China’s industrial sector continues to evolve, as the country’s producers move higher in global value chains, reflecting a range of factors including capital deepening and rising labour costs. While this can broadly be seen as a positive development, with aggregate measures of wealth and living standards having risen, this evolution also creates some risk for lower skilled workers, who could find substantially reduced demand for their labour. How China addresses the needs of this cohort could have an impact on its economy and social cohesion in coming years.

For further details, please see the NAB China Economic Update April 2021