In the early days of China’s economic growth story, many observers argued they would be doomed by the race to the bottom. Sure, they could profit off manufacturing industries centred on cheap labour, but as salaries rose the contractors would pack up for Vietnam, Thailand and Mexico.
Well, China’s manufacturing wages are now above the minimum wage in South-East Asia, Mexico and Eastern Europe. With this cost pressure is coming the largest roll-out of industrial robotics ever seen in history.
In 2023, more industrial robots were installed in China than in the rest of the world combined. There were 276,300 industrial robot installations recorded. The next highest was Japan with 46,100, then the US with 37,600, Korea with 31,400 and Germany with 28,400.
The roll-out means Chinese robotics installations have continued to grow by 30% each year since 2018. Some 40% of installations are in car manufacturing and about a third in electronics manufacturing. China also has more robots than the US and EU combined working in “logistics” (think, Amazon).
Yet these are not just robots designed for simple tasks. The 450,000 square metre Baiyun Station in Guangzhou was built with robots that can weld and lay concrete.
China has now installed 470 robots per 10,000 employees. In doing so, it has surpassed the levels of automation of both the Japanese and German economies. Singapore remains slightly ahead, as well as Korea, which has one robot for every 10 workers in the entire economy.
In 2016, China pulled off a coup by purchasing a 95% stake in Kuka, Germany’s world-leading robot manufacturer, it what was one of China’s largest ever foreign acquisitions. The purchase caught Germany off-guard and led to it changing its foreign acquisition laws.
The legacy of the one-child policy is part of the impulse for the robotics roll-out. China’s working-age population peaked in 2015, threatening the low-skilled manufacturing economic model. But while necessity is the mother of invention, the roll-out is a sign of the ever-more advanced manufacturing base in the world’s second-largest economy.
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