湖 北 工 业 大 学
研 究 生 考 试 答 题 纸
考 试 科 目 专业英语 研究生姓名 周 学 号 120140094 任 课 教 师 刘辉 学院、 专业 电力电子与电气传动 成 绩
二0 一五 年 五 月 三十 日
The Dilemma and Solutions of \"Made in China\" When
the Population Dividend is Disappearing
Abstract
China has enjoyed the demographic dividend for 30 years since 1990s. Adequate supply of labor and lower wage promotes the fast development of \"Made in China\". But in recent years, the shortage of labor force in China is increasingly prominent because the aging of population has more deepened. With the Labor cost continuing to rise and demographic dividend gradually disappearing, \"Made in China\" has entered into an unprecedented predicament. In response to this dilemma, Chinese manufacturers only achieve sustainable development through the transformation and upgrading, regional metastasis, brand promotion and other means.
Introduction
1. The connotation and advantages of \"made in China\"
“Made in China” generally means goods made in China are using country of origin labeling. It is a widely recognized global label. In all kinds of goods, including of electronic components, the clothing and shoes, the label can be seen. China has become the world’s largest exporter of industrial products. 70% of the world’s toothbrushes and 75% of toys are made in China. 100% of microwave is also made in China. China manufacturing is everywhere. The figure 1 shows the world export trade comparison in several major countries in 2012. It can be seen from the figure that China has become the largest exporter. As a major exporter, “Made in China” has become an important driving force of the world economy and trade development.
Fig.1 World Export Trade Comparison in 2012, According to Country Report. The large advantage of “Made in China” is mainly from the low cost, but this advantage has mainly been reflected in lower labor cost. The figure 2 shows the comparison about paid of the industry in the several countries. The chart highlights advantage of low labor cost in China. It is the labor cost advantage so that “Made in China” has made considerable progress, and a great contribution for Chinese economic development.
Fig.2 Manufacturing Hourly Wage Comparison in Some Countries (USD) in 2005,According to U.S. Bureau of Labor and Global Research of Standard Chartered Bank
2. Population dividend disappearing and the goods made in China that price is increasingly high
The so-called population dividend means a larger proportion of working population of a country’s total population, and the dependency ratio is relatively low, which creates favorable conditions for economic development. The economy situation of the whole country is high savings, high investment and high growth. A rapid decline in fertility in the country is caused by accelerated aging of the population, while children’s dependency ratio has declined rapidly because of rising proportion of the population of working age. The proportion of the elderly population before reaching a higher level will form relatively abundant labor resources, and lighter dependency burden, which make a country enter into a “golden period” of very favorable economic development. The population economists call the above phenomenon “Demographic Dividend”. In the population dividend period, the working age population ratio is a potentially significant advantage, labor participation rates and employment rates are maintained at a high level, which provides rich labor resources for economic growth. Since 2000, China has gradually entered into an aging society, and the aging process is gradually speeding up. At the end of 2012, the proportion of 60 years of age or older is 14.3% of the total population. To 2033, the proportion of the elderly population will rise to 25.4%; in 2050, will rise to 1/3, close to the level of developed countries. According to the figure 3, it is clear that China working-age population will begin to decline after 2015, the growth rate of the working population is rapidly declining. The demographic dividend will disappear,
and the manufacture in China will lost traditional competitive.
With the disappearance of the demographic dividend, China’s labor costs are getting higher and higher. Some data show that the average Chinese wage increase 26% from 2010 to 2012. But under the same conditions, the cost of production in Vietnam than in China lower 15-30%; the average monthly salary of Chinese workers has reached $ 413, which is more than three times of Vietnam and Indonesia’s. The traditional competitive advantages are disappearing in China. Many factories begin moved to Southeast Asia that having more cheap labor.
