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August 5, 2015

China is rapidly automating

by omohundro

Many in the U.S. have viewed cheap labor as China’s primary strength. But Chinese labor costs have nearly quadrupled over the past 10 years:

average wage 2004 2014

Recent studies have shown that it’s now just as cheap to manufacture in the U.S. as in China. This is one motivating force behind China’s rapid adoption of automation.

The Changying Precision Technology Company just set up the first unmanned factory in Dongguan city. 60 robots now perform tasks that required 650 workers just a few months ago. The defect rate has dropped by a factor of 5 and productivity has increased by almost a factor of 3. The city of Dongguan plans to complete 1,500 more “Robot replace human” factory transformations by 2016.

The use of robots in Chinese factories has been growing at a 40% annual rate and China is expected to have more manufacturing robots than any other country by 2017. The rapidity of adoption is shown in the following chart:

BN-HR533_robots_G_20150401105819

There are now 420 robot companies in China! The Chinese Deputy Minister of Industry Su Bo has described a robot technology roadmap for China to become a dominant robotics provider by 2020.

Robin Li Yanhong, the CEO of Baidu also wants to make China the world leader in AI. He has proposed the “China Brain” project as a massive state-level initiative “comparable to how the Apollo space programme was undertaken by the United States to land the first humans on the moon in 1969.” Last year Baidu hired Stanford and Google researcher Andrew Ng who says: “Whoever wins artificial intelligence will win the internet in China and around the world. Baidu has the best shot to make it work.”

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