Labor: China's massive challenge - Ben Cavender

Ben Cavender

Rising wages have already put China in the same cost-league as Portugal and South-Africa, forcing manufacturers to low-wage countries. But that is only one challenge for a major shift in the labor market, says business analyst Ben Cavender to CNBC.

CNBC:

As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50. 

Apparel manufacturing has been hit "extremely hard," said Ben Cavender, a principal at Shanghai-based China Market Research. "The result has been that factory owners have gone on a massive investment spree outside of China."... 

With fewer jobs available — and perhaps more robots buzzing on factory floors — experts maintain unemployment will be an ongoing concern, especially as the government works to maneuver the world's second-largest economy away from manufacturing and toward services. 

"You're talking about a way to re-skill millions of workers, but it's not clear what jobs they're going to be placed into," Cavender said. "They're creating white collar, clerical jobs here as quickly as possible, but it's still not enough to go around."

More in CNBC.

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China´s jobless numbers are meaningless – Sara Hsu

Sara Hsu

While the government is fearfully watching China´s number of jobless, the official figures have very little meaning, says financial analyst Sara Hsu at the Deutsche Welle. "We do not even know the labor force participation rate, which is essential in calculating the unemployment rate."

The Deutsche Welle:

Notwithstanding the indications in support of a tightening job market, many economists doubt the reliability of China's official unemployment data, with some claiming the country's real jobless rate could be as high as 10 to 12 percent. 

Sara Hsu, an assistant professor and expert on Chinese economy at the State University of New York at New Paltz, says the official statistics cannot be relied upon since they focus mainly on the total number of people who are registered as unemployed. 

"But not everyone who is unemployed registers at the local employment service agencies, since benefits are insufficient," she told DW, adding that "we do not even know the labor force participation rate, which is essential in calculating the unemployment rate."

More at the Deutsche Welle.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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