Meanwhile, studies show that the average growth rate of China's working-age population is not as high as people tend to think. It is expected to stand at 0.4 percent in the next few years against an average level of 1.1 percent in developing countries.

In addition, the proportion of children to the total population will continue to fall, and that of the elderly will rise. As a result, the upward trend of capital accumulation attri-butable to high productivity and an excessive savings rate will disappear. By 2050, China's demographic structure will appear to be nearing an inverted pyramid, and the country will grow old before it gets rich.

Foreign scholars have proposed two solutions: changing the family planning policy to raise the fertility rate from 18 per thousand to 22 per thousand and increasing the participation of the elderly in economic activities. Under current conditions, what do you think is the best way for China to maintain a demographic structure favorable to long-term economic growth?

Demographers refer to the change in labor supply from unlimited to scarce as the Lewisian Turning Point. It is sure to occur in China during the 11th Five-Year Plan period (2006-10). The years between 2004 and 2009 will be a period of balanced demand and supply of agricultural workers. After this period, both supply and demand will fall. This means that the shortage of workers in urban areas, which has become an increasingly serious problem in recent years, will no longer be occasional and policy-driven, but represents a general trend proved by changes in the labor market. Since 2002, China's real unemployment rate has been falling, while the labor force participation rate has been rising since 2004.

Will the Lewisian Turning Point be a blessing or a curse? This depends entirely on whether we can foresee, understand and address it properly.

When we have a growth mode that caters to national conditions-ample supply of cheap labor and capital-we should do everything possible to ensure full employment. The experiences of East Asian economies have shown that labor-driven economic growth can be shifted to technology-driven growth in the long term.

Simply put, as the growth mode changes and new growth stimuli are created, China must make full use of current favorable conditions, a result of the unlimited labor supply, to expand employment and maximize the demographic dividend. It must also use this time to develop education and training and accelerate labor transfers, including removing barriers in this aspect, so as to maintain the resources of labor growth.