Interpretation Of Chinese “Lewis Turning Point” Paradox

In recent years, China’s economy have made tremendous progress both in the "quality" and "quantity", which is ine xtricably linked with the advantage of cheap labor, but with the growth of total economic scale and the change of economic structure and population structure, China’s advantage of cheap labor resources is weakening. The "Boom" of labor in late 20 th century to the "labor shortage" this century and the recent rapid rise in labor wages, caused a great debate about "Lewis Turning Point" in C hina. It is still puzzle whether C hina’s "Lewis turning point" has arrived or not so far. Meanwhile, the discussion of this issue raises another important question which worth exploring: a large labor surplus and labor wages rose rapidly coexist, "Shortage" and "Employment" coexist. This particular economic phenomenon is clearly inconsistent with the traditional theory; it a lso means that there are some challenges in the process of C hina’s dual economy to signal, which will undoubtedly affect the sustainable and healthy development of economy.Firstly, this article compare the theoretical hypotheses with our actual situat ion based on the dual economic theory, Through theoretical analysis and empirical data calculations, we find that changes in China’s industrial and agricultural labor productivity and "Lewis paradox" are consistent with the historical trajectory, which ma y suggest that there is a link between them at least. Further, econometric analyses find that there is a linkage effect between labor productivity, the number of surplus labor, and labor wage. Agricultural labor productivity and the development of industr ial labor productivity after 1990 gradually disorders, which is an important reason for the "Lewis paradox". Another reality that contrary to hypothesis is the rising of labor transfer costs. Labor transfer channels open is the premise of the dual structure of unitary, but by calculation, in recent years, the cost of the transfer of surplus labor migrants is increasing, the cost-benefit ratio of migrant reversal occurs, which directly affects the decision to change the labor force. Therefore, we find that t he increasing the cost of the transfer of surplus labor is another important reason for the "Lewis paradox” from the perspective of cost-benefit.Based on the above two reasons that sustained attention on agricultural and try our best to narrow the gap between industrial and agricultural labor productivity is a priority. In addition, while nurturing agriculture should focus on the issue of labor migration to the city’s costs, reduce the cost of migration to ensure the labor force needed while our countr y is currently still mainly labor- intensive industrial structure, in short, the relationship between "San Nong" and the cost of labor migration must be coordinated.