BOAO, Hainan, April 23 (Xinhua) -- Cheap labor, regarded a major contributing factor behind the competitive edge of Chinese companies, may possibly diminish in the coming decade, according to Li Jiange, deputy director of the Development and Research Center of the State Council.

   Labor costs usually rise fast in certain industries and certain areas after the China's per capita GDP (gross domestic product) exceeds the 1,000-US dollar level in 2003, Li said at the 2005 annual conference of the Boao Forum for Asia.

   The fast growth in land price in the booming coasts of China would also drive up the overall cost for Chinese products, he said.

   As the global market for the labor-intensive products, such as textiles and consumer electronics, is saturated, the potential for Chinese companies to further expand their market share with their cheap labor costs was getting smaller, Li said.

   Other challenges on China's way to modernization include the bigger labor supply than demand due to its huge population, deteriorating environment, the aging population and the gap between rural and urban areas.

   Li also pointed to the biggest favorable element for China's development: the support from the public. The majority of Chinese have seen their life obviously improved in the past two decades. They support the government policy for reform and opening to the outside world and have a strong desire for maintaining political and social stability in the country.  Enditem