Will China Lose Its "Factory Of The World" Status In Ten Years?

Chinese young people's enthusiasm for manufacturing is declining.

Dong Sheng is the boss of Guangzhou Renyi labor dispatch Co., Ltd. In 2006, he just entered the labor agency industry. At that time, enterprises came to select workers, "how many people do you want, how many people are there?". But from the year before last, it became more and more difficult to recruit. Last year, more than 200 people could be recruited in one day. At the end of April this year, the number dropped to about 70.

According to the report, the number of migrant workers in China will be 285.6 million in 2020, a decrease of 5.17 million compared with that in 2019, accounting for 27.3% in the manufacturing sector. In response to the report of the Bureau of statistics, Ma Xinyuan, an economic expert, said: "young people are very sober. They like freedom and don't like the working atmosphere of factories. This situation is not optimistic. By 2022, the status of world factories may not be guaranteed."

Young people advocate freedom, pay more attention to personal life experience, and pay more attention to the quality of life. Compared with the boring, repetitive and simple physical labor in manufacturing factories, young people prefer to take out, express delivery, live broadcast, we media and other new free jobs. The boss of the factory said: "now we don't recruit young people. Even if we do, we will leave after less than a month. When the young people come, we will go and have a look. In the end, none of the 20 people are willing to stay and work."

Japan's Daiwa Securities even predicted that China would lose its status as the "world factory" by 2022 at the latest.

From 2008 to 2018, the average annual growth rate of the number of migrant workers engaged in manufacturing industry in China was - 2.84%, and more young people turned to emerging service industries such as takeout, taxi, express delivery and live broadcasting. Chen Chun (pseudonym) from Liaoning Province, in his early 20s, has just come to Shenzhen to become a fast train driver. In his opinion, the work of driving is free and flexible, which is much easier than being an apprentice in a factory.

Made in China has come to the key point of change, and the history of having a large number of cheap labor has been turned over. On April 28, the Financial Times reported that China's Seventh National Census may result in a total population of less than 1.4 billion. At present, the impending deep aging, the closing of the demographic dividend window, and the rising costs of land, raw materials and marine logistics are pushing Chinese manufacturing enterprises into a new situation.

The international environment is also quite complex. The trend of anti globalization and the epidemic situation of new crown pneumonia have prompted developed countries such as Europe, America and Japan to re-examine the global layout of industrial chain, and have introduced subsidy policies to encourage enterprises to move their manufacturing industry back. China's status as the "world factory" is increasingly challenged by Southeast Asian countries such as Thailand, the Philippines, Vietnam, Indonesia, Laos, Cambodia and Myanmar, and even the South American countries led by Mexico.

At the end of March, data from the Ministry of industry and information technology showed that the proportion of China's manufacturing industry in GDP had dropped from 32.5% in 2006 to about 27% in 2019, and the grim situation should be paid attention to. A number of experts said that the decline in the proportion of manufacturing industry will not only drag down the current economic growth, affect urban employment, but also bring industrial security risks and weaken China's economic risk resistance ability and international competitiveness.

Why can't China keep these labor-intensive factories?

The core factor is the rise of human cost! Data released by the National Bureau of statistics on April 30 showed that in 2020, the average monthly income of migrant workers engaged in manufacturing industry was 4096 yuan, an increase of 138 yuan or 3.5% over the previous year, making it the fastest growing industry. Compared with 2006, the average monthly income of migrant workers in cities was only 966 yuan.

After the Spring Festival this year, a subsidiary of a Zhejiang Electric Co., Ltd. did not recruit any general workers.

In order to catch up with the goods, the administrative staff had to work overtime in the workshop, adding 29 days in March alone. Li Zhixiong, chairman of the board of directors, sighed: "it used to be that many provinces with large population export can't lose now. Now Wenzhou has less and less foreigners. People come out to work for ten or twenty years. When their children start high school and University, they will not come out again. "

Most of the time, it's not the employers who are willing to raise their wages to recruit employees. In Qidong, Jiangsu Province, Zhao Xiao's father runs a small marble processing factory. Zhao Xiao posted an online recruitment post, setting the target age between 30 and 50 years old, with a monthly salary of 7500 yuan. If he has experience, his salary can be raised again. But after more than half a year, there are few suitable ones.

