In 1954 Arthur Lewis, a lecturer in Economics at Manchester University in the UK, published a landmark paper on what happens when industrializing economies begin to run out of cheap labor. This was his conclusion, as described by The Economist:
When an economy first becomes industrialised it grows very fast by importing foreign technology and employing capital and plentiful, cheap, unskilled labour from the farm. But after a while the extra agricultural labour is put to work and wages start to rise. This makes firms less profitable and they have to come up with their own technology to keep growing.
The point at which this happens has come to be known as “the Lewis Turning Point.”
Is China there yet? Not quite, according to researchers at the IMF, but it’s getting awfully close. In 2013, they published a paper titled “Chronicle of Decline Foretold: Has China Reached the Lewis Turning Point?” Here is the abstract of the paper:
China is on the eve of a demographic shift that will have profound consequences on its economic and social landscape. Within a few years the working age population will reach a historical peak, and then begin a precipitous decline. This fact, along with anecdotes of rapidly rising migrant wages and episodic labor shortages, has raised questions about whether China is poised to cross the Lewis Turning Point, a point at which it would move from a vast supply of low-cost workers to a labor shortage economy. Crossing this threshold will have far-reaching implications for both China and the rest of the world. This paper empirically assesses when the transition to a labor shortage economy is likely to occur. Our central result is that on current trends, the Lewis Turning Point will emerge between 2020 and 2025. Alternative scenarios—with higher fertility, greater labor participation rates, financial reform or higher productivity—may peripherally delay or accelerate the onset of the turning point, but demographics will be the dominant force driving the depletion of surplus labor.
Now, if you’re like me, articles about economics tend to cause my eyes to glaze over. I need to see pictures and stories in order to have any chance of “getting it.”
Enter the Financial Times, who last week published a short documentary titled “The End of the Chinese Miracle,” about the looming “Lewis Turning Point” and how it is impacting not just global economic statistics, but the lives of individual Chinese workers as well. You can watch the entire video here.
Over the past decade, ChinaSource has written much about how urbanization and the movement if migrants from the countryside into the city has impacted the Chinese Church.
This migration spells fundamental change for the rural house church networks that have been the stronghold of Christianity in China for the past three decades.
In the article “The Effects of Urban Migration on the Countryside House Churches in China,” Zhen Mai Wei concludes:
. . . while the rapid migration of people from the countryside to the city has created many complex challenges for the house churches, it has also given rise to changes of thinking and the development of new strategies that ultimately will be positive for the growth of the church in China.
In 2008, we looked again at the issue, with a ChinaSource Quarterly devoted China’s moving population.
In 2014, Brent Fulton wrote a post titled “Urbanization and the Chinese Church.” He explained how life in the cities is affecting the attitudes and outlook of migrants—particularly second generation migrants—and how the church might meet their needs:
The children of China's first-generation migrants, meanwhile, will want a better life in the city than what their parents had. The "rural church in the city," as it is sometimes referred to, will need to adopt forms of worship and modes of ministry that are suited to this new generation. Since many of these second-generation migrants will find themselves frustrated by a lack of educational and employment opportunities, particularly as China's manufacturing sector shrinks, the church will be challenged to bring hope in practical ways to a generation facing a bleak future.
In 2013, we published an interview with an urban migrant pastor. In response to a question about the vision of his church, he responds:
Because the cities where we live are "young cities" which place great emphasis on manufacturing, the migrant population accounts for around 90% of the total population and consists of laborers from every province in China. Population turnover is significant. Nearly every year close to half of the workforce leaves or talks about leaving. Our goal is to share the gospel with the migrant population and to establish a church near the factory or within the community.
As I was watching the video above, I couldn’t help wondering what the implications of the Lewis Turning Point might be for the Chinese church.
Image credit: by LiveFunz, via Flickr.
Joann Pittman is Vice President of Partnership and China Engagement and editor of ZGBriefs. Prior to joining ChinaSource, Joann spent 28 years working in China, as an English teacher, language student, program director, and cross-cultural trainer for organizations and businesses engaged in China. She has also taught Chinese at the University …View Full Bio
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