Will China's demographic time bomb end the low-inflation age?

Rising wages at 'world's factory' threaten widespread disruptions

Employees manufacture camera lenses for cellphones at a factory in Lianyungang, Jiangsu Province. As a key contributor to global supply chains, what happens in China could impact wide swaths of the global economy. © Reuters

HIROYUKI NISHIMURA, Nikkei senior staff writer

June 14, 2021 13:05 JST

TOKYO -- As China faces a growing labor shortage and a rapidly aging population, concern is growing that rising wages in "the world's factory" could push up price levels globally and put an end to years of low inflation.

China's Communist Party unexpectedly announced late last month that it would allow married couples to have up to three children. As the population ages, the labor force will decrease and burden of nursing care will increase, Ning Jizhe, head of the National Bureau of Statistics, had explained at the time.