3. The dilemma of \"made in China\" when the demographic dividend is disappearing
3.1 Facing labor shortage an recruitment difficulties With China's seemingly inexhaustible cheap labor created a miracle for three decades of rapid economic development, but in recent years China has been suffering a wide range of \"labor shortage\". Since the arrival of the Lewis turning point, and reducing the labor force, China will face the recruitment difficulty in the long term future.
3.2 Rising labor costs and corporate profit declining
“Made in China” mainly rely on cheap labor to create value for profit, as the demographic dividend disappeared, it will inevitably lead to rising labor costs. Passing on rising costs to downstream is difficult for enterprises due to the competition between enterprises, consumer goods price controls. Therefore, corporate profit will inevitably decline in the cost of being invaded.
3.3 Products made in China with the low added value and the lack of core technology
In the world manufacturing industry chain, the majority of Chinese
enterprises is only in the downstream. Chinese manufacturing is mainly done through the processing and assembly, which products are low value. Currently available is the comparative advantage of cheap labor. But R & D and marketing is done by other countries shifting products. With the disappearance of the demographic dividend, the original cheap and abundant labor advantage disappearing, and the lack of core technology, the development of \"Made in China\" will be more difficult.
3.4 Lack of the talent and lower labor productivity
“Made in China” mainly relies on cheap and abundant labor, but mostly lower labor workers, and the talent is lack. Industry labor productivity is lower. In developed countries, skilled workers account for more than 35%, mid-level workers accounted for more than 50%, but junior workers only accounted for 15%. But in China, these data is 4%, 36% and 60%. So, it is difficult to existing technologies into practical productive forces, it is difficult to absorb foreign advanced technology, and to promote technological innovation, which is weakening the international competitiveness of \"Made in China\".
4. The ways of solving the dilemma
4.1 Demographic dividend disappearing will forced \"made in China\" to transform
China depends on cheap labor and consumes a lot of resources to expand manufacture, its base is fragile. When the advantage lost after the population ages, companies should focus on the transformation and upgrading. Demographic dividend should shift to talent bonus. For this reason, companies will be faced with the inevitable development trend of transformation and upgrading when demographic dividend is gradually disappearing. The transition is from labor-intensive industries to capital-and technology-intensive industries, and from the number of the demographic dividend to personnel quality. Maybe, \"Made in China\" can achieve sustainable development by only the way.
4.2 Improving technological content of Chinese exports by learning and development of the core technology Exports should be from the simple pursuit of quantity expansion to quality improvement changes, and constantly improve the technological content of export products, optimize the export product structure and improve efficiency. Most Chinese enterprises are in the end position of the international division of labor. They need to improve the technological level of production, to study and make high-ended product, and to enhance the overall competitiveness of \"Made in China\" in the world. In the background of the demographic dividend disappearing, China should turn the crisis into an opportunity and solve the chronic disease of \"Made in China\" so that China can from the manufacturing country to the manufacture power.
4.3 Training of highly qualified personnel
China has close to a turning point of the disappearance of the demographic dividend. The amount of labor no longer has an absolute advantage. The key to keep unit labor cost advantage lies in the level of education and rising workers’ skill. Enterprises should strive to improve the quality of workers, increase training funding, establish and improve educational institutions and corporate internship training mechanism to promote new labor standards and business need smoothly. Improving quality of worker can improve production efficiency, thereby technical performance and product quality will be enhanced accordingly. Improving the quality of labor force is the key to increasing the competitiveness of \"Made in China\".
4.4 Transferring industries to central and western regions
The central and western regions have all conditions “Goose Model” required. Differences in the development stage between the various regions in China lead to the demographic transition lag in the central and western regions. The sixth census data shows that the national natural population growth (birth rate minus death rate) was 5.05 ‰, the eastern region with an average of 4.68 ‰, the central region with an average of 4.73 ‰, the western region with an average of 6.78 ‰. Accordingly, after excluding the factors of population movements, population dependency ratio of the central and western regions is still below of the eastern regions. So, the overall demographic dividend is about to disappear, while in the Midwest the potential can be tapped.
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