A Study Of China's Rural Surplus Labor And Its Transfer To Non-agricultural Industries

Industrialization often occurs with the transformation of economic structures and the migration of the agricultural surplus labors to non-agricultural sects. These two issues are very important to the developing countries with a large population like China. To large extent, whether the dual structure can be eliminated and the agricultural surplus labors can migrate harmoniously to non-agricultural industries or not, it leads to two different results of China's industrialization, success or failure.Based on micro-analysis of farm family and agricultural industrialization organization, this paper uses China's economy development stage and its factor endowments as the macro-background of the research, it also uses the upgrading of industry structure as its main route, it focuses on the following issues with a long run, dynamic, non-equilibrium analysis and combination of theoretical and positive analysis as the research methodology:(1) Definition, characters and existing form of agricultural surplus labor force;(2) Relationship between industrial structure transformation and migration of agricultural surplus labor forces;(3) Institutional creation in agriculture and supply and demand of agricultural surplus labor force;(4) Development of labor-intense industries, application of labor-intense technology in manufacturing, and agricultural surplus labors' migration;(5) Urbanization, development of service industries, and agricultural surplus labors' migrationAt the transitional stage from traditional agriculture to modern agriculture, agriculture surplus labor force consists of two parts, absolute surplus and relative surplus, which mainly exist in a form of relative surplus arising from income differences between industries. The essence of relative surplus is structural surplus. A perfect pattern for agricultural surplus labors' migration is like this: the cost of migration is zero, the demands for agricultural surplus labor forces from non-agricultural industries is exactly equal to its supplies and its stocks. Hence, the issue concerning agricultural surplus labor forces' migration is essentially not about its speed or scale but about the problem as how to make stock of agricultural surplus labor forces to be completely absorbed in the condition of zero migrating cost. Correspondingly, there must be a proper proportion between the three industries and their inner sects. A harmonious migration of the agricultural surplus labor forces relies on a harmonious industrial structure.Presently, Chinese industrial structure still needs to be adjusted, though it has been becoming more and more reasonable from 1978. The problems in Chinese industrial structure are the backwardness of agriculture, the tendency of heavy industrialization and the underdevelopment of service industry, which goes not only against economy development but also against industrialization and agricultural surplus labor force's migration.The issue of agricultural surplus labor forces and the problem of agriculture, countryside and farmers are associated closely and they are two sides of one thing. The most serious aspect of the problem of agriculture, countryside and farmers is the slow increase of the farmer's income, which has its origin in agriculture's backwardness. Presently, the fundamental cause of the backwardness of agriculture is that the agriculture institution with a single farmer family as its basic operational unit cannot meet the requirements of market economy. Agriculture industrialization taking place in the past years is kind of institutional changes. The mechanism that agriculture industrialization facilitates agricultural surplus labor forces' migration is that agriculture industrialization speeds up labor-intense technology progress, optimizes industries structure and directly increases employment, at the same time it increases farmer's income, optimizes the speed and scale of agricultural surplus labor forces' migration. The increase of the farmer's income will have a radical impact on the agricultural surplus labor forces' migration.In a fixed investment scale, the labor-intense manufacturing can absorb more agricultural surplus labor forces with its lower capital-labor ratio. Export-oriented strategy for labor-intense manufacturing development brings China economy and employment growth, along with more and more difficulties, the strategy of labor-intense manufacturing must be changed from export-oriented dominance to domestic-demand dominance one, which will expand domestic demand and boost labor-intense manufacturing mainly by increasing farmer's income.From the point of the law of industrialization procedures, there is no reason to doubt that service industry can boost employment and absorb agricultural surplus labor forces in a long term. In the process of industrialization, service industry's development can directly and indirectly absorb agricultural surplus labor forces by facilitating agriculture and industry development. Industrialization is fundamentally the impetus of the development of service industry. Industrialization provides the development of service industry with supply and demand. At the same time, industry policies and urbanization are also the important factors, which affect the development of service industry. At a particular stage of industrialization, at which the income per person, the level of diversification and specialization, the supply factors of development of service industry are fixed, the different levels of urbanization and different industry policies make a difference in the level of service industry development and the capability of service industry employment. Thus service industry development must be regarded as a strategic route to absorb agricultural surplus labor forces; the level of urbanization must be increased to impulse service development integrally; service structure must be optimized to promote its development harmoniously.In short, harmonious migration of agricultural surplus labor forces depends not only on the harmonious three industries' structure but also on their harmonious inner structures.