The Telegraph reveals that Western business leaders are feeling greatly unsettled by operations in China. The nation’s “dark factories” are so automated that these assembly lines don’t even require lighting.
Ford’s CEO, Jim Farley, described his experience, saying: “This is the most humbling thing I’ve ever seen.” He elaborated in a London publication, noting, “We are in global competition with China, but it’s not just competition… if we lose this, we have no future at Ford.”
The impact of this competitive shift is particularly striking in the passenger vehicle sector. Mr. Farley highlighted that China is far ahead in the new energy vehicle space, with a staggering 62% of the world’s electric vehicles—both battery-only and hybrid—being produced there last month.
This rise in China’s manufacturing capability can largely be attributed to automation. Back in 2014, the country had around 189,000 industrial robots. Fast forward to last year, and that number skyrocketed to over 2 million.
In contrast, the U.S. had just 394,000 robots in operation by the end of last year, with only about 34,000 more added in 2024.
While China’s automation is a significant asset, it also addresses a critical challenge: a looming demographic crisis.
As per the latest government data, China’s population was 1.41 billion at the close of the previous year. Yi Fuxian from the University of Wisconsin-Madison projects that by 2100, the population could dwindle to 330 million—his prediction seems plausible given the downward trend of population estimates over recent years.
Mr. Yi’s calculations suggest if China stabilizes its total fertility rate (the average number of children born per woman) at 0.8, it could still lead to a troubling decline in population. As it stands, China’s total fertility rate was reported at 1.0 in 2023, a figure unchanged from the prior year. Countries typically need a rate of 2.1 for population stability.
Interestingly, Yi also raises the possibility that official population figures might be overstated, and if the fertility rate were to drop to 0.7, the population could sink even lower by 2100.
It’s worth noting that China’s working-age population peaked in 2011 and is expected to decline even more sharply than the overall population.
Wang Feng from the University of California, Irvine emphasizes, “China has embarked on a demographic path of no return,” warning that if not addressed, this trap could lead to severe consequences.
Efforts to boost the birth rate have seen the government relaxing its former one-child policy, first introducing a two-child policy in 2016, then shifting to a three-child policy in 2021. Yet despite these changes, the population hit its peak in 2021 and has been on the decline since.
As Nicholas Eberstadt from the American Enterprise Institute famously noted, “No country has ever succeeded in increasing birth rates through government policy.” There’s a certain difficulty in using state power to boost birth rates, a stark contrast to the ease of enforcing restrictions.
In summary, as China struggles with stagnant birth rates, the reliance on robots is increasing. Liang Whitten from Bismarck Analysis remarked that China’s manufacturing industry, typically reliant on human labor, is shifting toward automation—not driven by profit expectations, but rather as a necessary adjustment to cope with the declining population and to gain an edge.
Because of this surge in automation, China is gaining a competitive foothold, which may push other nations to similarly adopt robotic systems. However, if that happens, the advantage China enjoys from cheaper labor may diminish.
Automation is leveling the global labor cost playing field, which means firms that manufacture closer to their customers could eventually dominate the market.
At the same time, the rise of robots introduces its own set of issues. The deployment of each new robot often translates to at least one fewer job for people—a troubling prospect given China’s existing unemployment issues. Recent reports indicated that the urban unemployment rate was at 5.3% in August, escalating to 18.9% among those aged 16 to 24.
Although there are concerns about the accuracy of these figures, the reality remains that China requires a workforce, and the rapid increase in automation jeopardizes this goal. Many young individuals today seem to face a bleak outlook.
This uncertainty has given rise to a phenomenon where young people are disengaging from societal expectations—some are retreating to rural areas or “lying down,” while others are losing faith in their prospects altogether. A troubling number have even labeled themselves as their generation’s “last.”
The Chinese government maintains that a declining population isn’t necessarily an impediment to economic growth. Yet, relying on robots to replace human labor certainly isn’t a sustainable answer for long-term demographic challenges.
