Shifting labor, rising incomes spur demand

Rising incomes and the backflow of labor to inland areas of China such as Sichuan and Hubei provinces will help boost consumption in the region, a recent Bank of Communications wealth and prosperity index report shows.

Since the latter half of 2011, the study highlighted that well-off households in the western part of China, for example, are more satisfied with their rate of income growth, helped in part by better welfare in the region.

The transfer of industries to regions has meant a surge in labor to some previously struggling areas, helping expand consumption demand.

As industries previously based in coastal areas move inward, some workers are choosing to move back with them, and are living independently, the report said. In these cases, consumption demand, which has been long suppressed, will be boosted.

Those who have moved from more developed coastal regions to inland areas are accelerating change, propelling consumption, but in a sustained way, the report said.

The prosperity index of western and southern parts of China in March was the highest recorded in the country.