Robot invades labor market in China as labor costs soar

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Fan Xiangai comes from three generations of carpenters but he decided to quit the job in a furniture factory he worked for after being unable to compete with an industrial robot brought into the factory in 2009, a move that caused his salary to decline at the same time.

More than 300 people used to work in Fan’s factory, but only 100 employees stayed after their work was automated, and Fan was among them.

However, Fan attended a worker protest soon after when the manager did not offer better benefits, even though profits dramatically increased.

“The boss saved costs on labor and made higher profits with these machines. But we still have the same work load, without a bonus at the end,” said Fan.

Meanwhile, engineers who mastered mechanism operation and assembly line control have become popular in the labor market. They are usually offered salaries of over 10,000 yuan per month.

In recent years, China has gradually lost its advantage in labor costs in the manufacture industry. In 2016, costs were only 4% lower than levels in the US.

A Foxconn factory, the largest manufacturer of iPhone parts, has reduced its number of employees from 110,000 to 50,000 as of January 2016. In south China’s Guangdong Province, replacing manpower with industrial robots has become a trend.

To push forward this new industrial revolution, the city of Dongguan in Guangdong decided to invest 200 million yuan in the next three years to help local manufacture operators in the automation process.

China has a potentially huge market for machine suppliers, according to a report from Caijing. Apart from large corporations like OPPO and Huawei, more small business operators are attempting to increase their productivity with new technology.