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Chinese factories counter rising labor cost with machines

Reporter: Ge Yunfei 丨 CCTV.com

09-12-2016 10:38 BJT

Chinese factories are struggling to keep up with overseas orders due to higher wages. In the southern Chinese province Guangdong, factories are turning to robots and automation to replace people.

This is a factory producing glass lenses for the German brand Carl Zeiss. Seven out of 10 lenses made here will go to Europe.

Four years ago, the manager discovered this Chinese plant had lost its biggest competitive edge -- low cost of labor.

"In 2012, the Zeiss Group informed us that labor in China was twice as expensive as in Mexico and four times that in India. We were very surprised at this huge gap and started to think of how to improve productivity," said Zeng Zhiyong, Carl Zeiss Vision Technologies (Guangzhou) Ltd..

The factory introduced new automatic machines and techniques called “free form” to replace humans in manufacturing.

Now, the machines can take care of most of the major steps, from pasting protection films, cutting shapes, polishing glass and packaging.

In 2012, the factory had 440 workers producing 4 million lenses every year. In 2015, the number of workers decreased by 70 people but output increased to 5 million.

"In fact, the productivity improvement neutralized China’s rising labor costs. Now our cost per lens is the lowest of all the Zeiss factories in the world," Zeng said.

Using machines to replace humans is also a trend in factories targeting the domestic market.
Ji Yonghong is the general manager of Rongxin Packaging Corporation, which produces over 600 million cans every year.
That means 1.8 million cans will come out of here every day. Ji told me that the manufacturing process doesn’t use any workers.

"In 2013, we bought a new production line for over 34 million US dollars. We used to have 60 workers in one shift but now we only need 48. And they’re only responsible for quality control and machine maintenance," Ji said.

This new trend also gives workers more responsibility.

"Because the machines are more complicated than before, we need more skilled and better-educated workers. The young workers have to at least graduate from technical schools," said Ji.

While other factories may have difficulties in keeping workers, employees here earn 10-20 percent more than the average. It’s all thanks to the productivity improvement brought by machines.

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