SHENZHEN: In China’s factories, the robots are rising.

For decades, manufacturers employed waves of young migrant workers from China’s countryside to work at countless factories in coastal provinces, churning out cheap toys, clothing and electronics that helped power the country’s economic ascent.

Now, factories are rapidly replacing those workers with automation, a pivot that’s encouraged by rising wages and new official directives aimed at helping the country move away from low-cost manufacturing as the supply of young, pliant workers shrinks.

It’s part of a broader overhaul of the economy as China seeks to vault into the ranks of wealthy nations. But it comes as the country’s growth slows amid tepid global demand that’s adding pressure on tens of thousands of manufacturers.

With costs rising and profits shrinking, Chinese manufacturers “will all need to face the fact that only by successfully transitioning from the current labour-oriented mode to more automated manufacturing will they be able to survive in the next few years,” said Jan Zhang, an automation expert at IHS Technology in Shanghai.

Shenzhen Rapoo Technology Co is among the companies at ground zero of this transformation. At its factory in the southern Chinese industrial boomtown of Shenzhen, orange robot arms work alongside human operators assembling computer mice and keyboards.

“What we are doing here is a revolution” in Chinese manufacturing, said Pboll Deng, Rapoo’s deputy general manager.

The company began its push into automation five years ago. Rapoo installed 80 robots made by Sweden’s ABB Ltd to assemble mice, keyboards and their sub-components. The robots allowed the company to save $1.6 million each year and trim its workforce to less than 1,000 from a peak of more than 3,000 in 2010.

Such upgrading underscores the grand plans China’s communist leaders have for industrial robotics. President Xi Jinping called in a speech last year for a “robot revolution” in a nod to automation’s vital role in raising productivity.

Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation as well as development of a home-grown robotics industry.

Some provinces have set up their own “Man for Machine” programs aimed at replacing workers with robots.

Guangdong, a manufacturing heartland in southern China, said in March it would invest 943 billion yuan ($148bn) to encourage nearly 2,000 large manufacturers to buy robots, the official Xinhua news agency reported. Guangzhou, the provincial capital, aims to have 80 per cent of manufacturing automated by 2020.

A relentless surge in wages is adding impetus to the automation revolution. China relied on a seemingly endless supply of cheap labour for decades to power its economic expansion. That equation is changing as the country’s working age population stops growing and more Chinese graduate from university, resulting in a dwindling supply of unskilled workers, annual double-digit percentage increases in the minimum wage and rising labour unrest.

Deng said Rapoo’s wage bill rising 15-20pc a year was one big factor driving its use of robots.

“Frontline workers, their turnover rate is really high. More and people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure,” he said.

Published in Dawn, September 24th , 2015

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