A shrinking economy and the stalling of some reforms are causing a degree of hardship in China. But some experts believe the downward trend will stabilize next year, and the economy will shift from one based on exports and fixed investment to a service-oriented one buttressed by innovation and public consumption. China must address problems in its manufacturing sector which alone employs millions of people, mostly uneducated migrants from rural regions.

Automation poses risks

Surveys indicate that more than any other country the growth of robotics in the Chinese workplace is threatening social stability. Automation is a key to China’s manufacturing future, but it will also force many workers to find alternative employment.

Chinese wages are equal to or in some cases higher than those in Vietnam or other countries in Southeast Asia and the developing world. Even though China has better infrastructure and technology and more than 30 years of experience in manufacturing, problems emerge in the unskilled job sector.

Jobs that require low skills and fixed or rote work could be shifted from China to countries such as Vietnam, Cambodia, Laos. In the West, developed countries like Germany and the US use automation which produces high-quality products at lower prices at higher productivity.

Unemployment issues

Many low-skilled workers in China have been laid off since 2000, and those who still work often go on strike, a tactic that has surged during the last decade.

The Chinese government sees automation as a solution; to such an extent that it forms an important part of the 13th five-year plan issued last year. Automation is still in an embryonic state in China, but it seems to be the best solution, if only to avoid falling behind other countries such as the US.

The Chinese government will be forced to retrain and re-employ huge numbers of low-skilled workers. The country’s urbanization program and probable revision of land-ownership rights will likely see many people made jobless and without a home to return to. Private entrepreneurship — provided the government sets up a good fiscal stimulus plan — may help jobless rural migrants by boosting the use of small-scale and cheap automation systems.


Big data revolution

Chinese innovation in sectors such as agriculture, livestock management, and environmental protection — affecting everyone from a Guangzhou farmer to a high-profile engineer — use so-called Big Data. A report in the MIT Technology Review last year discussed the impact of Big Data in boosting productivity and quality. Technology based on Big Data might find fertile ground in China where there is keen interest in using new technologies, provided they are efficient. Big Data, used by popular payment technologies such as 支付宝 Zhifubao and 微信付宝 Weixin Fubao, could lead the way throughout China, fostering development, employment opportunities and prosperity.

Alberto Sperindio

Alberto Sperindio holds an MSc in international business from the University of Nottingham Ningbo, China, as well as a master's degree in Oriental languages and civilizations from the University of Naples L’Orientale. He works in Shanghai as an overseas operations specialist in a tech startup and is founder of EggTECH Daily Briefing.