Sieren’s China: Development through automation – Deutsche Welle

For a good decade, the US "Transformers" film series was a great success. But the fifth film, which hit Chinese screens in June, was a relative flop. Could this be because reality has partially surpassed science fiction?

In April, the Chinese logistics company Shentong Express released a promotional video to show how work is carried out in its warehouses. There are no human beings to be seen in the film. Instead, hundreds of orange-colored robots sort packages like busy bees. The People's Daily boasted that Shentong Express' switch to automation could slash its costs by up to 70 percent. Back in the day, there might have been talk of a model company or suggestions that others could learn from the robotics industry.

'Made in China 2025'

The days when China celebrated the working class and intimidated the West with its army of cheap labor are over. Now, the government is looking to automation. The new agenda is called "Made in China 2025" and the idea is to go from being the world's factory to a high-tech superpower. The plan is to be producing 100,000 competitive robots per year by 2020. According to this year's World Robotics Report, China is already well ahead in this sector. It made over 87,000 units last year - 27 percent up from the year before. The president of the International Federation of Robotics (IFR) Joe Gemma said that there had never been such a dynamic increase in such a short amount of time.

DW's Frank Sieren

However, in comparison to other leading global economies, such as the US and Japan, China still has plenty to learn and remains dependent on foreign expertise. The takeover by the Chinese appliance company Midea of the German firm Kuka, one of the leading makers of robots for the car sector, will help to change matters.

But has also triggered some concern in Brussels and Berlin. Germany prides itself on its engineering and needs to have some advances of its own in the robotics sector too. The country's then-economy minister, Sigmar Gabriel, and the German government tried to prevent the takeover at the time by looking for a European investor, but this turned out to be in vain.

Shrinking workforce

China is also trying to counter the negative consequences of its One Child policy through more automation. There are fewer younger people who can work and - crucially - fewer who are willing to work for such low wages. Therefore, many companies in the global plastic and textile industries have moved to other cheaper countries such as Vietnam and Bangladesh.

The speed of China's automation and its consequences are most visible in the industrial metropolis Kunshan, located between Shanghai and Suzhou. It was here where the Taiwanese company Foxconn, which supplies Apple, Microsoft, Nintendo and Samsung, made a daring move in early 2016 when it dismissed 60,000 out of 110,000 employees and replaced them with robots. Yet, nobody in Beijing protested.

This may have been because Foxconn, which in the past has come under fire because of poor working conditions, has promised to train people for tasks that require higher skills in the future so that they can be employed in development and quality control, for example. So, people will be making robots and also controlling them.

Beijing is conscious that such measures cannot compensate for the massive loss of jobs that millions of migrant workers face in the future. Moreover, it's already difficult for university graduates today to find jobs. Their numbers are rising as fast as those of robots.

To prevent mass unemployment, China would have to find jobs for people in the growing service sector. But this is not growing as fast as it could because the Chinese population remains wary of the future and is not spending enough.

Beijing faces a dilemma. There is no alternative to automation if the country wants to remain competitive internationally, but the government will have to find a solution to appease the country's millions of low-skilled workers if they do not want them to rise up against the robots in the future.

Frank Sieren has lived in Beijing for over 20 years.

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Sieren's China: Development through automation - Deutsche Welle