1.14 (similar to that of registered urban residents). This belies the common image of migrants as big producers of unauthorised offspring. Zhang Juwei of CASS believes the overall fertility rate is no higher than 1.6.

China cannot avoid its looming ageing problem, but these lower fertility estimates suggest its impact could be greater than officials have bargained for. The CASS study calls for a “prompt” change of policy to get the fertility rate up to around the “replacement level” of 2.1. The problem could be in persuading Chinese to have more children. In cities and wealthier rural areas, surveys found that the number of babies women said they actually wanted would produce a fertility rate well below 1.47.

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Zhang Juwei is a speaker at the China Speakers Bureau. Do you want to share his insights at your meeting or conference? Do get in touch.

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