More than half of manufacturers at Jiangsu electronics hub planning switch to robot workforce, survey shows

PUBLISHED : Monday, 21 September, 2015, 5:43pm
UPDATED : Monday, 21 September, 2015, 5:44pm

A total of 600 major industrial enterprises in Kunshan, Jiangsu province, are going to replace human labour with robots within the next five years, according to a survey conducted by the city’s commission of economy and information.

Out of 100 manufacturers surveyed at one of China's largest manufacturing hubs for the electronics industry, over 50 per cent of them said they were preparing robot production lines, while the government said the value of the city’s automation and robotics market would reach 80 billion yuan by 2020, news website chinanews.com reported.

The city’s government is handing out 2 billion yuan in annual subsidies to support local manufacturers who install robots on assembly lines.

So far, there were about 80 robot-manufacturing companies in operation across Kunshan, with an output value of more than 300 billion yuan annually.

The authorities’ ambitious plans for automating the electronics hub have stemmed from concerns over the Kunshan’s recent economic slowdown.

Kunshan has been topped the list China's best “county-level” cities in GDP terms for years, and has attracted large investments from Taiwan electronics manufacturers who supply the likes of Dell, Apple and Hewlett-Packard.

While the city still ranked No 1 last year, it witnessed a 1.8 per cent drop in GDP compared to 2013 to reach around 870 billion yuan – the first slowdown in three decades. Even during the financial crisis of 2008, Kunshan’s gross domestic product still grew at over 15 per cent for the year.

Head of the city’s development and reform commission Song Deqiang said he hoped Kunshan could lead an industry boom in automation and the use of intelligent robots for electronics and manufacturing, stimulating a GDP rise by about five percentage points in the hub over the next five years, chinanews.com quoted Song as saying,

However, a lack of official statistics have failed to show the whole picture about how successful the latest developments in robot-manufacturing across China have been.

Meanwhile, manufacturers of industrial robots in the southern province of Guangdong, China’s traditional manufacturing hub, are already seeing declining profits as demand dwindles in tandem with the country’s economic slowdown.

This suggests the fault lines of China’s slowdown may run deeper than previously thought, given that the nation is said to be in the throes of an automation revolution, as makers look to robotics to overcome labour shortages and spur innovation amid rising wages and in line with a central policy touted by Premier Li Keqiang this year.

According to industry insiders in Guangdong, competition has become increasingly fierce as most manufacturers of industrial robots have been forced to engage in a price war.

Local robot makers said most Chinese companies in this field operate at the lower scale of the quality spectrum and depend on imported components.