Automatic for the people

Robots are more solution than problem for China

Robots are more of a solution than a problem for China. That may sound odd when factory jobs have lifted many millions from poverty, and given Chinese leaders are obsessed with social stability. But, a huge push to upgrade via automation still makes sense. The workshop of the world is inefficient and low-tech, and the workforce is already shrinking.

This week's $5 billion bid by Midea, the white-goods giant, for German robotics specialist Kuka reflects China's eagerness for automation. President Xi Jinping's "Made in 2025" plan aims to make China into a technological powerhouse within a decade.

That makes sense - even if Midea's bid for Kuka is a bit mystifying. At present, China has just 36 robots per 10,000 manufacturing workers, compared with 314 in Japan, the International Federation of Robotics says. And factories are already struggling to fill jobs. In Dongguan, a southern manufacturing centre near Shenzhen, local industry is short of 200,000 workers despite the minimum wage doubling between 2010 and 2015, Chinese media have reported.
 

There are two problems. One is simple demographics. China's working age population fell from 941 million in 2011 to 911 million last year, official figures show. The World Bank says it could drop another 10 per cent by 2040. The second is that people who have migrated across China are better educated than their predecessors and don't want grim production-line jobs, even if wages have risen sharply.

Manufacturing needs even more basic upgrades, however. China's factories have won market share by selling cheap but often substandard goods. Improving logistics, waste management and quality control would boost productivity too.

Eventually, as across the world, automation could pose a huge challenge: up to 77 per cent of China's jobs could be at risk, according to a study by Citi and Oxford University. But, China's technology upgrade will take a long time, and for now at least, robots are a useful tool.