Why A Labor Shortage Is Good News For The Chinese Economy
I saw Viny's post on China's prospective labor shortage and seemed like this was an interesting article. Panos Mourdoukotas writes for Forbes that the labor shortage, although bad news for China in the short-run, may be beneficial for the Chinese Economy in the long run. This is because other economies that depended on surplus labor, when faced with labor shortage, innovated labor-reduction methods that led to economic growth. While China has been benefiting from high growth rates, there also seems to be a consensus that their economy will slow down. It will be interesting to see whether the Chinese can successfully adapt to the changing circumstances of their economy.
1 comment:
Why on earth would someone discussing the potential positive long-term consequences of a labor shortage reference the Great Leap Forward? It also seems like "labor-reduction methods" could potentially lead to an increase in unemployment, which is certainly something the Chinese authorities would want to curtail as much as possible. Rising unemployment wouldn't exactly bode well for regime stability.
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