More people lived in China's cities than in the countryside last year for the first time in history, a milestone that also points to labor supply strains in the world's No. 2 economy that could redraw the global manufacturing landscape.
Just over 51 percent of the 1.35 billion mainland Chinese lived in towns and cities at the end of 2011, China's National Bureau of Statistics said on Tuesday, crossing the halfway mark after three decades of rapid growth in the world's most populous nation.
Factories along the Pearl River Delta boomed in the same period as hundreds of millions headed to cities in search of jobs, helping to keep costs low. But an expert on development in the delta said workers are now increasingly
demanding higher wages and better terms as urban property and living costs soar.
"It's a clear signal to all investors — China's cheap labor is fading into the past and will never be back," said Cheng Jiansan, a professor with the Guangdong Academy of Social Sciences, the top think-tank in China's export hub.
"As far as I know, many plants here are relocating to places like Vietnam and Cambodia —simply for cheap labour."
China became the factory to the world since economic liberalization began in the early 1980s, exporting goods such as high-end running shoes and television sets as low-cost labor spurred manufacturers around the globe to setup operations mainly in special economic zones along the southern coast.