Going Robotic in China – What Does It Mean for Employment?

Robots have always been envisioned as an inseparable part of human lives, especially in far-fetched science fiction in societies hundreds or even thousands of years ahead of us. However, there have already been worries that robots will replace jobs once occupied by actual living humans. Already, we can see factories utilizing giant sophisticated machines to automate production and repetitive tasks. 

This spells a different tune for China, where heavy reliance on cheap human labor once gave it a huge advantage, now seeing a decline. Compared to other countries like Vietnam where workers are paid a net salary of 206USD/month and Malaysia where workers are paid a net salary of 538USD/month, China’s labor costs for workers have risen to 635USD/month — meaning, it is losing its competitive edge in labor costs, which is expected as even the country’s poorest regions are catching up with the rest of the country, development-wise.  

In fact, robots have been found to be cheaper than employing actual humans. Chinese manufacturers are bemoaning that it has become more expensive to hire than ever, with an example of Guangdong’s manufacturing workers seeing an increase in net salary by 5.8% from 2013 to 2014, an increase of 8.3% from 2014 to 2015, and so on and so forth. In 2014 to 2015, the number of employments in Guangdong’s manufacturing industry had dropped by 6.3%. 

As for actual robot usage rates, Guangdong had reported that 10% of the studied corporations utilized robots, and 40% are using automated machines (a slightly different organism from robots). Industry-wise, manufacture of machine parts, manufacture of electronic devices and manufacture of metals have the higher rates of robot usage. In Hubei, front line factory workers faced the highest unemployment rates, while technical design workers saw an increase in employment rate. 

So, what does all these numbers ultimately come down to? The researchers asserted within the study, that a loss in labor cost competitiveness doesn’t necessarily mean that China would lose out in manufacturing, as the country already has a well-established industry chain of production. However, the reality that robots are replacing employment is closer than ever; or rather, it is already here. 

As seen from the example of Hubei, people possessing technical skills in building and designing robots would likely gain an advantage in employment and are in fact more irreplaceable than ever. Not just robots, but tech talents in general can only see a brighter and brighter future ahead — provided that they keep themselves updated on the latest skill sets and technologies, of course. People possessing soft skills, such as communication skills are less likely to lose their jobs to robots and automation too, which is why job positions in levels such as managers will never find themselves extinct. 

China’s case of slowly losing labor costs competitiveness is inevitable, but at the same time, it opens doors to tech talents. As suggested by a researcher from Stanford University, China’s manufacturing industry should look towards developing their technologies instead of heavily relying on cheap labor to save costs. 

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