Resea ch Pape
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DOI: 10.5281/zenodo.17679500
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In oduc ion:
China's indus ial policy, which s a ed wi h he e o m and opening
up in 1978 and has since become a majo global expo e , depends
on wo ke coope a ion and esou ce alloca ion o suppo long- e m
g ow h.
To e alua e China's indus ies, we mus i s look a i s esou ce
in as uc u e. Hones ly, in he ea ly days o China's e o m and
opening-up, esou ces and acili ies we e sca ce, and in as uc u e
was incomple e, especially ega ding elec ici y and o he essen ials.
This limi ed ea ly indus ial g ow h, which mainly ocused on ligh
indus ies, pa icula ly in he 1970s and ea ly 1980s. Ligh indus ies
like ga men s, ex iles, oys, and o he labo -in ensi e sec o s
employed China's u al labo o ce. Wi h Hong Kong ac ing as an
in e media y, i b ough in capi al and echnology, enabling Chinese
wo ke s o imp o e hei p oduc i i y since Wo ld Wa II.
By he 1980s, Hong Kong aced challenges om he ade wa , wi h
s ic quo as placed on ga men and ex ile p oduc ion, which
g adually led o he eloca ion o indus y o Guangzhou and
Shenzhen. Since hen, China's labo o ce, bene i ing om a o able
iming, loca ion, and people, along wi h policy suppo , has been
able o unlock i s inhe en explosi e po en ial, ul ima ely
es ablishing i sel as a global leade in con ac manu ac u ing.
China's labo policy is p ima ily p agma ic, ailo ed, and bene i s o
speci ic ci cums ances. This special app oach, cus omized o each
s a e and ci y and le e aging esou ces, has c ea ed a unique ma ke
economy wi hin he socialis sys em.
China's labo policy is closely linked o i s key indus ies. These
indus ies a e shaped by a ailable esou ces and in as uc u e. The
s ages o labo de elopmen p ima ily align wi h he s ages o
indus ial g ow h. F om he 1970s o he 1990s, ligh indus y such
as oys, clo hing, and ex iles domina ed. These sec o s ea u ed low
en y ba ie s and we e labo -in ensi e. Be ween he 2000s and
2010s, he ocus shi ed o medium-sized indus ies, including
A Commen a y on Mode n Chinese Indus ial Labo Policies
Lie Chun Pong
Sch: HKUST
Co esponding Au ho : Lie Chun Pong
Sch: HKUST
Since he e o m and opening-up policy, China's indus ial sec o has expe ienced apid g ow h, wi h i s en epo and
expo ade anking among he wo ld's op, unma ched globally. Fu he mo e, since joining he Wo ld T ade O ganiza ion
( o me ly he Gene al Ag eemen on Ta i s and T ade) in 2000, China has quickly become he wo ld's manu ac u ing hub,
making signi ican con ibu ions o he global indus ial supply chain. In his esea ch pape , we aim o analyze China's
labo ma ke de elopmen and p opose a new app oach— he dual-sec o au oma ic labo s abilize app oach— o enhance
labo esilience ha migh be sui able in he nea u u e.
KEY WORDS: manu ac u ing hub, ansi ion phase, dual-sec o app oach, au oma ic s abilize
Abb e ia ed Key Ti le: UAI J Econ Bus Manag.
ISSN: 3049-2777 (Online)
Jou nal Homepage: h ps://uaipublishe .com/
Volume- 1 Issue- 5 (Sep embe -Oc obe ) 2025
F equency: Bimon hly
Resea ch Pape
This wo k is licensed unde a C ea i e Commons A ibu ion-NonComme cial 4.0 In e na ional License.
DOI: 10.5281/zenodo.17679500
Page 44
au omobile manu ac u ing, home appliances, and mobile phone
equipmen . These indus ies we e cha ac e ized by high en y
ba ie s, being mos ly capi al-in ensi e and semi-au oma ed, wi h
high echnical demands on wo ke s and lowe labo in ensi y.
