Foreign media said that in China’s third-largest mobile phone screen manufacturer Rapida, hundreds of machines are operating behind a long fence. Rows of glass appeared on these large cubes filled with indicator lights and wires. The cut glass parts are processed for 8 hours before making them meet the standards of different brands of smartphones produced in China.
According to a report by the French Le Monde on September 2, there are 900 machines in this factory, and one machine can produce 400 mobile phone screens in 8 hours. In the past, each machine required an employee. Since the installation of particularly advanced robots, a skilled worker can now supervise 18 machines. As a result, fewer than a hundred people are required to cut the screen of the mobile phone and ensure handling and maintenance. Ruibida executive Li Jingjun said with certainty that the number of people employed is 1/10 of that of three years ago. This factory in Dongguan has achieved up to 15% of funding from Guangdong Province for achieving automation ahead of schedule. This assistance falls within the scope of the “machine substitution” program.
According to the report, in 2014, China called for a “robot revolution”, which can not only upgrade the country’s industry, but also cope with the already revealed labor shortage. Because of the one-child policy that was abandoned at the end of 2015, the working-age population in China began to decrease in 2010. Li Jingjun also proudly said, “We have produced in the 4.0 factory, that is, there is no worker.”
TCL TV manufacturers may already have one of these “black factories”. The reason for this nickname is because there are no workers and there is no need to turn on the lights anymore.
Rapida and its factory where only a few employees “hang out” among hundreds of machines symbolize Dongguan’s successful economic transition. Some other large companies in the Chinese electronics industry (such as Huawei, Oppo, and Vivo smartphone manufacturers, which rank third, fourth, and fifth in global smartphone sales, respectively) are also located in Dongguan.
In any case, the city is mainly known for its low-end product factories, which developed in the shadow of the metropolis Shenzhen, which is where the headquarters of large companies are located. Dongguan has 8 million residents, most of whom are migrant workers living in dormitories. However, the average wage in China has tripled in the past 10 years, making Dongguan’s economic model based on a large number of cheap labor a problem. Many companies have moved to inland provinces or moved their factories to other countries in Southeast Asia such as Vietnam or Bangladesh.
It is difficult for Dongguan to revive itself from such a new situation. In the Hengli New Industrial Park, half an hour away from the city center, overgrown weeds approach the highway. Visitors are greeted by some “rental industrial plants.”
Xinda Company is a toy company that produced dolls for the London Olympic Games mascot in 2012, with a maximum of 10,000 workers. When it closed in May 2016, it still had thousands of employees. They all lost their jobs and were owed months of wages and social security.
One afternoon this summer, the streets around Xinda were empty. Several workers from a steel bar factory squatted there to play cards in the evening. Li Yang, in his 40s from Anhui, said, “The factory is empty. We still have jobs, but I don’t know how long it will last.”
Not far away, the owner of a grocery store next to the workers’ house missed the good old days. She sighed and said, “In the past, I was always busy. But now, the dormitories are almost empty. The factory is closed and the migrant workers are all going home.”
According to reports, in order to prevent the outflow of enterprises, Guangdong Province, which is responsible for a quarter of China’s exports, announced in February that it would freeze the minimum wage for two years. However, this measure may accelerate the country’s fall into the “middle income” trap that the Chinese authorities are trying to avoid. What does this mean? That is to say, after some economies have experienced a high-growth stage, their growth has stabilized at a level that is not enough to be expected to catch up with developed countries.
According to the report, in order to get out of trouble, China wants to increase labor productivity and support innovation. The authorities did not hesitate to invest large sums of money to help companies embark on this transition.
According to data from the Dongguan Municipal Government cited by Bloomberg News, the city replaced 43,684 workers with robots under the framework of the Guangdong Modernization Plan in 2015, allowing related companies to save 10% of their costs. The same method can be tried to promote innovation. For example, Dongguan provides funds for dozens of “innovation bases”, “development zones” and other emerging enterprises. In these parks, there are hedgerows and bicycle lanes next to the newly paved asphalt roads. In Songshan Lake High-tech Industrial Development Zone, most pedestrians are around 30 years old, and they will wear T-shirts and drink coffee to work. Behind all appearances, the high-rise buildings funded by the city government appear very quiet.
In downtown Dongguan, a private project made the local media proud, because Yang Gongming bought an old textile workshop to transform it into a world of emerging companies. The workshops have been transformed into small rooms and furnished with furniture for rent. The monthly rent is 1,000 yuan. Yang Gongming explained, “The size of the room is completely suitable for small businesses that settle here. When some large factories are closed, most people leave, but there are some talented people who still want to launch their own plans.”
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