China is already facing the challenge of a shrinking labor
force. Its working age population—16 to 59—declined by more than 2 million
people, to about 920 million last year, compared with 2012. And while the total
number of migrant workers is still increasing slowly, up 2.4 percent, to 269
million, last year, many lack needed skills. That’s despite the fact that wages
keep rising, up about 14 percent, to around 2,600 yuan ($427) a month last year.
China is aiming to shift its economy to higher-value-added industries and
lessen its reliance on low-end, low-skill manufacturing of shoes, clothes, and
toys, a process officials have dubbed tenglong huanniao, or “clearing the cage
and changing the bird.” To meet the skills gap, the government will offer more
training programs and educate at least 10 million migrants a year. Beijing
intends to provide training by 2020 for the entire “new generation” of migrant
workers, or those born after the 1980s, which now number about 100 million,
according to Yang. Beijing will also provide small loans ranging from 50,000
yuan to 100,000 yuan to support migrant workers who want to start their own
businesses in their hometowns.
http://www.businessweek.com/articles/2014-02-21/chinas-growing-ranks-of-migrant-workers-now-lack-skills#r=nav-r-story
This transition from low-skill manufacturing gigs to value-added industries is vital for the Chinese economy. The change towards value-added industries may attract people and businesses to China and thus expanding culture. This wave of new minds may also bring technological advances that will place China even higher on the science and math charts compared to the rest of the world. Lastly the economy is surely to expand by increasing skilled labor and decreasing unskilled labor. China already has the largest population in the world so the need for unskilled labor will continue to be a diminishing return as technology improves.
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