Since 2010, China's indus ial s uc u e has ansi ioned om ligh
and medium indus ies o hea y indus y, such as shipbuilding and
ae ospace echnology, which en ail high capi al and echnical
ba ie s and equi e specialized labo . These h ee s ages o
indus ial de elopmen ha e helped China mode nize and ascend o
he anks o powe ul na ions.
Me hodology:
This pape is based on an ex ensi e sys ema ic e iew o igo ously
pee - e iewed scien i ic s udies sou ced om es eemed da abases
such as Google Schola and Resea chGa e. The ocus is on
analyzing a ious ypes o esea ch, including case s udies and me a-
analyses, all published wi hin he ime ame om 2003 and 2022
[1][2]. The in es iga ion cen e s on se e al c i ical a iables,
including le els o labo o ce de elopmen , he incidence a es o
unemploymen , and a ho ough examina ion o po en ial
con ounding a iables such as GDP g ow h and socioeconomic
de e minan s. The aim o he abo e da a [1][2], is o suppo ou
pape 's sugges ion o a dual-sec o app oach, o ac as an Au oma ic
S abilize .
Con en :
A planned economy ocused on he a med indus y
Compa ed o he So ie Union's pos -Leninis planned economy,
China's planned economy is mo e lexible, especially in i s emphasis
on aligning wi h he ma ke economy and elying mainly on expo s
o ea n o eign cu ency. The So ie -s yle planned economy, in
con as , was p ima ily sel -su icien and ocused on mee ing i s
own needs. I s indus ial de elopmen was no mainly expo -
o ien ed bu hea ily concen a ed on he a med indus y, ueling an
a ms ace agains he Uni ed S a es. This limi ed i s indus ial
g ow h o a speci ic s age.
As a esul , i lacked he abili y o sus ain meaning ul de elopmen
and was unable o es ablish a comple e indus ial chain. Al hough
he p ojec was success ul, i could no be main ained. Due o he
a ms ace-s yle planned economy, he eme ging indus ies had
inhe en laws, and he ma ke connec ions be ween indus ies we e
weak, which nea ly caused his indus y o be a d ag. Since hen,
Ge many has lea ned om he economic lessons o simila coun ies
and ac i ely adop ed a ma ke economy a e he So ie Union.
Since he 1990s, i has c ea ed he Eu opean Union Mone a y A ea,
expanded in a- egional ade, joined he Eu opean Union, and
ac i ely de eloped indus y wi h China. Fo example, in he 2000s,
well-known ca manu ac u e s like BMW B illiance ac i ely o med
join en u es wi h China and apped in o he G ea e China ma ke .
In he la e 2010s, China also ac i ely es ablished join en u es o
p oduce hea y indus y. A e impo ing Ge man echnology,
China's indus ial de elopmen accele a ed apidly, allowing
Ge many o success ully en e he G ea e China ma ke and sha e in
i s g ow h while China's economy expanded signi ican ly.
O cou se, Ge many's smalle popula ion and limi ed ma ke size
hinde i s sus ainable de elopmen compa ed o China's eage ness o
adop ad anced Wes e n echnology and i s la ge domes ic ma ke .
Tha said, China's indus ial g ow h is also limi ed by i s own
policies and ou da ed managemen p ac ices, which es ic i s
de elopmen and keep i s labo o ce g ow h on a sho - e m basis.
Dual Sec o App oach Pu pose Insigh
In his pape , we p opose ha , China's labo o ce can be shaped by
he cha ac e is ics o a dual economy, p ima ily di ided in o u al
and u ban labo ma ke s. Fo ins ance, du ing pe iods o explosi e
economic g ow h and labo sho ages, i is na u al o elease u al
wo ke s o ill ma ke acancies.
