China may have the largest population in the world, with 1.426 billion, but its working-age population is also shrinking. To alleviate workforce challenges, China is promoting the modernization of its manufacturing sector by installing as many robots as possible in its factories.
Their investment in the robotics industry aims to make the country a global leader in the future of manufacturing. Since 1986, China's effort to modernize its manufacturing industry has been an important initiative. They created the National High-tech R&D Program to upgrade the industrial sector, and by 2013, it had surpassed Japan as the largest consumer of industrial robots.
The Rise of Industrial Automation in China
According to Wall Street Journal, shipments of industrial robots in China rose to 45% in 2021 compared to the previous year. The East Asian country accounted for almost 50% of all installations of heavy-duty industrial robots last year, making it the number one market for robot manufacturers. They installed nearly twice as many new robots in the Americas and Europe.
Experts explained that this effort to increase automation is catching up with its richer peers, such as the US, Japan, Germany, and South Korea. The rapid rise of its robotics industry reflects a growing recognition in China that it needs to adapt as its workforce shrinks.
Embracing the robotics industry allows factories in China to plug a widening labor market gap while keeping its costs down and making it less advantageous for companies in the West to shift to other emerging markets or their own country.
Moreover, automation represents the best way for China to not rely on an expanding workforce to drive economic growth, enhance productivity, and escape the ranks of middle-income countries.
Data on China's productivity show that the output an hour worked in the country last year was one-fourth of the average of the Group of Seven advanced economies and only one-fifth of the level in the US. Fathom Consulting deputy chief economist Andrew Harris told WSJ that a country could not wait until it runs out of its workforce before it starts dealing with the problem.
The UN data shows that China is still the world's factory floor today, which accounts for 29% of global manufacturing, even with trade tensions with the US and increasing Western anxiety about the perceived overreliance on Chinese manufactured goods.
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Made in China: The Government's Initiative in Relying on Homegrown Industries
According to the US International Trade Commission, President Xi Jinping has outlined a plan that identified key tasks that China will focus on to make the country more reliant on homegrown industries by 2025. They call it the Made in China 2025 program and the Robotics Industry Development Program (2016-2020), which was first announced in 2015.
The Made in China 2025 program calls for China to become the leading manufacturing power by 2049, the 100th Anniversary of the People's Republic of China. Their initiatives include investment in technology emphasizing domestic technology, identifying ten key sectors to foster, and a plan targeting the industrial robotics industry.
Meanwhile, the Robotics Industry Development Program (2016-2020) aimed to promote robots in manufacturing to attract foreign investment and increase local production of robots by three-fold. Shipments totaled 381,335 units in 2017, and the country saw a 19% growth rate from 2012 to 2017, projected to increase by more than 600,000 in the coming years if the trend continues.
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