PEARL BRIEFING
Pearl Briefing
by

Risk and reward in running the delta's factories with robots

Machines are helping factories cut labour costs amid manpower shortage

PUBLISHED : Saturday, 09 August, 2014, 4:15am
UPDATED : Saturday, 09 August, 2014, 4:15am

As artificial intelligence experts debate whether robots will be an economic boon or a social threat, several cities in the Pearl River Delta have taken a leap by launching government-backed AI programmes.

Nearly 2,000 analysts surveyed by the US-based Pew Research Centre are split about the role of robots in society in the coming decade, with 52 per cent optimistic about the future, believing more jobs would be created than taken away by the technology. The rest worry about a possible breakdown in social order if robots replace human workers in a range of industries all at once.

But local governments in the manufacturing hub of Guangdong hope robots can help the cities withstand the double challenges of rising labour costs and a worsening manpower shortage, local media reported.

Officials also hope rising demand for robots can help turn the previous global factory for shoes, bags and toys into a production base for high-end electronic equipment, including robots and wearable devices.

The Yangcheng Evening News reported last month robots were cutting the number of workers by two-thirds in some companies, taking up jobs including welding, which can be dangerous activities for humans.

Hong Kong-headquartered manufacturer Jiali Group is one company going down the robot road. It decided to stay in Dongguan after investing 50 million yuan (HK$62.8 million) to bring 200 robots onto production lines. But many others are moving their factories out of the delta region.

As many as 32 per cent of Hong Kong manufacturers are planning to move their factories from the Pearl River Delta in three years, due to rising labour costs and labour shortages, a survey by the Chinese Manufacturers' Association of Hong Kong found.

Robot usage in the delta region is increasing 30 per cent every year, the Shenzhen Robotics Association's statistics show.

The phasing out of human workers has gathered pace in the short term as several cities, including Guangzhou, Dongguan and Shunde , have released government plans to speed up the process, offering big subsidies for installing robots on assembly lines. Shenzhen, Zhuhai and Dongguan, meanwhile, are aiming to become the country's leading base of robot manufacturing even though they have not yet acquired the core technology to produce such high-end equipment, as some experts have pointed out.

But once the technical barriers are overcome, the human-to-robot projects may provide the answers that desperate Guangdong officials are looking for to restructure the province's export-oriented economy.

At the same time, those officials might also want to consider the social consequences that could arise in the densely populated delta region.

jing.li@scmp.com