We p opose ha he co e o he dual economy au oma ic s abilize
lies in u al and u ban a eas. We p oposed ha he mode n dual
economy wi h Chinese cha ac e is ics can be ounded on u al
u baniza ion and u ban mode niza ion, which Subs i u e o each
o he as a supplemen . Besides he indus ial sec o , i s labo o ce is
also di ided and de elops hie a chically.
So, ega dless o he economic o indus ial model, i emains
closely ied o ma ke iza ion and ade o ien a ion, and his emains
consis en h ough all changes. The labo -based s uc u e change is
an ine i able esul o he ans o ma ion and upg ading phase. A
de ining ea u e o China's social economy is i s lexibili y, which in
u n demons a es he economy's i ali y.
Ou dual abso be mechanism unc ions as an endogenous
s abilizing agen wi hin egional labo ma ke s. By se ing as an
au oma ic s abilize , his app oach acili a es he dynamic
edis ibu ion o labo allowing u al egions o abso b excess labo
supply o igina ing om me opoli an cen e s.
Con e sely, i enables hese u ban a eas o alle ia e labo sho ages
du ing pe iods o economic apid g ow h. This bi-di ec ional labo
low can mi iga e cyclical unemploymen and labo ma ke
ola ili y. Mo eo e , his adap i e mechanism can con ibu e o
social s abili y by alle ia ing social un es linked o unemploymen
and egional dispa i ies. Ul ima ely, his dual app oach enhances
mac oeconomic esilience, p omo es balanced egional
de elopmen , and add esses s uc u al unemploymen h ough
e icien esou ce alloca ion and labo ma ke lexibili y.
As wage cos s inc ease, labo will ine i ably de elop in mul iple
ways, including specializa ion and di ision o labo , o en
mani es ing in p o essional eams. The high deg ee o di ision o
labo du ing indus ializa ion will na u ally lead o mo e lexible
wo k a angemen s, which can also d i e o he o ms o indus ial
de elopmen .
Au oma ic S abilize (In Dual app oach):
We sugges ed he Au oma ic S abilize dual app oach o u ilizing
u aliza ion and u baniza ion as a ounda ion o i s lexibili y
(Labou ), wi h his adap abili y se ing as a bu e o he labo
o ce. In addi ion, we highligh ha es ablishing his bu e can help
o es o e economic g ow h, pa icula ly by managing su plus labo .
The labo o ce is ep esen ed and ex ended, while he economy
b eaks h ough his ba ie h ough a dual-sec o app oach. This
elas ici y o labo c ea es a apid "bu e - ype economic indus y."
This bu e also makes China's labo o ce mo e lexible, allowing
i s po en ial o be quickly unleashed, hus gene a ing a demog aphic
labo di idend. This demog aphic di idend can os e he eme gence
o new en e p ises and indus ies. Also, when he e is an economic
shock ( ecession), he u al illage can abso b he laid-o labou in
he ci ies.
Ou swi mode de elopmen dual app oach o hese u al new
indus ies ac s as a na u al shock abso be o he social economy,
enhancing economic lexibili y and i ali y.
Resea ch Pape
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DOI: 10.5281/zenodo.17679500
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In add essing he abo e ollowing his o ical backg ound, we he e
sugges a comp ehensi e solu ion, in o de o cope wi h he u u e
labo u moil si ua ion.
Imp o emen Sugges ions:
1. P omo e he employmen ne wo k
P omo ing employmen ne wo ks as a s a egic economic ini ia i e
o enhance labo ma ke e iciency, educe unemploymen a es, and
os e inclusi e economic g ow h h ough a ge ed employmen
policies and incen i e mechanisms.
2. Ci cula e labo in o ma ion
Dissemina e comp ehensi e labo ma ke da a and de ailed
employmen s a is ics o all ele an s akeholde s, ensu ing he
accu a e and imely ci cula ion o wo k o ce in o ma ion. This
includes p o iding in-dep h analysis and u ilizing ad anced
economic policy o acili a e in o med decision-making in labo
economics.
