According to the latest census, China has a population of around 1.34 billion people, though population growth has nearly halved in the past decade compared to the decade before. Furthermore, population aging increased further not least due to the fact that according to estimates some 400 million fewer children were born as a result of the one-child policy introduced in 1978. The effects of these developments will start to be felt on the Chinese labor market as early as this decade.
"Even if the one-child policy were relaxed or lifted, the decline in the workforce potential could be alleviated but no longer prevented," says Professor Michael Heise, Chief Economist and Head of Corporate Development at Allianz. The turning point for China's labor market will be reached in 2013, according to findings from the recent Allianz Demographic Pulse. Further wage increases only seem to be a question of time, while Chinese companies have already begun to relocate their labor-intensive production operations to the interior of the country or even to Vietnam, Bangladesh or Cambodia in reaction to rising labor costs in the coastal regions.