Companies in China replace workers seeking better wages with robots

  • Chinese factories have started replacing human laborers with machines
  • This is due to increasing labor cost in the country
  • Several firms have started to cut down its production cost with the use of machines instead of laborers

China-based CCTV news said in a story that factories are having a hard time meeting demands of the markets due to the increasing labor cost. This has led them to replace the workers in a line assembly with machines instead.

German company Carl Zeiss, which manufactures lenses, is among the companies that have shifted to a more automated production line.

“In 2012, the Zeiss Group informed us that labour in China was twice as expensive as in Mexico and four times that in India,” Zeng Zhiyong of the Carl Zeiss’ Guangzhou factory said.

“We were very surprised at this huge gap and started to think of how to improve productivity.”

This has effectively lessened the cost of the lenses they are selling as their output has increased to 5 million annually from the previous 4 million. Labor cost has also dramatically decreased despite the need to allocate funding for the procured machines.

Meanwhile, Rongxin Packaging Corporation, which produces 1.8 million cans per day, does not employ human labor.

General Manager Ji Yonghong said they just bought $34 million worth of machines in 2013. Now, they just hire better educated workers for machine maintenance and quality control.

“We used to have 60 workers in one shift but now we only need 48. And they’re only responsible for quality control and machine maintenance,” he said.

The “Made in China 2025” plan has led to the China-based factories to replace human workers with machines.

The 10-year plan pointed out that automated production is among the priorities to transform China “from a manufacturing giant into a world manufacturing power.”