China’s factories must be ‘armed with automation’, as coronavirus gives boost to machines in manufacturing

Trade war with US saw many companies relocate outside China, but orders came back last year as Chinese production rapidly rebounded from the coronavirus

Beijing has splashed out huge subsidies on the robotics industry, seeing it as a key element in its push to upgrade the nation’s manufacturing industry

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Xpeng’s factory, in the southern Chinese city of Zhaoqing, touts 100 per cent automation in the installation of car bodies at its welding workshops, with more than 200 robotic arms. Photo: Handout

Published: 6:30pm, 10 Jan 2021Updated: 12:25pm, 11 Jan 2021

The US-China trade war weakened demand for automation on Chinese assembly lines from 2018-19, but a shortage of manpower during the pandemic reversed that trend last year, and analysts expect manufacturers to further embrace robots in 2021.

“The impact of the pandemic on the global industrial supply chain has been a major stimulus, forcing a huge number of orders to return to China,” said Peng Biao, an analyst with Fashionprint.com, which monitors the fashion industry. “Last year was like a roller-coaster ride for Chinese manufacturers, from huge drops in revenue at the beginning of the year to a huge rebound later that year. And now there is a growing shortage of manpower everywhere, so medium- and large-sized companies are now, again, having to step up the replacement [of workers] with robots.

“For example, among garment printers that survived last year, it can be said that 80 per cent of them have plans this year to invest in automation. Otherwise, it will be difficult to survive in the future, because they would be eaten up by the soaring cost of labour and materials.”

After the trade war with the United States kicked off in July 2018, many Chinese companies – particularly in the Pearl River Delta and Yangtze River Delta manufacturing bases – said they were relocating production lines out of China, fearing the knock-on effect of trade tariffs.

But now, with China being the only major economy to fully resume production amid the coronavirus, domestic manufacturers and overseas buyers are re-evaluating the need for relocation and the importance of maintaining production capacity in China, according to Luo Jun, CEO of the International Robotics and Intelligent Equipment Industry Alliance, a government-backed think tank on smart manufacturing.