China's Changing Labor Scene

Filed in archive News on July 9, 2010

© Stas Kulesh


The China Law Blog had a good piece recently on how the labor scene in China is changing. It's not really an in-depth analysis; it's more of a statement of the simple facts...

A clear statement of the facts on labor in China seems necessary because China's labor scene really is changing. The stereotype of a huge Yellow Horde of cheap and abundant labor is still around as a stereotype - but it hasn't been true for a while now.

While China's labor pool may still be huge, it's also busy. And there is a more work to do than labor to do it in China now. In other words, China has a labor shortage. And the laws of supply and demand being what they are, labor is no longer cheap. Labor costs are going up in the manufacturing sector and in major cities because of the labor shortage and because of the new labor laws.

To find a reasonable labor pool if you're setting up shop in China, you need to be in the second-tier cities - places like Guilin, Changsha, Zunyi, or Nanchang. There are dozens of such cities in China's interior. But the idea that you're going to find the workers you need at affordable wages in Guangzhou or Shanghai makes you, well, delusional...