Posted on 05/25/2016 1:11:52 PM PDT by Swordmaker
Kunshan, in Jiangsu province, undergoes makeover as 600 companies look to trim their headcount
The manufacturing hub for the electronics industry, Kunshan, in Jiangsu province, is seeking a drastic reduction in labour costs as it undergoes a makeover after an industrial explosion killed 146 people in 2014.
The county, one-seventh the size of neighbouring Shanghai and the mainland’s first county to achieve US$4,000 per capita income, was adjudged the best county for its economic performance by Forbes for seven years in a row.
However, the blaze, blamed on poor safety standards and haphazard industrialisation, dented Kunshan’s pride.
More than a year on, the county, which attracts much of its investment from Taiwan, is trying to reinvent its growth strategy. It is accelerating growth by replacing humans with robots and encouraging start-ups.
Kunshan explosion factory ignored several danger warnings, says regulator
Thirty-five Taiwanese companies, including Apple’s supplier Foxconn, spent a total of 4 billion yuan (HK$4.74 billion) on artificial intelligence last year, according to the Kunshan government’s publicity department.
“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” said the department’s head Xu Yulian.
“More companies are likely to follow suit.”
As many as 600 major companies in Kunshan have similar plans, according to a government survey.
The job cuts do not augur well for Kunshan, which had a population of more than 2.5 million at the end of 2014, two-thirds of whom were migrant workers.
Industrial accidents in China continue to exact high toll in lives and property
Factories and other buildings cover about 46 per cent of the land – a figure which is far higher than the cap set by the central government.
The local government, which was reshuffled after the blast, has promised to maintain zero growth in land development and decrease its population by 2020.
Kunshan’s latest growth figure is far from impressive.
The county grew by less than 3 per cent in 2014 and 2015 amid the central leadership’s bid to restructure the world’s second largest economy into a greener, more tech-intensive one.
Xu Xujiong, head of a local firm, Huaneng Welding, reflected on the hard times faced by the local units owing to the transition.
“Our profits dipped sharply over the past year,” he said.
The factory output, too, has declined.
At its peak, Kunshan manufactured 120 million laptops a year, but output had fallen to only 51 million because of falling demand, said local officials.
Smartphone manufacturing, however, is trying to bridge the gap – about 20 million units were made last year.
Kunshan is home to about 4,800 Taiwanese companies, which contribute over 60 per cent of its GDP, and the county is encouraging more people from across the strait to start businesses there to boost its economy.
He Rongrong, the director of Taiwan Investment Service Office, which is housed in Kunshan’s hi-tech industrial zone, said that the first factory built by a Taiwanese company in Kunshan was in 1989 and since then entrepreneurship had grown in leaps and bounds.
A business incubating centre for young people both from the mainland and Taiwan was established last July to encourage more entrepreneurs, with 11 projects – 60 per cent of which were from the island – approved so far.
Something from Deus Ex Human Revolution, the future is here.
Someone should ask the Communists in charge what they plan to do with a billion workers when their robots are manning the factories.
They’re sending their surplus population to America.
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China must create 25 million jobs per year to avoid their people acting like BLM.
The few times that I have been over to China, Ningbo, Beijing, Chengdu, all of the people that are in management tell me that it is next to impossible to fire someone.
I wonder if the government has made some new “employment” rules.
And which one of the government officials is getting some cash for the robots.
Exactly. We have to have the industrial processes to be able to automate them. We are getting behind in many ways.
Hurry Trump. We need you.
DannyTN wrote: “We have to have the industrial processes to be able to automate them. We are getting behind in many ways.”
Should we put a tariff on imported Chinese robots to protect American jobs?
start looking forb a lot of violence world wide as robotic automation spreads. we are looking at a world wide melt down with in society. I have no answers on how to handle this. expect the calls for socialism to get louder as capitalism fails for a good portion of the uneducated and poor. I am not saying that socialism is a workable system. I am just saying that as we need less and less people to produce in society we will have a period of instability as we adjust to what ever the new normal is.
We should tariff everything.
We will be manufacturing our own robots soon enough.
Research ‘steam powered textile looms-—Luddite’.
DannyTN wrote: “We should tariff everything. We will be manufacturing our own robots soon enough.”
If we should place a tariff (tax) on imported Chinese robots to protect American jobs, should we also tax American made robots to protect American jobs?
No, not specifically to protect jobs. However the potential for labor dislocations due to robots is really huge.
We are going to have to figure out how to deal with that. Imagine an extreme scenario where 80 to 90% of our workforce is put out of work. And the free market is just not creating enough new jobs quick enough. How do you feed your population in that scenario?
Presumably we'd be producing more than ever. So it's not an issue of having enough goods to go around. But how do you expand the safety nets? How do you tax products or robots or income or whatever enough to meet the basic needs of our population and still maintain free market incentives?
Raising the cost of employing robots is one way to slow the market adoption of robots to give the labor market time to adjust. But I wouldn't recommend that as it's no better than make work. If the robot is more productive, I say let the robot do the work and figure out how to feed the displaced person.
Universal income is one of the ideas that have been floated around. But you still have to figure out how to pay for that, because your income taxes just took a major hit. And universal income would certainly rob people of some of the incentive to work.
DannyTN wrote: “No, not specifically to protect jobs. However the potential for labor dislocations due to robots is really huge.”
Your points are well taken. Those that think tariffs to protect American jobs are only looking at a very small portion of the problem. What about productivity increases? Suppose there is a new machine that reduces the number of workers to produce a product. Should we tax that machine to protect jobs?
Imports from low wage countries are just another former of productivity increases. Lower cost products.
Actually, in the late 40’s, the government funded research into tomato picking machinery. The research was successful and 40,000 tomato pickers lost their jobs which lead to a prohibition on federal research that could eliminate jobs.
Worked on a French/German/US program in the seventies. The US proposed numerous design changes to improve productivity and reduce the man-hours required to produce the product. All were disapproved. Ultimately, the French/Germans told us that all changes like those would be disapproved. They were given a quota persons to employ. If they improved the production line, they would have to find other jobs for these people. Meeting their employment quotas was far more important than reducing costs.
Are we headed that direction?
They will likely do what totalitarians have often done with "worthless mouths" -- kill them.
Productivity improvements are those that result in cheaper products by reducing the cost, labor or materials, necessary to make a product. You can reduce the cost of labor by employing cheaper labor. Imports from lower wage countries are just another way of reducing labor costs.
If you want to argue that we need to protect high cost American jobs from overseas sources of cheaper labor, then, to be consistent, you also need to argue that we need to protect high cost American jobs from production efficiency.
Labor unions recognize that. Why else would they fight/strike over improvements to production that reduce labor hours?
No, there is a big difference between foreign labor and foreign made goods, and production efficiency. Buying stuff from overseas even if it’s cheaper is not a production efficiency. Buying foreign made stuff is 0 productivity. It’s a drop in productivity than when we made the stuff here.
With tariffs, you are protecting your markets and wealth creation ability against economic warfare.
When protecting workers against machines, you are advocating lowering productivity to make jobs. There is no difference between what you are advocating in the second than letting robots do the work and having a make-work program like WEPA as an excuse to give them a paycheck. Better off to give them a vacation until the market can improvise and make jobs for them.
Buying foreign goods and productivity enhancements are not the same and don’t call for the same kinds of protection.
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