Homegrown robots help drive China’s global export surge | FT #shorts

Key Concepts

• Low-cost automation
• Made in China 2025
• Industrial robots
• Global export share
• Labor-intensive industries
• Typical development trajectory

China's Automation Drive and Manufacturing Transformation

China is undergoing a significant transformation in its manufacturing sector, driven by a surge in low-cost automation. This technological adoption is enabling Chinese manufacturers to increase production volume and simultaneously reduce costs, leading to even lower prices for their goods.

Government Initiatives Fueling Automation

This aggressive automation drive is significantly supported by President Xi Jinping's "Made in China 2025" plan, alongside other advanced manufacturing initiatives. These government-backed strategies aim to upgrade China's industrial capabilities and competitiveness on a global scale.

Scale of Industrial Robot Adoption

The impact of these initiatives is evident in the sheer volume of industrial robots being deployed. Chinese factories are currently installing approximately 280,000 industrial robots annually. This figure represents a substantial portion of the global total, accounting for roughly half of all industrial robots installed worldwide.

Defying Typical Development Trajectories

Economists suggest that this rapid automation is a key factor in China's ability to deviate from the typical development path observed in many economies. Historically, as wages rise in developing nations, there is a tendency to lose low-end manufacturing to countries with lower labor costs. However, China appears to be circumventing this trend.

Evidence of Continued Competitiveness

Despite rising labor costs, China's manufacturing sector remains highly competitive. For instance, the average Chinese factory worker earns approximately three times more than their counterparts in India. Nevertheless, research indicates that China has actually increased its global export share in labor-intensive industries between 2019 and 2023. These industries include the production of small manufactured goods, furniture, and toys.

Conclusion

China's strategic investment in low-cost automation, bolstered by government initiatives like "Made in China 2025," is fundamentally reshaping its manufacturing landscape. This approach is not only enhancing production efficiency and lowering costs but also enabling China to maintain and even grow its export dominance in labor-intensive sectors, defying conventional economic development patterns.