China seeking to overcome labour shortage by improving skills

China's working-age population has been growing slowly, with rural surplus labor down to about 20 million from 150 million in recent years. In a report, Institute of Population and Labor Economics, of Chinese Academy of Social Sciences, calls for the second labour advantage, by improving labor skills and increasing the level of education.

The average student in the countryside attends school only 6.8 years, despite the country's mandate for a nine-year compulsory education.

The report found that a rural resident who finishes senior high school will have a higher productivity rate - 21.1 percent - compared to 8.8 percent for those who only finish lower levels of education.

In the city, the government should encourage more residents to receive more education after high school, said the report. Those with further education earn at least 29 percent more.

The current average time for schooling is 9.5 years.

The report notes that in the manufacturing sector, one more year of education increases productivity by 17 percent.

This item was forwarded by a Chinese friend. It was published in the China Daily, on 10 Sept 2009, "China losing global labor advantage".