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Comments by Xuejin Zuo

Comments Comments Xuejin Zuo: The paper argues that China’s demographic transition and its passing through the “Lewis turning point” imply major changes in the country’s comparative advantage. As China—both the country as a whole and the coastal region in particular—is gradually losing its comparative advantage in labor-intensive manufacturing, it is facing the risk of falling into the middle-income trap. The paper also makes some policy suggestions to avoid this trap. Although I agree with the author’s major arguments and the policy suggestions, I would like to make the following comments. The paper marshals data to show that the wages of unskilled workers (primarily the migrant workers) have experienced rapid growth since 2003. Of course, this trend can be attributed to the slower growth in the labor supply. However, in addition to the impact of demographic changes, there might be other changes affecting wages of the unskilled workers as well—for instance, the rocketing price of urban housing and the upward leaps in the cost of living. The consumer price index published by the National Bureau of Statistics is based, to a large extent, on surveys of registered urban households, and this may seriously understate the increase in the cost http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian Economic Papers MIT Press

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