China's Factory Robots Advance, and the Workers They Replace Have Nowhere to Go

In Kunshan, a region near Shanghai that grew wealthy on electronics manufacturing, out-of-work factory workers now gather in a park because there is little else for them to do, The New York Times reported. As Chinese plants install robots and automated lines, the assembly jobs that drew migrants from the countryside for a generation are disappearing, and the displaced workers say employers no longer need them.

The trend is deliberate industrial policy. Beijing has pushed automation and advanced manufacturing to keep China competitive as wages rise and as it builds a domestic technology base less dependent on foreign suppliers. The same drive that produces reusable rockets and domestically made chips also produces factories that run with fewer people.

The social cost is the counterweight to the productivity gain. Automation raises output per worker and holds down manufacturing costs, which helps China defend export share, but it removes the wage income that supported domestic consumption. A manufacturing model that needs fewer workers is efficient for producers and difficult for a consumer economy the government wants to strengthen.