China population rotating to stimulate inflation Economist: State

BEIJING - the census results of the China shows the world's second economy is almost a population pool that will be increases in salary auger, the rise in inflation and growth relatively low, an economist prominent Government said in comments published Thursday.

BA Shusong, a senior economist at the State Council Development Research Center, which advises the central Government, said the data of the Census of 2010 published last week, with a clutch of other statistics, showed China's abundant labour supply would begin decreases rapidly.

"Current data show China has already crossed the turning point of Lewis, and at the same time, the window of the demographic dividend will soon close", Ba wrote in the economic information daily.

BA was referring to the victory of Nobel Laureate economist Arthur Lewis theory which, as a developing country, modernizes, salaries of workers begin to rise quickly once rural labour surplus shrinks to the point that the emerging labour shortages.

"The shortage of rural migrant workers since 2004 were no blip passage, but the signal that a major turning point is at hand - a transformational trend", wrote the Ba.

Census data published last week showed that the proportion of young Chinese is shrinking as the population grows.

The proportion of Chinese aged 14 or younger was 16.60%, a fall of 6.29 percentage points of the number in the 2000 census. Persons aged 60 or older increased by 13.26% of the population, 2.93 percentage points.

Many economists predicted that China is entering a demographic transition that produce important economic consequences. But the comments of Ba, which advises central decision-makers, has shown how these concerns may feed in the planning of inflation, growth and consumption in the years to come.

Converging consequences of a surplus of work disappear and the transition to an aging population with more retirees are not dependent on their family and social protection will be a "huge challenge" for China, the Ba has written.

He wrote "increase in the wages of the workers will push the heart of cost so that the low inflation possible when the supply of labour was abundant will be untenable,". "Second, after crossing the turning point, economic growth will be experience slowing systemic."

China has about 242 million rural residents who work off the farm, and approximately 153 million of them are migrants working outside their city of origin.

Revenues of the country, rural areas in China increased by 10.9% in 2010, exceeding an increase of 7.8% of the urban income, reflecting increase in wages for hundreds of millions of migrant workers.

The China price index increased by an annual 5.4% in March, the highest increase of almost 3 years, and some analysts have said that the Government faces a difficult task now to its target of annual inflation of 4 percent, the costs of work increases and rising prices of raw materials and fuel.

BA, stated that China need more even distribution of income to ensure that the consumer can consolidate economic growth.

"Will slow the pace of growth of investment, and the driver of economic growth will rise from investment to consumption," wrote.