Guest Editors' Words

Abstract

For this Special Issue we have endeavored to compile a set of papers that carry a coherent message to the readership of China & World Economy. The work builds upon and seeks to extend two recent topics of debate in China. First, we recognize and add to the literature on tightening labor markets, rising wage rates and the emergence of a new era in China’s economic development. Second, we contribute to the debate on the seriousness of inequality in China. This set of papers has three sub-themes. In the first paper, we draw on a large national representative set of data, which helps to set the scene for the rest of the Special Issue. This paper brings new evidence on China’s rural labor market. It looks at trends over time and documents the simple and clear fact that, at least among the younger cohorts (ages 16 to 40 for men and ages 16 to 30 for women), almost all individuals in China’s labor force have already transitioned from agriculture to the off-farm labor market. Although there are additional members of the labor force that are still engaged in farming, most of these are elderly men and middle-aged women. In the conclusion of the paper, we validate the observations of a number of researchers who believe that wages in China have begun to rise and, assuming labor demand stays strong, that the upward pressure on wages is here to stay. In the other two sub-sections, we begin to examine what this might mean for the future of China. Specifically, we attempt to answer questions about whether the labor force will be capable of meeting the demands of China’s economy two decades from now. To do so, we are implicitly making two assumptions: first, that a large segment of China’s future labor force (e.g. in 2030) are coming from rural areas of central and western China; and, second, that the quality of the labor force tomorrow will depend on the quality of human capital being built today. Our concern is that if children today in many rural areas of China are not