With rising labor costs, more and more companies have chosen to use machines for generations. On June 20th, the “China Enterprise-Labor Matching Survey†(CEES) research team released that it showed that although China’s labor advantage is being lost, the manufacturing industry is still competitive. About 8% of the sampled regions use robots.
CEES was initiated by scholars from the Institute of Quality Development Strategy, Wuhan University, Chinese Academy of Social Sciences, Stanford University, and Hong Kong University of Science and Technology. In 2015 and 2016, the survey team selected more than 1,000 companies in Guangdong and Hubei to carry out research and about 14,000 employees filled out questionnaires.
According to research, 8% of the transferred companies use robots, of which 10% in Guangdong and 6% in Hubei; 40% use automated equipment. The proportion of robots used by state-owned enterprises and foreign-funded enterprises is 14%, which is much higher than that of private enterprises. The proportion of general trade and processing trade enterprises using robots is 15% and 11% respectively, which is higher than 5% of non-export enterprises. From the industry point of view, machinery and equipment manufacturing, electronic equipment manufacturing, metal manufacturing and other industries use the highest proportion of robots, while textile and leather manufacturing use the lowest proportion of robots.
The choice of machine generation is derived from the company's "recruitment difficulties, recruitment expensive." The survey shows that the actual wages of Guangdong's manufacturing workers increased by 5.8% between 2013 and 2014, an increase of 8.3% between 2014 and 2015; the actual wages of Hubei manufacturing employees increased by 5% between 2014 and 2015. From 2014 to 2015, employment in Guangdong's manufacturing industry decreased by 6.3%, while that in Hubei dropped by 3.3%, among which first-line workers fell the most, while technical designers slightly increased.
It is worth noting that compared with other countries, the labor advantages of Chinese companies are losing. In 2015, the actual wages of Chinese workers (including the year-end bonuses) were 4,216 yuan/month, equivalent to 635 US dollars/month (converted by the nominal exchange rate at the end of 2015), which was lower than the US’s US$3,099 per month, but higher than the US$206/year of the same period in Vietnam. Month, Malaysia's $538/month.
Despite this, the research team does not believe that Chinese manufacturing is losing competitiveness. Cheng Hong, dean of the Wuhan University Quality Development Strategy Research Institute and chairman of the CEES Management Committee, told Caixin that in the international competition, Chinese manufacturing companies have economies of scale, and they have formed a sound industrial chain. Countries that have a lower labor force still have Advantage. In the future, Chinese companies must complete transformation and upgrading through technological innovation and management upgrades. At present, many Chinese companies are among the forefront internationally.
The CEES survey found that only 13.3% of Chinese companies used imported intermediate products in 2015. Their value accounted for only 3.7% of the value of all input products. Companies’ reliance on imported capital goods was higher than that of imported intermediate goods, indicating that China’s global value. The status in the chain is improving. In 2015, 27% of companies used imported equipment, while imported equipment accounted for 11% of total machine price.
In order to promote enterprise technology upgrading, some local governments and robots and automation equipment purchases provide subsidies. For example, Dongguan subsidizes 10% of newly purchased robots.
"Machine generation is based on the decline of the labor force, labor shortages, and unemployment. It is not a problem," said Li Hongbin, a researcher at the Center for International Development at Stanford University. "China's manufacturing industry must rely on technology instead of relying on cheap labor."
CEES was initiated by scholars from the Institute of Quality Development Strategy, Wuhan University, Chinese Academy of Social Sciences, Stanford University, and Hong Kong University of Science and Technology. In 2015 and 2016, the survey team selected more than 1,000 companies in Guangdong and Hubei to carry out research and about 14,000 employees filled out questionnaires.
According to research, 8% of the transferred companies use robots, of which 10% in Guangdong and 6% in Hubei; 40% use automated equipment. The proportion of robots used by state-owned enterprises and foreign-funded enterprises is 14%, which is much higher than that of private enterprises. The proportion of general trade and processing trade enterprises using robots is 15% and 11% respectively, which is higher than 5% of non-export enterprises. From the industry point of view, machinery and equipment manufacturing, electronic equipment manufacturing, metal manufacturing and other industries use the highest proportion of robots, while textile and leather manufacturing use the lowest proportion of robots.
The choice of machine generation is derived from the company's "recruitment difficulties, recruitment expensive." The survey shows that the actual wages of Guangdong's manufacturing workers increased by 5.8% between 2013 and 2014, an increase of 8.3% between 2014 and 2015; the actual wages of Hubei manufacturing employees increased by 5% between 2014 and 2015. From 2014 to 2015, employment in Guangdong's manufacturing industry decreased by 6.3%, while that in Hubei dropped by 3.3%, among which first-line workers fell the most, while technical designers slightly increased.
It is worth noting that compared with other countries, the labor advantages of Chinese companies are losing. In 2015, the actual wages of Chinese workers (including the year-end bonuses) were 4,216 yuan/month, equivalent to 635 US dollars/month (converted by the nominal exchange rate at the end of 2015), which was lower than the US’s US$3,099 per month, but higher than the US$206/year of the same period in Vietnam. Month, Malaysia's $538/month.
Despite this, the research team does not believe that Chinese manufacturing is losing competitiveness. Cheng Hong, dean of the Wuhan University Quality Development Strategy Research Institute and chairman of the CEES Management Committee, told Caixin that in the international competition, Chinese manufacturing companies have economies of scale, and they have formed a sound industrial chain. Countries that have a lower labor force still have Advantage. In the future, Chinese companies must complete transformation and upgrading through technological innovation and management upgrades. At present, many Chinese companies are among the forefront internationally.
The CEES survey found that only 13.3% of Chinese companies used imported intermediate products in 2015. Their value accounted for only 3.7% of the value of all input products. Companies’ reliance on imported capital goods was higher than that of imported intermediate goods, indicating that China’s global value. The status in the chain is improving. In 2015, 27% of companies used imported equipment, while imported equipment accounted for 11% of total machine price.
In order to promote enterprise technology upgrading, some local governments and robots and automation equipment purchases provide subsidies. For example, Dongguan subsidizes 10% of newly purchased robots.
"Machine generation is based on the decline of the labor force, labor shortages, and unemployment. It is not a problem," said Li Hongbin, a researcher at the Center for International Development at Stanford University. "China's manufacturing industry must rely on technology instead of relying on cheap labor."
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