Structural Factors of China's Labour Market (Essay Sample)

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Structural factors of China’s labour market
China’s labour market has undergone overwhelming changes over the last few decades. The Chinese Renaissance to the economic powerhouse in the recent past has been credited to some changes in the overall economic perspective of China. The labour market is the actual supply and demand for labour in an economy or region. The state initially adopted the central planning system that derailed actual exponential growth in the country. However, the Communists government has initiated changes in all the facets of the Chinese economy easing barriers to labour markets in the state (Buckley, 2002). The essay evaluates the actual structural changes China has undergone until today to exhaustively support the essay’s argument that the changes have brought success to the state. Some of the structural changes implemented in the state are favourable legislations, enhancement of labour mobility, change in entrepreneurship patterns, compensation of labour and availability of jobs in the state. The essay evaluates the changing labour trends in global labour markets that are witnessed in China.
Mobility of labour
Previous economic systems in China operating under the central planning system discouraged mobility of labour as a factor of production. The system allowed for only rural and urban workers. The rural workers were relatively farmers while the urban workers worked in manufacturing firms owned by the state. However, the Communist government allowed mobility of labour through enhanced skills development in the country. The state explored the opportunities of an export-oriented economy in terms of labour to offset unemployment in the state. The state has in the recent past been involved in the provision of credit for infrastructural development in African countries and actual implementation of the projects in the states. Today, China is the largest trading partner in Africa, with some firms opening up new outlets in the region. Some of the companies are Huawei, China Bridge and Road Corporation (CBRC) and Foton Motors. The firms have opened up new employment opportunities for Chinese workers in the new frontiers. Interestingly, flights from China to major African cities such as Lagos, Nairobi and Johannesburg have more than tripled in the last five years. The Communists policy change on the mobility of labour has enhanced the burgeoning growth and expansion of the economy (Knight, 2006). However, critics argue that the Chinese policy on mutual trade has more than favoured the state, unlike the country’s trading partners. Evidently, trade figures indicate China’s balance of payment between trading partners especially Africa, favouring the Asia powerhouse. However, documented evidence indicates most African Nations are at the infancy stage of development and that accounts for the disproportionate balance of payments (Rosenthal, 2003). Developing nations consume more capital goods to grow and expand economies.
Entrepreneurship
The central planning system denied citizens rights to establish businesses as the economy was more state-owned. Many manufacturing firms in the urban regions were state owned. However, the inefficiencies associated with state control of the economy and increased unemployment resulted to changes in the policy. Furthermore, previous hunger strikes in the nation killed more than 20 million citizens due to the inefficiency associated with the production of food at the village level. Therefore, the state allowed for citizen entrepreneurship that sparked production, labour demand and income generation for the economy. The population in the nation as exponentially increasing and the workers were yearning for jobs. The Communist government established an economic policy to enhance production to meet local and local demand. Therefore, the state established incentives for the agricultural sector by allowing household production and government incentives. The reforms enhanced household production, increased business opportunities, reduced rural-urban migration and increased incomes for the workers. Today, Chinese workers are estimated to receive 5.5 times income more than the US and the European Union (EU) workers. The state is credited to have among the most billionaires in the Asian region and higher income levels for the workers. Evidently, the largest markets for goods such as mobile phones in the world are China, owing to the enormous population and higher disposable incomes. Apple, the world largest mobile phone company by capitalization, accounts for over 25% of mobile phone sales to China. However, critics argue that the increased levels of entrepreneurship have resulted to worse working conditions for the workers. Interestingly, the labour market is among the most controlled markets in China with stiff penalties imposed by the state on unlawful practices. The state has implemented stringent laws against the vice.
Workers compensation
The central planning system focused more on price stability across all facets of the economy thus enhancing rigid prices in all sectors. The system allowed for the determination of prices of goods and services in the economy to reduce the vagaries of price fluctuation. Therefore, the system allowed for rigid wages for the workers. Moreover, the systems policy on non-dismissal of workers reduced productivity. Furthermore, workers were poorly motivated. The system allowed for unequal income distribution among workers in the state. The conditions enhanced unequal standards of living for different workers in the economy. Also, agitation by workers for better pay and working conditions forced the state to rethink the compensation policy for the workers. Therefore, the state instituted regulations on minimum pay, minimum working timelines and minimum working conditions for the working population. Moreover, the state invested in education to enhance a large of pool of skilled workers to propel the state. Consequently, higher numbers of skilled workers allowed the nation to industrialise technically and achieve industrialised state status (Sapir, 2006). Chinese workers receive more than US $435 annually than US workers cumulatively. Critics have argued that the large difference in cumulative earnings unlike workers elsewhere is as a result of the large worker base in the nation. Also, the states control over the segment offers little room for workers to voice for worker concerns and welfare. However, evidence on the living standards and higher purchasing power exhibited by the Chinese workers offers a different picture altogether.
State policies
The Communist government established that an export-oriented economy would enhance job and wealth creation for the state. The state focused more on increased production for export markets and enough supply in the local market. The state has in the recent past reduced barriers to trade, enhanced lower wages regime than other nations, enhanced infrastructure to support industries and established incentives to attract foreign direct investments. Prior to the change of state policy, the previous plan allowed for meeting local production to reduce the vagaries of fluctuating prices. Ini...