>As labor costs increase rapidly in recent years，many scholars are concerned about a possible weakening of China’s competitive advantage in international commodity markets.This chapter proposes two-way policy implications：precaution for the future and reaction appropriately.First of all，through the fundamental transformation of growth pattern from inputs-based to productivity-based，Chinese economy can gain its benefit from dynamic comparative advantage and find a new driving force for sustained economic growth.Secondly，by improving environment of employment creation and by abolishing institutional barriers deterring labor mobility，the increasing trend of labor costs can be postponed.Last but not least，by deepening formal education and developing training programs，human capital stock can be enlarged and the possible shock brought about by increase of labor costs can be eased.