Chinese Economy Since Deng Xiaoping Essay

Excerpt from Essay :

Lastly, the gender gap has meant that males need to engage in more intense competition for females. As a result, money has become a more important means of attracting females (Wei, 2009). These different factors combined to push more rural Chinese into the cities in search of better work. This in turn kept the cost of labor down, fueling intense economic growth that kept the unemployment rate in urban areas down. Even with the recent economic downturn, official unemployment rates for urban China were at just 4.2% for the fourth quarter of 2008, up from 4.0% in the previous quarter (Xinhua, 2009). These official figures have never fluctuated too much, although they were significantly higher in the late 1970s when economic modernization began, between 5-6% (Giles et al., 2004). It should be noted that the official unemployment rates belie the reality of China's economy, which features tens of millions of "floating labor" that moves from province to province following the work.

This rural-urban migration fuelled by the economic and demographic policies of the Communist Party of China have also had a significant impact on rural unemployment. Over 200 million Chinese have left rural areas since the economic reforms began. The percentage of people engaged in primary industries has likewise declined in that period, from around 70% to the 40% range. Moreover, the pressure of a male-dominated, one-child society has forced more rural Chinese, some 120 million of them, in to the floating labor pool (China Labour Bulletin, 2007). This pool may not be officially considered the rural "unemployed" but they are essentially rural workers displaced from the land by lack of economic opportunity. They pick up work in urban areas, but likewise are unlikely to be included in official urban unemployment statistics either, since that would require them filing for job search assistance from official government agencies.


It is sometimes difficult to separate the impacts of China's massive demographic shift from the impacts of the government's economic policies, since the demographic shift was itself the consequence of specific economic policy. What is evident, however, is that China has fuelled its economic growth with a surplus of workers born in the 1950s and 1960s. The generation that followed was significantly smaller, which has resulted in a number of impacts on the country's economy.

The pressures of the new demographic reality have increased China's savings rates among the working and placed significant unemployment pressure on the rural population. This population has now become the 120 million floating labor force that is seldom included in official employment statistics. That group, however, has contributed significantly to China's economic gain, since it is they who keep the cost of labor down, allowing for the rapid expansion of exports. This expansion, combined with the increase in savings rates sparked by the One Child Policy and lack of a viable social safety net, has fuelled China's rapid economic growth, which in turn has held unemployment rates in check, even in the rapidly growing urban areas.

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