The redistribution of wealth – housing policy, demographics, and labor shortages (Part 1)

30 May

In this article I discuss the shift in demographics that is causing a labor shortage in China.  This is set to have an impact on workers’ rights/power, and specifically housing policy (and all things related, including raw materials, political appointments).  This might all point to a period of social improvement and a trend of “wealth distribution” after 3 decades in which growth averaged 9.9% per annum.

According to an article in the FT this weekend, Honda has asked its Chinese workers to sign a pledge to refrain from industrial action (  The factory in Guangzhou is closed due to unprecedented striking.  But it looks like the workers are holding out.

This is a symptom of a tipping point in Chinese economy with ramifications far beyond Honda’s JV in China: a labor shortage.

This shortage is the result of both a change in demographics and migration.  Since the mid 80’s the percentage of China’s population over 65 has doubled to 10%. On the other side of the pyramid, the proportion over 0 to 14 year olds has shrunk to 17% from 28% over the same period.  In between these two age groups, the proportion of those under 40 and able to work in heavy industry has declined too.  In addition, the pool of migrant workers has slowly reduced over the past 30 years, as many of those interested and able have already moved from rural to urban life.

So the ramification ironically is “power to the people”.  This can be seen most clearly in the housing market…

For Part 2 – either see the blog entry above this one, or go to the link below:


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