The Coming Wage Crisis in Chinese Manufacturing

With a booming industrial economy in cities like Shenzhen, Wuhan, and Shanghai, and with a migrant labor force of 300 million (in other words, the entire population of the United States), China is facing a demand for higher working wages that has never been seen in the course of human history. Tens of millions of blue-collar workers are demanding higher pay – as is only natural – and there is little that multinational corporations can do to entirely curb or stonewall their demands – unless by means of automation.

Already we’re beginning to see a 2.0 model for Chinese manufacturing that reduces overreliance on human capital in favor of automated production machinery and materials handling systems. When we at Liftomatic first visited Chinese factories back in the olden days of the 1990s, we came upon staggering levels of redundancy for Chinese workers. I remember personally one factory we toured, where we encountered a worker whose sole job was to keep the key to the fax machine. In America, that employee would have been laughed right off the factory floors!

While that level of egregious waste has long since been trimmed in Chinese factories, automation and roboticization are relatively recent developments. With automated production processes allowing for greater production levels that in turn use less overall expenditure of long-term capital (the initial expense of buying the machinery eventually offsets the costs of maintaining an increasingly demanding workforce), Chinese and multinational factory owners are discovering what we in American manufacturing have long-since known: that automation and optimization pay off handsomely in terms of ROI.

At Liftomatic, we’re an essential part of that paradigm shift away from manual labor in Chinese assembly plants. Our advanced drum barrel and materials handling equipment is a fundamental part of saving money for Western companies that would otherwise have to pack up shop in China and search for greener pastures. If you’re an American, Canadian, or European company currently involved in China, it’s something you should seriously look into. Quality automation is an absolute necessity for business survival in places like the Pearl River Delta, especially in this coming generation of industrial activity. Just a bit of friendly wisdom from the folks here at Chicago’s (and Shanghai’s) own Liftomatic.

Leave a Reply