China can help boost Middle East jobs, says expert

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China’s aging population can help to create jobs in the Middle East, according to a China and Middle East expert.

Ben Simpfendorfer, a Hong Kong-based adviser to the China Energy Fund Committee and managing director of consultancy Silk Road Associates, says the Middle East can fill the void created by China’s ageing population.

Writing in Hong Kong’s South China Morning Post newspaper, Simpfendorfer says the Middle East’s dependency on Chinese products has resulted in factory closures in their own back yard while China has managed to capture jobs from other emerging markets.

He writes: “Far less attention is paid to the fact that youth demographic trends in both China and the Middle East are moving in opposite directions, yet it is this that could have a larger bearing on the Middle East’s outlook. At stake is whether the region’s governments, especially those newly installed, can generate enough jobs to absorb a burgeoning youth population.

“The average Chinese is surprisingly old at 35, whereas the median age in the Middle East is just 25. Indeed, China and Egypt are two countries at a similar level of development, with a gross domestic product per capita of US$8,400 and US$6,500 on a purchasing power parity basis, respectively. Yet, the average Egyptian is just 24 years old, or 11 years younger than his Chinese counterpart.

“For China, the result is a massive shortage of youth labour. The youth demographic, aged between 15 and 30, is expected to decline by 44 million between 2010 and 2020, according to United Nations projections. Some major export producers, such as Guangdong province, are falling short of workers as a result of the demographic shift.”

Because of the labour shortage, Chinese factory owners are thinking about relocating operations to lower-cost countries. Simpfendorfer says China should consider the Middle East as a possible destination.

“If some of those factories relocated towards parts of the Middle East, it would go a long way to creating jobs and reducing social unrest,” he wrote. “Indeed, the youth population of Egypt, Libya, Syria, Tunisia and Yemen is forecast to grow by 3.3 million in total by 2020. This means these countries will have to generate jobs just to keep unemployment from worsening.”

While it is to China’s advantage to keep factories at home, Simpfendorfer says only a marginal change is needed.

“If Egypt captures just 0.5 per cent of China’s annual exports to Europe each year, it would add one percentage point to Egypt’s GDP growth.”

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Reading Time: 2 minutes

China’s aging population can help to create jobs in the Middle East, according to a China and Middle East expert.

Reading Time: 2 minutes

China’s aging population can help to create jobs in the Middle East, according to a China and Middle East expert.

Ben Simpfendorfer, a Hong Kong-based adviser to the China Energy Fund Committee and managing director of consultancy Silk Road Associates, says the Middle East can fill the void created by China’s ageing population.

Writing in Hong Kong’s South China Morning Post newspaper, Simpfendorfer says the Middle East’s dependency on Chinese products has resulted in factory closures in their own back yard while China has managed to capture jobs from other emerging markets.

He writes: “Far less attention is paid to the fact that youth demographic trends in both China and the Middle East are moving in opposite directions, yet it is this that could have a larger bearing on the Middle East’s outlook. At stake is whether the region’s governments, especially those newly installed, can generate enough jobs to absorb a burgeoning youth population.

“The average Chinese is surprisingly old at 35, whereas the median age in the Middle East is just 25. Indeed, China and Egypt are two countries at a similar level of development, with a gross domestic product per capita of US$8,400 and US$6,500 on a purchasing power parity basis, respectively. Yet, the average Egyptian is just 24 years old, or 11 years younger than his Chinese counterpart.

“For China, the result is a massive shortage of youth labour. The youth demographic, aged between 15 and 30, is expected to decline by 44 million between 2010 and 2020, according to United Nations projections. Some major export producers, such as Guangdong province, are falling short of workers as a result of the demographic shift.”

Because of the labour shortage, Chinese factory owners are thinking about relocating operations to lower-cost countries. Simpfendorfer says China should consider the Middle East as a possible destination.

“If some of those factories relocated towards parts of the Middle East, it would go a long way to creating jobs and reducing social unrest,” he wrote. “Indeed, the youth population of Egypt, Libya, Syria, Tunisia and Yemen is forecast to grow by 3.3 million in total by 2020. This means these countries will have to generate jobs just to keep unemployment from worsening.”

While it is to China’s advantage to keep factories at home, Simpfendorfer says only a marginal change is needed.

“If Egypt captures just 0.5 per cent of China’s annual exports to Europe each year, it would add one percentage point to Egypt’s GDP growth.”

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