New Challenges in China's Inland Labor Market

As manufacturers pressed by rising wages and falling profit margins in China's traditional coastal industrial hubs begin to shift production to China's heavily populated interior provinces, companies are facing a new challenge: labor shortages.

For more than a decade, high numbers of Chinese workers from the country's underdeveloped rural hinterlands have been migrating to coastal cities. This dynamic has reduced working-age populations in inland cities and created labor imbalances that are complicating attempts to develop the interior. To restructure the economy away from overreliance on external demand and achieve more sustainable economic growth, Beijing recognizes the urgent need to resolve this dynamic.