China’s National Bureau of Statistics reported that 51% of 1.35 billion mainland Chinese lived in towns and cities at the end of 2011, surpassing the number of rural residents for the first time and signifying labor supply strain that could repaint the global manufacturing landscape, Reuters reported. “It’s a clear signal to all investors – China’s cheap labor is fading into the past and will never be back. As far as I know, many plants here are relocating to places like Vietnam and Cambodia – simply for cheap labor.” said Cheng Jiansan of the Guangdong Academy of Social Sciences. In 2011, rural population in China dropped to 14.6 million. An ageing population, with nearly 123 million over 65, further reduces the country’s labor pool. “It’s a milestone in China’s urbanization, but it’s too early to say that China’s labor supply is drying up. Labor supply will continue to be abundant, but workers will be more demanding in terms of salaries and other benefits ” said Su Hainan, deputy head of the China Association for Labour Studies. Per capita urban disposable income rose 14% year-on-year to US$3,500 in 2011 while per capita rural income increased 18% to US$1,105.