From Demographic Dividend to Industrial Transformation: A Forty-Year Review of Low-Cost Labor and the Development of China’s Electronics Assembly Industry

Abstract

China’s electronics assembly industry is a pillar industry that enabled China to undertake international industrial relocation and integrate into global value chains. In the early days, it relied on abundant and cheap labor to form a global contract manufacturing advantage. With the arrival of the Lewis turning point, the increasing aging of the population and the improvement of the awareness of the rights and interests of migrant workers, the traditional low-cost employment model has encountered structural challenges, and industrial transformation is imminent. This article integrates the theories of population, labor and industrial economics, sorts out the 40-year development process of the industry, analyzes the underlying mechanism through which demographic dividends transform into development constraints, and evaluates the effectiveness and limitations of the three transformation paths of industrial transfer, automation upgrading and value chain upgrading. The study found that China's electronics assembly industry has crossed the Lewis first turning point, and the working-age population has continued to shrink and the total dependency ratio has increased; Industrial transformation shows the characteristics of multi-path parallel, and the proportion of industries in the central and western regions and the installed capacity and density of industrial robots have been greatly increased. The existing classical theory is difficult to adapt to China’s household registration, land and other institutional environments, and also ignores migrant workers’ agency as behavioral actors. For this reason, this paper builds an integrated analysis framework to explain the stage characteristics and constraints of the industry's transformation from labor dependence to technology-driven. The research has made up for the shortcomings of the localization and application of Western theories, deepened the relevant understanding of demographic dividend changes and the transformation of the manufacturing industry, and also provided a realistic reference for the formulation of domestic industrial policies and the adjustment of enterprise development strategies.