Upgrading the Workshop of the World: Can Automation Spur Economic Development in China?

Published on: 2017-06-30


Naubahar Sharif
Naubahar Sharif, HKUST IEMS Faculty Associate, warns that automation is not the panacea for China’s stalling economic development as believed.

Industrial upgrading is central for the “Made in China 2025” economic plan, which hopes to push China up the global value chain into intelligent manufacturing. A pilot program, “Replacing Humans with Robots,” launched in 2009 in response to the global economic crisis. Yet results have been mixed. Prof Sharif recommends a deeper look into the micro- and macro-level effects of automation, to figure out how China can maintain its rate of growth while still developing its manufacturing expertise and the skills of its workforce. The study was conducted with postdoctoral fellow Yu Huang.

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Key Points

  • In Dongguan, the ‘Replacing Humans with Robots’ initiative is an example of how China hopes to upgrade industrial performance via automation. China’s hope is to move its manufacturing sector up the global value chain.
  • Results have been mixed, with some firms improving profits and productivity but leaving workers feeling disposable and in need of high-tech skills training, despite enjoying safer working environments.
  • To succeed, China must hurry to address the growing skilled labor gap while also expanding the domestic market for Chinese brands and
    encouraging branding and design = practices which add significant product value.

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