Along with rising labour costs, this has helped automation become more prevalent over recent years, says Wu. “Businesses and government now realise that if China’s companies want to survive, they must move to higher-value work to increase profits,” says Wu.Ĭhina’s government has introduced favourable tax rates for companies that adopt automation and banks are encouraged to lend businesses the upfront capital investment that BPA requires. One response is business process automation (BPA).
“That will be a big challenge for China to tackle over the next five to 10 years.” “China is facing a threat to its global manufacturing status,” says Shanghai-based Grant Thornton partner Wu Ying. To business chiefs who want to control their wage bills, some of China’s neighbours are looking increasingly attractive: they are catching up with China on educational levels, but still keeping labour costs down. Recent forecasts suggest China will have more installed manufacturing robots than any other country by 2017. Now China – one of the biggest beneficiaries of that trend – is finding out too.Įncouraged by low wages, Chinese businesses have traditionally depended on manual labour but two factors are affecting supply and pushing up salaries: an ageing population and a natural end to the migration of rural labour to urban areas. North America and Europe have long known what it’s like to lose jobs to low-cost labour markets around the world. Finding new roles for redundant workers will be the next challenge. Rising labour costs and the quest for productivity are driving businesses to automate.
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