Excessive wage increases in factories will lead to unprofitable difficulties. At the same time, young people's concept of choosing a job is also changing. In recent years, the growth environment of the new generation of young people in China has been greatly improved. Rural children are no longer willing to engage in high-intensity overtime, low welfare, poor working environment, assembly line and screw type ordinary manufacturing work like their parents. Manufacturing is becoming less attractive to young people.

In this case, the advantages of less developed countries in undertaking the transfer of China's manufacturing industry are highlighted.

The year before last, some people in the industry inspected the investment environment of Uzbekistan's manufacturing industry: a Chinese enterprise invested in the local area and enjoyed preferential policies in terms of land, factory buildings and taxes. It dispatched more than 20 engineers and employed a large number of local employees. The monthly salary of each person was about 1000 yuan, and the net profit of one year could reach 2.3 billion yuan.

"They are also very capable. They work overtime every day, no problem." Now Wenzhou's general worker's wage does not mention 6000 yuan, it is difficult to recruit people willing to work. In India, the salary per person is only 600-800 yuan per month. China has no way to compete with Vietnam, India and other countries in the "demographic dividend".

It is worth noting that the manufacturing industry has always been the foundation of China's real economy. 3.27 million manufacturing enterprises across the country have absorbed 105 million jobs, accounting for 27.3% of the total employment, ranking first in all industries. The most competitive industry in China is the manufacturing industry. The decline in the proportion of manufacturing industry will definitely have a great impact on the competitiveness of the whole country. According to international experience, even in the United States, if the proportion of manufacturing industry is too low, there will be a series of risks.

Digital transformation, lean and less human oriented is the way out for manufacturing industry?

Industry experts believe that in order to achieve the labor productivity of manufacturing industry reaching about two-thirds of the level of developed countries, we can not expect population growth, we can only rely on intelligent manufacturing.

To build an unmanned factory and realize industrial automation is the core to solve the employment problem, reduce the industrial production cost and improve the competitiveness with other developing countries; Through intelligent manufacturing to improve the quality control ability and product quality, it can also promote the quality of products, to the same level as European and American countries.

On April 14, the Ministry of industry and information technology issued the "14th five year plan" intelligent manufacturing development plan (Draft), which proposed to build more than 2000 new technology application intelligent scenes, more than 1000 intelligent workshops, and more than 100 benchmark intelligent factories leading the industry development by 2025, focusing on the preliminary realization of intelligent transformation of key industry enterprises; By 2035, manufacturing enterprises above Designated Size will be fully digitized.

Since 2015, China has successively selected more than 200 intelligent manufacturing pilot demonstration projects in nearly 100 industries, and the exploration has achieved initial results. Changhong Intelligent Manufacturing Industrial Park is one of them. This industrial park, with an investment of about 5.5 billion yuan, covers smart display terminals, smart energy and related supporting industries, and introduces industrial robots, machine vision, edge computing and other technologies into the production process. At present, Changhong intelligent production line can reduce human resources by 70%, increase the per capita output efficiency by 65%, and achieve 95% logistics automation rate.

Less humanization is a development direction of intelligent manufacturing, but less humanization is not equal to unmanned. Changhong's ultimate goal of intelligent manufacturing is to meet personalized consumer demand by means of industrialization, and to undertake fragmented orders with flexible production in the era of Internet of things, so as to realize large-scale customized production. The future is promising, but for China's clothing industry and other small and medium-sized enterprises, the realization of intelligent manufacturing has a longer way to go.

"Automation should be gradually pushed in circulation, not in the pursuit of complete high-end automation in a short period of time." Experts suggest that enterprises should transform their digital workshops according to local conditions, invest less in the first year, let employees and management teams adapt first, and start with the increasing labor demand of the workshop every year to solve the staff gap demand. In the second year, after the benefits have been seen, it will be decided as appropriate to maintain the stable production demand and combine man-machine with human to ensure a good promotion of enterprise capital investment and automation equipment application.

The garment industry should not set a unified standard to measure intelligent manufacturing. Enterprises should achieve the best balance at this stage according to their own industry characteristics, business development mode, supply chain, personnel flow and other conditions, and then continuously improve the level of information and data utilization.