China is going through a period of the “demographic bonus” with the richest
supply of labor and the lightest burden of population dependency. If enough jobs
can be created during this period, China can benefit from an abundant labor
force for economic growth before the aging population peaks in 2030.
Regional differentials in the demographic transition resulted in a varied popula-
tion situation, leading to varied local conditions regarding labor supply and pres-
sure on the social security system. Internal migration can be the bridge to match
the conditions necessary for harvesting the demographic bonus in both rural
and urban areas. Migration provides economic opportunities to those migrating
from poor rural areas while at the same time solving the problem of shortage of
young laborers in the urban areas. Even though exporting and losing a young
able working force, rural areas are benefiting from migration through reduction
of the unemployment rate and from remittances. On the other hand, migrants
from rural areas are providing an almost unlimited labor supply for the growing
urban economy
With the rapid aging process, the favorable age structure and the current
golden opportunity for economic growth will disappear in about 20 years’ time
nationally, and the demographic window will close thereafter. An aged China
will eventually face the overall shortage of a young labor force, and this will lead
to significant shifts in the economic structure.
