Window of opportunity to foster talent dividend to drive industrial upgrading

China’s population decreased by 2.08 million last year from a year before. The decline in the number of births underlines the urgency with which the country must take timely measures to encourage people to have children.

There is an aging population too. Given that China’s annual new labor force will keep increasing till 2035, the country should take advantage of this time window to realize a transition from demographic dividend to talent dividend.

Governments at all levels should increase welfare for people’s livelihood, reduce the costs of childbirth, parenting and education, and provide stable and secure public rental housing for young people in big cities. With the orderly transfer of industries and the deepening of domestic circulation, labor costs are expected to continue rising against the backdrop of a decline in the number of laborers.

The country should improve production efficiency through scientific and technological innovation and by improving the overall population quality, to absorb rising labor costs and maintain the global competitiveness of its manufacturing enterprises.

Considering it is unsustainable for wages to rise faster than productivity in some industries, the country must speed up the creation of human resources with good quality, sufficient quantity, optimized structure and reasonable distribution, accelerate the pace of industrial upgrading, improve the added value of products, and support higher manufacturing labor costs with higher profits.

The country should also cultivate diversified and multilevel human resources that meet the needs of economic and social development, promote the integration of multiple disciplines, strengthen the docking of supply and demand, and extend the talent training chain to the emerging industries. The government should adopt systematic policies and, in particular, it should try its best to increase young people’s sense of stability and security in the process of the country’s economic transformation.