China’s labor force was one of the most important factors contributing to the country’s unparalleled economic development over the past decades. Initially benefitting from its ample supply of cheap labor, the country’s demography and labor dynamics are now changing with the slowdown of the economic growth.
During the early years of the PRC, a strong political emphasis was placed on agriculture. Following the implementation of economic growth schemes, more importance was placed on industrial labor during the late 90’s and early 00’s. With the ongoing transformation of the Chinese economy towards a more service oriented industry, employment in the service sector underwent a considerable expansion over the past years and accounted for 42 percent of the labor force in China in 2016.
As the agriculture sector in China keeps losing ground, possibilities to find employment in rural areas has decreased substantially. This in turn led to a massive stream of migrant workers seeking employment in urban areas of China. According to the Chinese government, the number of migrant workers has reached 277.47 million in 2015. Among migrant workers in 2015, about 55.2 percent were under 40 years old, while 17.9 percent were elder than 50 years old. The female proportion of migrant workers amounted to 33.6 percent in 2015, which was 0.6 percent higher than that in the previous year.
The ever growing demand for qualified personnel fueled the labor market in urban areas of China. Average annual salary in China’s urban regions increased to about 62,000 yuan as the end of 2015. That being said, wage gaps between different regions were still relatively large. While the average annual salary in Beijing had reached approximately 111,000 yuan in 2015, the average annual salary in Henan province only reached about 45,000 yuan for the corresponding period.
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