Last month we discussed the fact that officials had approved the latest Five Year Plan for China's economy. The ultimate goal of the plan is to overtake Germany, Japan, and the United States in terms of manufacturing sophistication by 2049, the 100th anniversary of the founding of the People's Republic of China.
To make that happen, the government needs Chinese manufacturers to adopt robots by the millions. It also wants Chinese companies to start producing more of these robots, , and to enable that there is an initiative making billions of yuan available for manufacturers to upgrade to technologies including advanced machinery and robots.
The manufacturing hub for the electronics industry, Kunshan, in Jiangsu province is proving that that initiative is well underway. As the South China Morning Post reports, thirty five companies, including Apple's key supplier Foxconn, spent a total of 4 billion yuan on artificial intelligence last year, and more companies are going to follow suit.
Spurred by the initiative and a desire to cut down on labor costs, Foxconn has reduced its workforce by a whopping 60,000 people thanks to the introduction of robots. Foxconn's headcount went from 110,000 down to 50,000 (adding to the mass layoffs that we have warned will cause further social unrest in China).
We're not sure how all of this will play out in the grand scheme of the Five Year Plan that was put together, but what is clear is that China is wasting no time in executing the early stages of the plan.
That is just the beginning.
The transition from human to robot workers may upend Chinese society. Some displaced factory workers could find employment in the service sector, but not all of the 100 million now employed in factories will find such jobs a good match. So a sudden shift toward robots and automation could cause economic hardship and social unrest. “You can make the argument that robotic technology is the way to save manufacturing in China,” says Yasheng Huang, a professor at MIT’s Sloan School of Management. “But China also has a huge labor force. What are you going to do with them?”
For now, that question remains unanswered, but that won't stop from unleashing the biggest robotic revolution seen in recent years.
In an effort to minimize the social unrest that is already taking place, the country has said that as much as $23 billion will be set aside to cover the layoffs in the coal and steel sectors as it tries to cut down on overcapacity - we're eager to find out how much will be set aside for workers that are being displaced by these robots.