Global Observer

As wages rise, China prepares for rise of the robots

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SHANGHAI - China is set to become the world's biggest market for industrial robots next year, and robot manufacturers are rushing to meet growing Chinese demand.

ABB's Shanghai factory is shipping increasing numbers of robots to factories in China.

SHANGHAI -- In a factory outside Shanghai, workers run tests on a new batch of bright-orange robotic arms, set for shipping to Europe. Its mid-afternoon by the time daytime orders from Norway or Sweeden reach China, and the factory, owned by Swiss robot manufacturer ABB, often operates late into the night. But recently ABB staff have been leaving work little earlier, as the company sells increasing numbers of its robot-arms to Chinese-based manufacturers. “The market has shifted,” Lars Rotseth, the factory's manager, said.

ABB's sales to Chinese firms were up more than 20 percent last year, reflecting a rapid rise in demand for robots in China, which will overtake Japan as the world’s largest robot market by 2013, according to the International Federation of Robotics.

China’s automobile and electronics manufacturers have driven most of the recent growth, according to Gu Chunyuan, head of ABB China’s robotics division. The Chinese market for automotive robots, used for welding and spray painting "really started to take off in the 2000s,” he said.

Chinese emanufacturers are turning to robot labor for tasks such as laser welding, according to Gu. “If you open up your mobile phone and look at the welded parts inside, more of that is being done by robots,” he said.

Robots are finding some unusual applications in China, like this pair of wind-turbine painters.

Rising labor costs in China, where the average minimum wage increased by more than 20 percent last year, has driven Chinese manufacturers to consider employing more robots. “Salary inflation is the driving force behind robot demand in China,” Michel Demare, ABB’s chief financial officer, told media earlier this year.

Chinese factory owners have other reasons to favor automated workers. Most Chinese factories are idle when workers return home to their families during Chinese New Year, an occasion robots generally treat with indifference. “It’s about maintaining stability of production” Gu said. New recruits to Chinese factories often quit within weeks, driving up training costs. “It’s difficult to maintain the quality of the human workforce,” he said.

Foreign robot manufacturers, which dominate China’s industrial robot market, are altering their strategies to meet growing Chinese demand. Kuka, Europe’s largest industrial robot firm, has announced plans build a regional hub in China to develop sales. ABBs Shanghai-based team designed the small-scale “Dragon” robot specifically for use in Chinese consumer electronics factories. “The design team is 99 percent Chinese-educated,” Gu said.

ABB's "Dragon" robot-arm was designed specifically for use in China.

Foxconn, which manufacturers Apple products in China, has pledged to install one million robots at its plants by 2013, equalling the firm’s current total number of human workers. “They are a visionary company,” Gu said. “[Foxconn] know there will be a labour shortage in China in a few years,” he said. “You can call it insurance against the future.”

Future growth in China’s robot market may come from some unusual sectors. China's renewable energy firms use robots to paint wind turbine blades. A Chinese government food-safety drive is pushing food and beverage manufacturers to use robot arms for packaging foodstuffs, Gu said.

China’s historic reliance on human-labour for manufacturing mean robot manufacturers see plenty of room for growth. “Penetration of robots in [Chinese factories] is extremely low,” Gu said.  China’s “robot density,” a measure of the total number of robots in use relative to manufacturing workers, stands at less than one third of Japan’s and less than half of Germany’s, according to the World Robotics Foundation. “Chinese companies are looking at the long term,” Gu said “they want to insure the stability of their workforce.”

Pictures: ABB.

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Tom Hancock

Correspondent (Beijing)

Correspondent, Beijing Tom Hancock has written for Geographical Magazine, The Asia Society, China Dialogue and AsianCorrespondent.com. He previously worked at CNN's Beijing bureau. He holds a degree from the University of Cambridge and studied at The Renmin University of China. He is based in Beijing, China. Follow him on Twitter. Disclosure