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The Future of China's Manufacturing Industry is in Automation - NEWS - HONGSEN INTELLIGENT
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The Future of China's Manufacturing Industry is in Automation

Release date:2017-08-10 18:11:05

According to British "Economist" report, Wong Chap Wing is a Hong Kong citizen who runs a factory in Dongguan, an industrial city north of Shenzhen. Hipfai is a private company under his name, and his main business is to provide printed metal parts for printers and copiers. The energetic old man in his seventies began dyes and made molds from 1966, and now he cannot help but recall the gratitude of those who immigrated to Hong Kong at work. He complained: "There are no enough skilled workers now." Young people scoff at the work of the factory. He used to pay the wages of 600 yuan a month, and now they ask for 5,000 yuan.



If the factory does not upgrade, the future will no longer clear. Wong wants to move the factory into a cheaper place inland, but it is too little to find the money that can be saved. He said that many of his subordinate contractors with his region were getting off factories. Looking at the old equipment and his factory workers, this looks greasy noisy place will face the risk of closure.


Turn to another factory and you will find the future: a mixed assembly line - the shiny Japanese-made robots and workers working together. Consultant Peter Guarraia explains that the global trend in factory automation is "working with robots": robots will be designed to be used to collaborate safely with humans. They will do the quality check for the workers, and the production line will be able to program them.

Wong spends 200,000 yuan on each robot and is expected to recover his investment in three years because of the higher vitality of the reassembled production line. Looking back, "I cannot imagine all the robots here," he said. "The reason I came here was because of cheap labor.”


Dongguan has developed a policy to encourage automation, which is part of the national industrial upgrading strategy. The Dongguan government has developed a policy to encourage automation, allocating 200 million yuan a year to help factories reduce oprating posts.This is part of the national strategy, through the automation upgrade manufacturing industry. The government of the Pearl River Delta region is the leader of this change. Guangdong Provincial Government promised to invest 943 billion yuan to promote the province's robot production and application. Guangzhou is very optimistic that four to five percent of the work will be automated by 2020.

Midea eadquarters is located in Foshan near Guangzhou, and it seems that the day of automation have arrived. The company started in 1968 with 5,000 yuan, and the factory was only 20 square meters. In the situation of a recession, founder He Xiangjian led the team to collect all resources to make plastic caps, glass bottles and rubber balls. Today, Midea has become the "world top 500" enterprises, being one of the world's largest household appliance manufacturers. He Xiangjian, who holds the controlling stake, is now a billionaire. Last year, Midea offered the price of nearly 50 billion US dollars to annex the German robot company Kuka. In addition, cooperating with the Japanese robot company Yasukawa to set up a plant, Midea will invest 10 billion yuan to develop robots for their own factories or for sale.

There are two main reasons why Delta plants need to be upgraded. First, compared to its competitors, China's automation level is still very low. In 2015, the average per capita per thousand factory workers in the robot less than 50 people, while Germany and Japan is about 300 people, South Korea is more than 500 people (see photo).


Second, China's cheap labor is in short supply, which significantly pushed the wages high. China's low birth rate is exacerbated by the one-child policy (now withdrawn), which means that the working-age population is at its peak and will be substantially reduced over the next few decades. Poor rural residents from the inland provinces to the Pearl River Delta, large-scale flow is slowing down, no labor inflows, growth targets will be more difficult to combat.

Therefore, China urgently needs to improve its productivity. In the 20 years before 2016, the average annual growth rate of labor productivity was 8.5%, but in the past three years, this growth rate has slowed to less than 7%, while the absolute level is still very low, only  15-30% of OECD countries.

However, automation should be market-driven not subsidized, and there are signs of bubbles. As the official promotion of "local innovation", China's automation companies even if the technology is not good enough to get subsidies.

In an era of rapid economic growth and low labor, Chinese bosses do not have to worry about the efficiency or quality of their equipment. If there is a problem, they will hire more people, rather than invest in simple automation. Now, many people use hardware instead of humans. Advisory firm AlixPartners warned that China could "be listed as a failed low-cost state model economy."

Translated from Original Article: http://www.ca800.com/news/d_1nvfp0r1rdc11.html