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OM in the News: China’s Robot Revolution

April 30, 2016

robot chinaAcross China’s manufacturing belt, thousands of factories are turning to automation in a government-backed, robot-driven industrial revolution the likes of which the world has never seen. Since 2013, China has bought more industrial robots each year than any other country, including high-tech manufacturing giants Germany, Japan and South Korea. This year, it will overtake Japan to be the world’s biggest operator of industrial robots. “The pace of disruption in China is unique in the history of robots,” writes The Financial Times Magazine (April 28, 2016). And it is changing the face of the global manufacturing industry. In the process, it is raising broader questions: in emerging economies, will robots assume many of the jobs that once pulled hundreds of millions out of poverty?

In recent years, China has been promoting automation as a way to fill the approaching labor gap caused by the “one-child” policy. It has promised generous subsidies to smooth the way for Chinese companies both to use and build robots. In 2014, President Xi Jinping called for a “robot revolution” that would transform first China, and then the world. The march of the machines around the world has been accelerated by sharp falls in the price of industrial robots and a steady increase in their capabilities. The price of robots will drop by 20% over the next decade, while their performance will improve by 5% each year.

The stereotypical image of China’s factories can still be found in many places: tens of thousands of people in long lines hunched over sewing machines or slotting components into a printed circuit board. But that mode of manufacturing is starting to be replaced by partially automated production lines, with human workers interspersed at a few key points.  Further, China is developing its own robot makers capable of producing machines that are 20-30% cheaper than those made in Germany and Japan.

Classroom discussion questions:

  1. What are the implications for U.S. manufacturing?
  2. What are the implications for developing nations?
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