China is increasingly turning to automation of tasks, as its workforce has been significantly reduced in recent years due to an aging population
Qin Jiahao has been working in the logistics business of Chinese e-commerce giant JD.com for about six years. Now, much of his work has been automated. “In the past, almost all the work was manual. After automation, almost half of the workers’ work is done by machines. It reduces our labor intensity,” Qin told CNBC.
See also: AI/algorithms used to hire and fire employees: Is this a good thing?
“In the past, I was responsible for collecting goods/things and placing them on the shelves… Now, after the goods arrive here, the equipment that allows automation will put the goods in a designated place and then put them on the shelves. This whole process is done automatically“.
Walking around JD.com's 500,000-square-meter logistics park in Dongguan, South China, one sees huge machines that help automate various tasks such as packaging and placing goods on shelves.
This isn't just happening at JD.com. It's indicative of a broader trend in China, which is trying to automate tasks to a large extent. China is one of the world's largest economic powers, but its labor market faces some major challenges, such as an aging population and the demand for higher wages.
“Population aging is a reality… China now faces the challenge of getting older before it gets rich,” said Jonathan Woetzel, a senior partner at McKinsey.
China's working-age population has shrunk by 5 million in the past decade as birth rates have fallen sharply, according to the country's National Bureau of Statistics. The country is still reeling from the effects of a one-child policy, which was introduced in the late 1970s to control the country's rapidly growing population.
Between 1940 and 1980, the country's population doubled, surpassing 1 billion people, according to official figures. Over the next 40 years, that growth slowed to 40%, although the country's population is still far too large.
The problem has to do with age , and especially the age of people who work.
Task automation helps solve these issues
“Automation, of course, is one of those big opportunities,” Woetzel said. According to Woetzel, automation can help increase productivity.
See also: Amazon: Automation has led to more injuries
“In finance, if you looked at the average productivity of a worker in China about 10 years ago, compared to the productivity of a worker in Europe, it was maybe 20%. Now it's closer to 40% or 50%. So it's still lagging behind, but it's improved“.
Driverless cars
However, automation is not only used in factories or warehouses.
China is promoting technologies such as cars driverless, which use artificial intelligence.
The southern Chinese city of Guangzhou has become a major testing hub for autonomous vehicles. A start-up called WeRide is developing technology for driverless cars and buses.
Autonomous vehicles could replace jobs like taxi drivers. Tony Han, CEO of WeRide, sees autonomous cars as a way to solve some of the issues related to an aging population.
"In China, but also in the US, in most ... developed countries, human labor is becoming more and more expensive. People need better pay, they need more prosperity," Han said.
See also: Retail and the pandemic: Wider acceptance of robots
“Think about it, if you want to get a chauffeur, it's very expensive and if you call a taxi it can also be quite expensive. We can find a cost-effective way to provide this kind of transportation service to everyone“;
Job losses
However, increasing automation could also lead to job losses.
Between 2018 and 2030, up to 220 million Chinese workers, or 30% of the workforce, may need to change jobs as the jobs they already do may be done entirely by machines.
“This, of course, is a huge challenge for the employer and for the employee, but also for the government and for society as a whole,” Woetzel said.
Source: CNBC
