16 March 2016

The End of the Chinese Miracle

Have you ever heard of the Lewis Turning Point? Neither had I until I watched this fascinating short documentary by the Financial Times, part of their ongoing End of the Chinese Miracle series.  The Lewis Turning Point is the point at which surplus rural labour reaches a financial zero.

Although this is hard to take in, at least on this massive Chines scale. Essentially, it means that there have been so many Chinese people going to live in cities that rural labour is suffering a shortage, which pushes up wages.

In fact, migrant wages have more than doubled over the last seven years.  Before you rush off to China, however, there are a few things you might want to take in to account.  First and foremost, the Chinese population (much like most industrialised nations) is aging rapidly.  When you take this is in to account then the rise in migrant workers’ wages means that we might not be able to rely on this vast and ancient culture to do what it has been doing over the last decade – providing the rest of the world with a deluge of cheap goods.

Plus there’s a dilemma for older workers – of course!  However, if you like truly staggering facts and figures (such as the population equivalent of the shift from country to city in China represents 88 Londons) then this really is the video for you.

Watching this I was really struck at how difficult it was for me to take in these figures – that a single country has this amount of people (despite the fact I was well aware of the enormity of the Chinese population!).  It is, hwever, a fact of twenty first century life that what happens in China will inevitable have a knock on effect on the rest of the world – it truly is their century.  It’s not so much the butterfly effect but perhaps the great big enormous panda effect instead!