From driverless automobiles to robotic warehouses, China is popping to automation to resolve inhabitants issues

GUANGZHOU, China – Qin Jiahao has been working in the logistics business of Chinese e-commerce giant for around six years. Now much of its work has been automated.

“In the past, almost all work was done manually. After automation, almost half of our employees’ work is done automatically. This reduces our work intensity,” Qin told CNBC.

“In the past, I was responsible for collecting goods and putting them on shelves … Now that the goods have arrived here, the automation devices will put goods in a certain location and then put them on shelves. This whole process is completed by Automation. “

As you walk through’s 500,000-square-foot logistics park in Dongguan, south China, you’ll see giant machines that help automate tasks like packing and shelving.

Qin’s situation shows a broader trend in China – the push towards automating jobs. The labor market in the world’s second largest economy is facing major challenges, including an aging population and rising wages.

“The aging of the population is still fast developing … China now faces the challenge of possibly getting old before it gets rich,” Jonathan Woetzel, senior partner at McKinsey, told CNBC.

An automated machine stacks packages in the huge logistics center of the Chinese e-commerce giant in Dongguan, China.

Arjun Kharpal | CNBC

China’s working-age population has shrunk by more than 5 million people in the past decade as births fell, according to the country’s National Bureau of Statistics. The country is still feeling the effects of the one-child policy introduced in the late 1970s to control the rapidly growing population.

According to official figures, the country’s population doubled from over 500 million people to over 1 billion between the 1940s and 1980s. Over the next 40 years this growth slowed to 40%. Today the country has 1.4 billion people – more than four times the size of the United States

However, the proportion of the working-age population in China is decreasing.

Automation is seen as a way to solve some of these problems.

“Automation is of course one of those great opportunities,” said Woetzel. “And with that we are including digitization both for the customer and, more importantly, in the chain back to the suppliers. That will really be the driver for increasing all this productivity.”

“In the financial sector about 10 years ago, if you look at the average productivity of a financial worker in China compared to Europe, it was maybe 20%. Now it’s closer to 40% or 50%. So still lagging behind, but that level To have change over the course of almost … five years is almost unheard of. “

Driverless car push

However, automation goes beyond obvious places like factories or warehouses.

China is advancing technologies like driverless cars with artificial intelligence, an area Beijing seeks to dominate in its broader technological battle against the US

The southern Chinese city of Guangzhou has developed into an important test center for autonomous vehicles. A start-up called WeRide is developing technologies for driverless cars and buses.

WeRide’s self-driving robobus is based at the company’s headquarters in Guangzhou, China.

Arjun Kharpal | CNBC

Autonomous vehicles could replace jobs like taxi drivers. Tony Han, CEO of WeRide, sees autonomous cars as a way of solving some of the problems of an aging population.

“One (of the problems) is labor shortage, especially in the concept of an aging society. In China, and also in the United States, in most of the industrialized countries, human labor is becoming more and more expensive. People need to pay better, need more welfare,” Han said.

“Think about whether you want to get a chauffeur, whether you want a driver, it’s completely expensive and sometimes calling a taxi in a metropolis … quite expensive too. Can we find an inexpensive way to do that too provide? of transport service to all? “

Job relocation

However, increasing automation could also lead to job losses.

McKinsey estimates that between 2018 and 2030, up to 220 million Chinese workers, or 30% of the workforce, could need a career change.

“This is of course a great challenge for the employer, but also for the employee, but also for the government and society as a whole,” said Woetzel.

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