Job hunters search for job information at a job fair held in east China's Jiangsu Province on February 24, 2010. More than 1,600 jobs were offered at the fair (Xinhua)

China's population structure has begun to change with its growing elderly population and slow increase in the labor population, Wang Zhihao and Yan Jin, two economists with the Standard Chartered Bank, recently said in an article in Caijing, a well-known magazine in China.

Over the next decade, trends in the Chinese labor market will have a wide-reaching influence on the macro-economy and business environment in the country, they said.

Over the past 20 years, China's strong economic development momentum has created a great number of jobs, attracting thousands of migrant workers from rural areas to enterprises in cities nationwide.

Government family-planning policy, referring to the one-child limit imposed at the end of the 1970s, caused a drop in the number of teenagers in such large cities as Beijing and Shanghai. The policy also slowed the increase in China's overall population as well as the labor population, signaling that the Chinese population will age quickly between 2010 and 2020. During the past five years, the number of middle school students declined by 1.8 percent annually, or an average drop of 1 million each year. The new labor population has also declined in recent years, according to related statistics.

This also means that fewer workers are entering the labor market, putting pressure on employers to increase salaries. The pressure actually existed as early as 2002, not only this year, according to the two economists.

The number of students registering for the national college entrance examination declined in the last two years, from 10.5 million in 2008 to 9.6 million in 2010. This phenomenon has resulted in a larger proportion of students being able to enter institutions of higher learning in China. About 65 percent of examinees enrolled in colleges in 2009, for example.

Although some young people give up on the idea of higher education due to the low pay newly employed university graduates have received in the past two years, this scenario is unpopular and represents a tiny proportion of senior high school graduates.

China's labor market is experiencing a shift from coastal areas to the central and western areas in China, for many migrant workers prefer to receive a lower income at factories closer to home rather than live and work far away. As a result, manufacturing businesses in coastal areas are facing more pressure to increase wages because of the lack of workers, even during a worldwide recession.

"Although it is uncertain whether the age of cheap labor is at an end in China, the wage standard of the labor market is clearly tending to rise, for tens of thousands of workers in the manufacturing industry earn merely 1,500 yuan ($221) a month, 5 percent of the average monthly wage in the United States," Wang and Yan said. "In addition, many workers do not enjoy any welfare benefits."

The economists asserted that these two trends – the reduction in the labor force and the accompanying pressure to raise wages – may force manufacturing businesses to shift inland.

(Source: Caijing.com, edited by LI YUZHU)