Opinion | Greying China is poised to reap a new economic dividend: robotics

As the population shrinks, China is looking to compensate for a dwindling youth dividend with robotics. Already the world’s largest market for industrial robots, it is now a manufacturer to be reckoned with too

Reading Time:4 minutes

Published: 5:30am, 23 Jan 2024Updated: 5:56am, 23 Jan 2024

Last week, China’s statistics bureau revealed the country’s population had fallen by 2.08 million in 2023 to 1.409 billion – the second straight year China has reported a decrease. The 2022 population was already 850,000 smaller than the previous year. The rapidly greying nation seems to be headed for a demographic cliff.

Looking back on China’s reform and opening up, its success was predicated on two pillars: institutional deregulation and the demographic dividends of a young and growing population. Such dividends, however, are evaporating at an accelerated pace.

The question is what China can count on going forward. As the nation hankers for ways to compensate for its dwindling youth dividend, robotics, however unlikely, have come into the picture as an answer.

The apex of China’s demographic dividends was probably around 2010. Data suggests the nation’s workforce as a share of its population rose from 58 per cent in 1979, when economic reforms started, to a high of about 74 per cent in 2010.

Things, however, took a turn for the worse after that. Young migrants, reluctant to take on back-breaking work like their parents, began to leave the factories in droves between 2010 and 2014. During that period, traditional manufacturing hubs like the Pearl and Yangtze river delta regions experienced an exodus of labour and widespread hiring difficulties.

Alarmed by the steady, seemingly unstoppable erosion of demographic dividends, China took steps to find an alternative growth engine. It turned to automation. Beijing promoted the “Made in China 2025” strategy, its answer to the Industry 4.0 revolution championed by countries like the United States, Germany and Japan.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x