Factories in China are replacing humans with robots in a new automation-driven industrial revolution. The effects of this drive in China as well as around the globe will be huge. Since 2013, China has bought more industrial robots each year than any other country, including high-tech manufacturing giants such as Germany, Japan, and South Korea.
Countless manufacturers in China are planning to transform their production processes using robots and are opting for automation of their factory assembly lines at an unprecedented scale. And what’s great, this drive is being fully supported by the Government!
There was a time when China boasted the cheapest human labor. It is not the same anymore especially in comparison with rival manufacturing hubs such as Thailand, Indonesia, and Vietnam. The growing labor cost in China will not prove good for the country’s economy in the coming years. Since competition is fierce, China may not have any other choice but to quickly automate its industries. Many manufacturers and government officials believe the solution is to replace humans with machines. The revolution has already begun.
Since China manufactures almost a quarter of the world’s products, the results of this revolution in China’s industries will be felt globally. The need of the hour is to automate manufacturing processes that have never before been dealt by machines. This will turn the country into a hub of high-tech innovation. The world’s largest human labor market can be turned into the world’s largest robots and machine run economy. The concern, however, is the future of millions of workers who are currently working in China’s factories.
Many companies are quickly automating their production lines. In order to stay in business, this is the demand of the future. Although many companies have laid off even up to 80% of their human workforce for machines to take over, many processes are still being done by hand and fully automated industries are still not a reality.
In China, it is now very clear that manufacturers will either go into automation or will go out of business. There is no other way to keep up with the rapidly increasingly demands of manufacturing and increasing labor costs.
China’s Economy and Manufacturing
China’s focus on automation and the shift towards employing more and more industrial robots replacing human workers has its roots in a pressing economic problem.
China’s economic miracle is directly attributed to its manufacturing industry. According to the Bureau of Labor Statistics, approximately 100 million people are employed in manufacturing in China and the sector accounts for almost 36 percent of China’s gross domestic product.
During the last few decades, manufacturing empires were forged in China. Since the Government opened its doors to global trade in the 1980s onwards, the availability of cheap manpower made China the world’s biggest exporter of manufactured goods. Hundreds of millions of Chinese were taken out of the shackles of extreme poverty. Millions of low-skilled workers migrated from rural areas to cities and found employment in gigantic factories, producing an unimaginable range of products, from a sewing needle to servers. China accounted for just 3 percent of global manufacturing output in 1990. Today it produces almost a quarter.
The manufacturing boom in China has benefitted consumers all around the world. Mass production has resulted in cheap technology and gadgets which are affordable for all. The massive employment opportunities in the country created a huge middle-class population. These middle-class workers started demanding higher wages than before. Thus, labor is gradually becoming expensive and is not as cheap as it once was.
Also, due to the country’s one-child policy, which is slowly being phased out now, not enough working-age population is available to work in factories as before and this population is slowly decreasing with every decade. All these factors combined have led to higher wages than before thus eroding China’s competitive advantage – cheap labor.
Therefore, if labor and manufacturing costs are not kept in check, this booming economy can fall. And its effects will be felt all around the globe. The only viable solution right now seems to be automation of Chinese industries. China already imports a huge number of industrial robots, but the country lags far behind competitors.
The Chinese government is keen to change this. The latest Five Year Plan includes subsidizing and financing automation of the country’s manufacturing units. Use of industrial robots is being promoted throughout the country and advanced manufacturing technologies will be showcased all around the country to promote this drive.
The main aim of the whole automation drive and the massive shift towards using industrial robots instead of human workers is to overtake Germany, Japan, and the United States in terms of manufacturing sophistication by 2049 which will see centenary celebrations of the founding of the People’s Republic of China. In order to achieve this goal, manufacturers are being encouraged to shift rapidly to automated assembly lines and employ industrial robots by the millions. Another goal is to start manufacturing industrial-use robots.
All these aspirations sound great but the actual task requires enormous efforts. It cannot be done overnight. One such example is the struggles faced by Foxconn. Also known as Hon Hai Precision Industry Co. Ltd., Foxconn is a Taiwanese multinational electronics contract manufacturing giant and the world’s third-largest information technology company by revenue. Foxconn’s clients include major American, Canadian, Finnish, and Japanese electronics and information technology companies. The products manufactured by the company include BlackBerry, iPad, iPhone, iPod, Kindle, Nintendo 3DS, Nokia, PlayStation 3, PlayStation 4, Wii U, and Xbox One.
This company has employed hundreds of thousands of workers in city-size factories. The scale of production is mind blowing. In 2011, Foxconn’s founder and CEO, Terry Gou, said he expected to have a million robots in his company’s plants by 2014. Three years later, the effort had proved more challenging than expected, and just a few tens of thousands of robots had been deployed.
This is just one example. Like Foxconn, challenges are being faced by many other companies in China which are shifting from the human workforce to industrial robots. This is happening because complex programming is required for even the minutest of tasks and state-of-the-art robots that can perform any task with absolute precision are still in the stage of testing and development.
Another looming fear is the repercussion of this shift to automation and robots. The Chinese society might greatly be disturbed. Where would the currently employed 100 million workers go and what would they do once they are no longer required in the fully automated, robots-run factories of the future? This is a question many cannot answer satisfactorily. The scenario seems bleak. Such a shift would bring great economic hardship to the workers and their families which could eventually turn into widespread social unrest.
Given the economic imperative, the government’s determination, and the country’s growing technological sophistication, it seems very likely that manufacturing companies across China will automate successfully and that the country will become a leader in the technology of advanced automation.
Without a shred of doubt, the use of industrial robots and automation of the manufacturing industry is the way forward if manufacturing and the economy have to be saved in China. But due consideration needs to be given to the huge Chinese labor force. What is going to be their future is yet to unfold.