In recent decades, China has produced cheap consumer goods for the world. The aging of China’s population can throw sand into the production wheels of the “world factory”.
Inexpensive labor has also guaranteed Finns cheap products from China. However, the flow of cheap products is threatened by a labor shortage if China’s economic growth begins to grow strongly.
– If China’s economic growth takes off now after the corona restrictions and the supply of labor comes under pressure, it will probably also mean rising prices here, says Nordea’s chief economist, China expert Wind Birch On Radio Suomen Päivä on Wednesday.
The labor supply in China is also partly reduced by the fact that the population is aging and shrinking. Almost a million fewer people live in China now than a year ago, as reported on Tuesday.
Population growth affects economic growth, but according to Koivu, China’s decades-long economic growth has not only depended on population growth.
– Yes, China’s biggest leap in economic development over the last 40 years is on the productivity side. In the late 70s, we started from the fact that almost all Chinese did very unproductive agricultural work in the countryside without machines and equipment. It was very manual work. Very low productivity work was also done in the cities.
Migration to the cities has become boring
The historically large migration from the countryside to the cities has been an important engine of China’s economic growth. Now he’s coughing too.
– Migration from the countryside to the cities has also almost collapsed. It has also certainly slowed down economic development. People don’t go to more productive and demanding jobs, says Tuuli Koivu.
When a labor shortage threatens China, many companies are now looking for other “factory locations” in the world, for example in Southeast Asia, Tuuli Koivu says. However, population growth is strongest in sub-Saharan Africa.
– For example, very few Finnish companies operate there. And now we should somehow get African countries to integrate into these production chains, Koivu states.
You can discuss the topic on 19.1. until 11 p.m.