Now that wages in China are being forced up as the huge and rapid rise in middle-class income earners is taking its rightful place of entitlement to wealth on the world stage, thanks to the likes of Preferential Trade Agreements signed by USA in the mid-, to late-1990’s, wages are rising in China. China is rapidly losing its crown as one of the lowest-cost labor geographies. To remain competitive, manufacturers must perpetually move operations to the cheapest labor providers. This largely explains why the USA and the rest of the G-7 have been secretly negotiating more preferential trade agreements with the next round of have-not countries willing to provide low-cost labor. [See my nugget about Pareto Shift”] Even Chinese-based corporations are being forced to seek cheaper labor, elsewhere, or other options, in order to stay competitively priced on the world stage.
One of the most productive ways for companies to slash labor costs is to shift from manual labor, (from people!), to robotics.
Reuters reported that many manufacturing nations have already made a rather large commitment to automation and, in particular, robotics. Some more than others. China is currently near the bottom of the list. But the race into robotics has only begun. China and other nations are rushing to catch up. Right now China is ranked among the lowest density of robots per worker population , at manufacturing companies, when measured against number of workers.
- 437, per 100,000 workers, in South Korea,
- 323, in Japan,
- 282, in Germany
- 152, in the United States
- 30, in China
China is targeting 2017 as the year in which to have about 428,000 industrial robots. Countries manufacturing automobiles, the biggest ticket items that are manufactured and sold on a mass market basis, are becoming more fully committed to robotic technology as a means of retaining their competitiveness, globally. According to the article in Reuters, the next phase will be a rise of robotic technology among the electronics manufacturers.
Japan ranks among the most significant makers and exporters of robotic technology, but other countries see the light, as well and are competing assertively.
[Source: “China to have most robots in world by 2017” By Georgina Prodhan. REUTERS. Feb 6, 2015.]
Makers of robots have a bright future. Workers, not so much.