Soaring Chinese labor costs attract robots

China , Labor Nov 14, 2013 No Comments

RobotsFrom 2005 to 2012, average labor costs in Zhejiang, a hub for private manufacturing enterprises, almost tripled from 14,847 yuan to 41,370 yuan ($6,800) a year, an annual increase of nearly 16 percent.

Zhejiang province is to invest 500 billion yuan ($82 billion) over the next five years to encourage manufacturers to adopt more robots to overcome the short supply and high cost of labor.

The program is underway and will help at least 5,000 companies a year, a source with the investment division of the Zhejiang Economic and Information Commission told China Daily, without giving details.

Replacing humans with robots is the most effective way to tackle the labor shortage and rising labor costs, the commission said.

In a survey conducted by the commission in May, 75 percent of respondents said rising costs were the main reason for switching to robots.

As factories used more robots, the proportion of surveyed enterprises with labor shortages dropped from 80 percent last year to 56.4 percent. The survey was based on replies from 515 enterprises that have introduced robot workers.

More than 60 percent of the enterprises surveyed have reduced production line employees by at least 10 percent, while 16 percent of the firms have cut their production jobs by more than 30 percent. Meanwhile, robot workers have helped these factories improve productivity by more than 10 percent.

via Robots help counter soaring labor costs – chinadaily.com.cn

Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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