Chinese factories face shortage of workers because of the ageing population and most of the jobs created in the service sector are not efficient to generate enough income.

Chinese factories are currently struggling to find workers, commentators argue this is due the ageing population and a rapid growth of jobs in the service sector to provide services to the expanding middle class. Suppose this argument is true. We should see an increase of proportion of consumption out of GDP. However, this is not true, the household final consumption expenditure is falling from 2011, in terms of % of GDP. If we ignore the possible measurement error, we can conclude that the ageing population is the most crucial reason that causes the shortage of labour in the manufacturing sector, and most jobs created in the service sector are not efficient to produce more incomes.