The Daily Telegraph recently published a report on a visit by a number of senior executives, including Ford CEO Jim Farley, to China. Farley was left extremely impressed (in fact “humbled”) by the quality of some of the cars that Chinese firms were producing.
More interesting, at least in my view, was what some of the visitors had to say about the level of automation in Chinese factories. It should be assumed, of course, they were only shown the best of the best. Nevertheless, what was on display added to the evidence that talk of an inevitable demographic “crisis” in China has, as it has elsewhere, been exaggerated.
Andrew Forrest, the billionaire founder and chairman of Fortescue Metals Group, an Australian iron ore producer, talked about factories [in China] “where you’ll basically be alongside a big conveyor and the machines come out of the floor and begin to assemble parts. . . . And you’re walking alongside this conveyor, and after about 800, 900 meters, a truck drives out. There are no people — everything is robotic.”
The visitors saw “dark factories,” factories where there are so few people present that there is not much need for lighting. One CEO recalled that “the process was so heavily automated that there were no workers on the manufacturing side, just a small number who were there to ensure the plant was working.”
According to the International Federation of Robotics (IFR), the number of industrial robots deployed in China between 2014-24 increased more than ten-fold, from 189,000 to 2 million. The Daily Telegraph reports that in 2024, China added 297,000 robots, more than ten times the figure in Germany and compared with 34,000 in the U.S. Assuming the Chinese numbers are reasonably accurate (admittedly not always a safe assumption where China is concerned), that discrepancy cannot solely be explained by the country’s larger population. China now has 567 robots for every 10,000 manufacturing workers. That compares with 449 in Germany, 307 in the U.S., and 104 in the U.K.
Britain’s numbers stand out, and not in a good way. It installed 2,500 robots in 2024, a number 35 percent lower than the year before. This reflects both the deindustrialization that net zero is doing so much to speed up and the structure of an economy where, thanks to mass immigration, wages are low (they have stagnated since the financial crisis) and, as a result, there is little incentive to invest in automation to increase productivity.
Beijing has grasped that higher levels of automation and the improved productivity that goes with it will help China manage the transition to a declining, aging population. Another plus is that it may face a reduced risk that mass automation will leave it, if only temporarily, with a structural labor surplus. Other countries may not be so fortunate.
And so, via the Daily Telegraph:
As part of its so-called Made in China program, local authorities have offered large tax breaks that reimburse firms for a fifth of their spending on industrial robots. This is under a policy known as “jiqi huanren” — which translates to “replacing humans with machines.”
The Beijing regime has a way with words.
For its part, the U.K. is looking at fairly strong population growth in the next decade or so driven overwhelmingly by immigration. If this proves to be the case (and even allowing for the population’s aging), there is a strong possibility that British wages and productivity will remain low, and its international competitiveness will fall still further. This will set the stage for a truly toxic social and economic mess not so many years from now. A change of course is long overdue.