China’s labour force is rapidly changing, and not only because of COVID-19. Find out how long-term workforce transformation is driving technological advances in the Chinese manufacturing sector and what it means for your business.
If you’re like most manufacturing leaders, we’re sure you’ll agree that business isn’t returning to normal. Many challenges that kept you up at night in 2021 are probably still top of mind as we find ourselves entering the fourth quarter of 2022.
Inflation at levels we haven’t seen since the 1970s compounds the frustration. When we add disruptions from the war in Ukraine into the mix, it seems clear the trade stability we all took for granted before the pandemic may now be a thing of the past.
Times like these call for agility and expecting the unexpected. Understanding global labour trends, particularly in China, the world’s largest manufacturing workforce, will be vital for the foreseeable future.
Quite apart from the pandemic and its aftermath, long-term, domestic changes in China are transforming the face of work there. This post outlines what Kingstec sees as the most significant Chinese labour force trends western manufacturers need to keep in mind.
China’s workforce demographics are shifting rapidly. The traditional manufacturing workforce is aging, and younger workers aren’t following in their parents’ footsteps.
According to Chinese government forecasts, 40 million workers will retire over the next five years. Younger workers entering the labour market will only partially offset this, leaving a net decline in the overall workforce of about 35 million people.
Compounding these trends, today’s Chinese youth have different values and attitudes than their parents’ generation. Educational opportunities have made younger workers more upwardly mobile. Increasingly, they’re finding office work in the growing service economy that pays more and is less demanding.
Rural migrant workers are also less inclined to seek manufacturing jobs these days. They see COVID-19 as an urban problem, so they’re choosing to stay in their rural communities instead of lodging temporarily in industrial cities to pick up short-term work.
Forward-thinking manufacturing facilities in China are responding to these challenges through advanced automation. China is now the world’s largest market for robots. Five years ago, China had 49 industrial robots for every 10,000 workers. Today it has 246.
In fact, China’s latest Five-Year-Plan declared robot technology for industrial advancement a national strategic priority. China is a leader in both the production and deployment of robotic technology.
One of the most game-changing advances in Chinese manufacturing technology is robotic vision. Traditional robots were blind devices that could only move based on predetermined software algorithms. This restricted conventional robotic applications to highly repetitive, strictly-defined tasks.
Vision technology uses integrated cameras to enable robots to work with far greater precision. It also supports robot collaboration using artificial intelligence (AI).
For example, entering parts at the beginning of an assembly line traditionally required human intervention. Someone had to be able to examine the part visually and then place it correctly on the conveyor. Today’s vision-enabled collaborative robots can perform this task. They can also replace workers who inspect, identify and measure parts.
Vision-enabled robots can even read tags or other instructions using barcodes. Machine learning enables robots to correct their own movements, eliminating overlaps and misalignments.
Traditionally, Chinese manufacturing’s appeal came from providing skilled labour at low wage costs. These days, as the labour market matures, many low-margin, labour-intensive industries are shifting to Southeast Asian countries like Vietnam.
Increasingly, China’s competitive advantage derives from innovation and enhanced productivity from advanced technology. To accommodate this transformation, manufacturing firms are rapidly expanding factory capacities.
Firms are expanding or building larger facilities to accommodate future production growth and more advanced robotics. Forward-thinking manufacturers seek to avoid continual relocation as production demands continually expand.
Since they can no longer count on migratory workers to come to them, Chinese contract manufacturers are becoming more selective about new plant locations. They’re building their larger, technology-enabled factories in population centres with large, qualified local labour markets already in place.
The race is on to produce better-quality goods, faster, and with less downtime through technology. Chinese industry is no longer merely a consumer or imitator of advanced western technology.
Increasingly, manufacturers in China focus on local innovation. Part of this is cultural. Rapid transformations in China’s way of life have fostered a workforce at all levels that’s highly adaptive to change and accustomed to adopting new ways of working.
New manufacturing equipment in China is vital to the business strategy of taking on higher-end manufacturing contracts. Innovative tools can not only replicate human skills, but they can also perform tasks requiring more precision, accuracy and delicacy than workers could deliver in the past.
China is also strongly committed to green technology. In its most recent five-year-plan, the Chinese government aims to foster a more circular economy by encouraging recycling, remanufacturing, green product design and developing renewable resources.
The plan calls for promoting the circular economy in industrial parks. This includes encouraging higher resource utilization, the construction of green factories and the creation of eco-industrial demonstration parks.
These initiatives are spurring technological innovation and improving resource efficiency in the manufacturing sector. China intends to have a fully implemented circular production system by 2025.
These trends offer challenges combined with opportunities for western firms partnering with Chinese contract manufacturing facilities. Kingstec can help your business navigate this new economy, locating firms with the advanced technology and dependable work force your company needs.
Nobody knows the Asian manufacturing sector like Kingstec. We can introduce you to a range of high-quality, cost-efficient business partners in China. It’s still the world’s workshop and it will be for many years to come.
Why not call us today to discuss how your business can benefit from partnering with China’s advanced, cost-efficient, highly adaptable contract manufacturers to produce your products?
