In what could prove to be disastrous for the average Chinese day laborer, factories in the Pearl River Delta have decided to start replacing their human workforces with robots:
Robots are to invade factories in the Pearl River Delta as manufacturers gear up their investments in technology to take advantage of government incentives such as subsidies.
Investments in robotics are to hit record levels, experts predict, after Guangdong’s announcement that it would spend 943 billion yuan (HK$1.2 trillion) on replacing human labour with robots within the next three years.
But even as municipalities in the province look to robotics to overcome labour shortages and spur innovation to counter the economic slowdown, experts are urging caution.
Why are they urging caution? They think the government subsidies will eventually dry up, leaving factories on the hook for billions they can’t afford to pay back. But as far as I can tell, that’s not the greatest reason to show caution.
The greatest reason is unemployment. One of the first factories to employ robotic labor wants to reduce its current workforce of 1,800 to 200—a 90% decrease. If all the factories in China, or even most of them, were to implement this kind of mechanized revolution, what would those unemployed workers do for a living? It’s possible some of them would be able to find jobs in the still manual agricultural sector, but many of them would be permanently unemployed.
And that wouldn’t stop production since the Chinese market doesn’t consume most of what is manufactured in the Pearl Rive Delta anyway. But what if the economic situation in the US were to go south? China would be stuck with huge capital debts, no market, and a huge population of unemployed and angry Chinese citizens.
But there is another option. Aside from the initial capital investment and the cost of upkeep, robots are very efficient and cheap solutions to a mass manufacturing problem. They are the right fit for the current Chinese manufacturing paradigm. It would be better to treat robots like robots than to keep treating humans like robots.
And if cheap human labor has driven retail prices into the basement, what could even cheaper robot labor do? It could make it so the unemployment issue was less burdensome, since the cost of living could effectively be reduced. Perhaps even average Chinese people would be able to afford Chinese goods. And China could maintain its current economic growth without too much help from Western markets. How far that could be taken is uncertain, but I’m sure we’ll find out.