An increasing number of Chinese factories are ditching human workers for machines as a robotic revolution gets underway in the world’s second-largest economy.
In the past month, two companies in the southern province of Guangdong, a major manufacturing hub, have reported plans to fill their factory floors with robots.
Evenwin Precision Technology is building a factory that will boast more than 1,000 industrial robots, China Daily reported in May. A maker of mobile phone components, Evenwin told the newspaper the move would reduce the number of frontline workers by at least 90 percent.
Meanwhile, home appliance maker Midea recently replaced 14 workers on one of its major assembly line, according to a Caixin report last month. Soon, it plans to replace quality-control supervisors with robots too.
China is already the world’s largest industrial robot market – the country also manufactures the robots it uses – and it’s expected to boast more industrial robots by 2017 than both Europe and North America combined, the International Federation of Robotics said earlier this year.
A trio of factors is behind the recent industrial upgrade, according to a recent report by HSBC: “It’s a potent mix – an ageing workforce, rising wages and the all-important support of China’s leader, Xi Jinping. This combination makes it easy to be positive about the automation industry in China.”
Factors at play
China’s populating is ageing rapidly, resulting in a shrinking labor force. That requires Beijing to move from its labor-intensive growth economy to robot-led advanced manufacturing, HSBC explained.
People aged between 16 and 60 – the definition of working age – declined by 3.7 million last year, the government announced in January. The number people reaching 65 will grow 4 percent in China over the next decade, compared to 3.3 percent worldwide, the United Nations forecasts.
But are robots more efficient than humans? According to many researchers, yes. A paper by Uppsala University and the London School of Economics in February revealed that industrial robots do increase labor productivity and raise a country’s average growth rate by 0.37 percentage points.
Robots are also a cheaper alternative, HSBC pointed out: “The shortened payback cycle makes the investment in robots more economically viable due to rising labor costs.”