Illustration: Lu Ting/GT

On February 28, the State Council Information Office (SCIO) held a conference on conditions facing China's migrant workers. According to statistics released at the conference, growth in China's migrant population - also known as the floating population - has been slowing since 2010 and last year even declined by 0.5 percent.

Growth in migrant workers' wages also slowed in 2014. For many years, members of the country's floating population saw their pay increase by double-digit rates. Last year though, the increase was only 9.8 percent, down from 13.9 percent growth in 2013.

The SCIO also stated that in the "new normal" economic era in which we now find ourselves, many migrant workers are choosing to leave cities where they work and return to their hometowns. Some have chosen to start businesses themselves. At present, roughly 2 million former migrants are now running enterprises in their home towns.

"China's migrant workers are facing new changes and new challenges in terms of employment, income, as well as skills," summarized Yang Zhiming, director of State Council Rural Migrant Workers Affairs Steering Group Office, at the conference.

Migrant workers go back home for many reasons. First, in eastern China some industries, especially those in the traditional manufacturing sector, have met with increasing upgrading pressure thanks to rising labor costs and greater energy saving efforts. At the same times, infrastructure conditions have improved substantially in inland China, leading some traditional industries - and their workers - to move westward into regions that have long been sources of migrants.

Second, in 2014 growth slowed to multi-year lows in many areas of China's economy, particularly in the manufacturing sector.

According to statistics released by General Administration of Customs, Chinese trade saw a 3.4 percent rise in 2014, falling well short of the 7.5 percent goal set at the beginning of last year. Recently, some large companies have shut their bases in certain areas in China. For example, Nokia has shut two of its manufacturing plants in Dongguan and Beijing. As a consequence, workers on the assembly line lost their jobs and have had to seek opportunities elsewhere.

What impact will this phenomenon have on China's economic and social landscape?

China's largest cities once had abundant labor resources thanks to migrant workers. This might change in the future.

According to data from the National Bureau of Statistics, China's working-age population started to dwindle in 2012, and has continued to shrink every year since. The country's floating population can no longer be considered an endless pool of cheap labor. On the other hand, a decline in labor availability has also prompted many Chinese industrial enterprises to upgrade and strengthen themselves technologically. In 2014, China's advanced manufacturing industry grew rapidly; this was caused, at least partly, by difficulties finding workers.

But despite the trends which are now afoot, we should not make sweeping generalizations and say that all Chinese migrant workers are leaving big cities. Many first-tier cities such as Beijing and Guangzhou still have ample labor resources. The biggest shifts are happening in small- and mid-sized cities, which many migrants are now leaving in favor of inland localities such as Hunan and Jiangxi provinces. This trend will likely accelerate urbanization in central and western China. According to the National New Mode of Urbanization Plan (2014-2020) issued by the State Council in March 2014, up to 100 million migrant workers are expected to settle down and become urban residents in Central and Western China by 2020.

Over the immediate future, the question is: how are migrants able to provide for themselves in a new environment? With the skills and the money they have amassed in larger cities, a great number are able to buy homes and settle down in their native places. More importantly, their offspring will get better educations at local schools in many cases due to policy factors and heavy competition in urban schools.

Finally, what can be done to help migrant workers find jobs? The SCIO stated that in 2014 the Chinese government started a program aiming at promoting migrant workers' skills and 20 million individuals have already benefited from the program.

Many local governments have also introduced favorable policies for immigrant workers. As long as such advantages don't disrupt the existing market balance, they would be of great help to migrant looking to jobs.

The article was compiled by Global Times reporter Xie Jun,  based on an interview with Shi Yulong, a research fellow of Academy of Macroeconomic Research under the National Development and Reform Commission. bizopinin@globaltimes.com.cn