3. Reduce labo con e sion cos s
Minimize labo ansac ion cos s o enhance economic e iciency
and s eamline wo k o ce managemen p ocesses. This in ol es
implemen ing s a egies and echnological solu ions aimed a
educing he cos s associa ed wi h hi ing, aining, moni o ing, and
managing employee conduc , he eby p omo ing a mo e op imal
alloca ion o esou ces.
4. Inc ease labo ma ke lexibili y
Enhance ma ke adap abili y h ough s a egic di e si ica ion and
adap i e esponse mechanisms, he eby inc easing o e all labo
ma ke lexibili y. This app oach allows o mo e agile adjus men s
o economic shocks and al e a ions in consume demand, os e ing a
esilien and dynamic economic en i onmen . Employing
sophis ica ed inancial ins umen s and economic policy ools can
u he op imize he lexibili y o he labo ma ke .
5. De elop a dual economy
De elop a dual economy model cha ac e ized by he coexis ence o
a mode n, capi al-in ensi e sec o and a adi ional, labo -in ensi e
sec o wi hin a single na ional economy. This amewo k highligh s
he s uc u al dispa i ies whe e he mode n sec o gene ally exhibi s
highe p oduc i i y, capi al accumula ion, and echnological
sophis ica ion, while he adi ional sec o emains p edominan ly
u al, subsis ence-based, and less in eg a ed in o global ma ke s.
Such a dual economic app oach s uc u e can acili a e s uc u al
ans o ma ion and inclusi e g ow h.
6. Bu e he labo powe sys em
Implemen bu e ing mechanisms wi hin he labo powe sys em o
enhance i s s abili y and esilience. This in ol es c ea ing s a egic
ese es o labo esou ces ha can be mobilized in esponse o
luc ua ing demand, he eby main aining consis en p oduc i i y
le els. The p ocess en ails he de elopmen o labo bu e s ocks,
he in eg a ion o lexible wo k o ce managemen p ac ices, and he
op imiza ion o labo supply chains o adap o economic shocks o
cyclical mo emen s. Employing such bu e s can mi iga e he isks
associa ed wi h labo sho ages o su pluses, ensu ing a mo e obus
and adap able labo ma ke amewo k ha aligns wi h p inciples o
mac oeconomic s abili y and dynamic equilib ium.
7. An ea ly wa ning sys em
Es ablish a comp ehensi e labo o ce an i-shock con ingency
amewo k. This mechanism will se e as a bu e du ing cyclical
economic con ac ions, acili a ing a esilien labo ma ke by
mi iga ing he impac s o economic ola ili y. I will inco po a e a
labo ma ke cyclical ansmission channel o moni o and manage
luc ua ions e ec i ely. Addi ionally, he amewo k will ea u e an
ea ly wa ning sys em based on mac oeconomic indica o s, designed
o signal impending economic down u ns o bounda y b eaches,
he eby enabling p oac i e policy esponses o ensu e economic
s abili y.
Conclusion:
This esea ch pape ocuses on he de elopmen o he labo ma ke
in he mainland wi h he goal o p o iding lexibili y o add ess he
labo o e supply p oblem. This issue can be esol ed h ough a
well-es ablished pla o m and labo ealloca ion, which can
minimize labo ansac ion cos s. We p opose a dual-sec o
mechanism o enable he au oma ic s abilize o abso b he labo
o e supply. Wi h his app oach, we aim o bene i he wo ld and
humani y.
Re e ences:
1. Wu Yaowu, 2022. "China’s Labo Ma ke in Se en
Decades," Ins i u e o Popula ion and Labo Economics,
Chinese Academy o Social Sciences.
2. Ray B ooks and Ran Tao, 2003. "China's Labo Ma ke
Pe o mance and Challenges," IMF Wo king Pape
WP/03/210.
