Hacker News Reader

Comment by sixtypoundhound | Hacker News Reader

From a social perspective, isn't this counter productive? China has a ton of people they need to transition from rural economies into urban employement - building robot factories does nothing to address this issue, which is a big deal in a country with compulsory military service (youth unemployment -> civil unrest).

For a competitive perspective, if the labor component is being automated - why should it be cheaper to run a robot factory in China vs. the US? Sounds like you a difference in legal climate...that need to be evened up.

View on HN

No, China is running into a labor shortage. 18-year-olds are getting relatively thin on the ground, for both demographic reasons (one child was ~25 years ago), and because immigration from rural to urban areas has undergone an inflection. Factory workers in a good area can thus get very high (by Chinese standards) wages. Food prices are also going up. They won't admit that inflation is out of control, but it is. Factories are moving inland, or to Vietnam or India. China is looking at Africa, in the long term.

In some cases, work is going back to the US - US workers have higher productivity, the company can sort out quality issues much faster (waiting for a ship to take your whole order to the States, then realizing there's a problem would be expensive), communication is easier, IP doesn't get stolen, and so on.

Also, the cost of living (especially accommodation) is crazy-expensive (by Chinese standards) in the big coastal cities.

China needs to get high-tech before it gets old, and there's already a few grey hairs showing.

Not until you see the whole picture.

In the past few years, Pearl River Delta area (around Shenzhen, where Foxconn and the other sweat factories are located) has been experiencing continuous shortage of experienced cheap labor. Other areas like the Yangtze River Delta (around Shanghai) are offering higher wages.

The supply of cheap labor in China is not unlimited. The vast majority of young generation in rural parts of China has already been lured into cities to work. The remaining population in many villages are children and old people, which no body wants them to come.

Simply put, China (and the rest of the world) could not sustain the cheap labor cost anymore. Foxconn is forced to use robots to reduce its reliance on human. Simple robots aren't expensive anyway. Going all robots is expensive, but not robots + human. Robots can perform routine tasks while leaving more challenging work to human. Win-win.

By the way, China no longer relies on compulsory military service. Most of my friends (me included) have never served in the army. Volunteers and paid soldiers are the majority now.

One anecdote vs another, my cousin is currently serving compulsory military service.

I said “China no longer _relies_ on compulsory military service”, not “China no longer _has_ compulsory military service”. It is still there, but it compulsorily drafts significantly less people since 1998. So effectively, we no longer have to worry about this anymore.

Nevertheless, the army, just like Foxconn, needs some cheap “labor” to do boring work anyway. Not sure how your cousin got drafted. I hope he does well there. Best wishes.

For a competitive perspective, if the labor component is being automated - why should it be cheaper to run a robot factory in China vs. the US?

Only some of the labor is being automated. Humans + robots in China is still cheaper than humans + robots in the US.

I don't see how it is counter productive. China, like most poor countries, needs more wealth. The humans who are replaced by robots are now free to create wealth in other ways (e.g., building stuff Chinese people need rather than stuff westerners don't need). Sounds like a win.

Assuming equally sophisticated robots. But the money you spend on your robots is proportional to alternate cost of humans doing it. It makes sense for a US company to invest more than a Chinese one.

I mean, this is a pattern that repeats throughout history. The Athenians could have had steam engines. But since they had slaves already, it was never worth them developing the steam engine beyond a toy for philosophers.

I think eventually this might force China (and probably other countries) to re-evaluate what "work" means and if income should be tied as directly to it, as it is now.

In any case taking a step backwards and not using robots or even replacing them with humans will be almost impossible once the price has adapted to the new conditions.

> why should it be cheaper to run a robot factory in China vs. the US?

Among other reasons, there's: 1) cheap utility inputs, mainly hydro/coal electricity and water; 2) laxer environmental standards; and 3) remaining labor needs are still cheaper.

Also there is a lot more general infrastructure and expertise in manufacturing a lot of product types there. And no doubt the factory making the robots will be down the road, improving the ecosystem. Generally you do not do every process in house so you need component suppliers and specialist process makers nearby.

Reindustrialising the US and Europe would be hard.

You still need to deal with your suppliers. If the majority of your suppliers are based in China/Asian (for example, nearly all the chip and screen fabs), the shorter supply chain may be a benefit.

Also, keep in mind that Foxconn is actually a Taiwanese company. I think that frankly they don't really care about the social development of the Chinese lower and middle class outside of long term impact on sales.

They are not going to replace all of the workers with robots -- only those who do the simplest possible labor.

Think of it as changing a carpenters manual tools with power tools rather than getting a robot carpenter.

You can build and maintain robots and factories cheaper in China.

"they need to transition from rural economies into urban employement"

why?

Reply on news.ycombinator.com