The Telegraph reports that China is “terrifying” Western business executives. Chinese “dark factories” are so thoroughly automated that there is no need for lights on the assembly floor.
“It’s the most humbling thing I’ve ever seen,” Ford Motor Company CEO Jim Farley told the London paper. “We are in a global competition with China, and it’s not just [electric vehicles]. And if we lose this, we do not have a future at Ford.”
China’s assault on global manufacturing is most evident in the passenger car sector. As Farley made clear, China has opened up a big lead on new energy vehicles. An astounding 62 percent of the world’s EVs delivered last month — battery-only and hybrid models — were made in that country.
China can thank its robots for this. As the Telegraph reported, there were only 189,000 industrial robots in China in 2014. As of last year, that number had hit 2,027,000.
In the U.S., by comparison, there were only 394,000 robots installed at the end of last year. A little more than 34,000 were added in 2024.
China’s extreme automation is a strength, but it is also a response to the country’s most fundamental weakness: its impending demographic collapse.
Beijing reported the country’s population was 1.41 billion at the end of last year. Yi Fuxian of the University of Wisconsin-Madison predicts that it will drop to 330 million by 2100. Yi’s forecast is at the low end of the range, but the estimates of others have been falling over time, making his figure plausible.
Yi’s estimate assumes that China will be able to stabilize its total fertility rate — generally, the average number of children born to each woman over her lifetime — at 0.8. China’s total fertility rate in 2023 was 1.0 and remained the same last year. A country generally needs a total fertility rate of 2.1 to maintain a stable population.
Yi, however — who also believes China’s official population numbers are already inflated — believes that China’s total fertility rate could fall as low as 0.7, meaning it could have even fewer than 330 million people by 2100.
China’s working age population, the 15-59 age cohort, peaked in 2011 and probably will fall faster than the population as a whole.
“China has embarked on a road of demographic no-return,” writes Wang Feng of the University of California, Irvine.
“Left unaddressed,” Yi states, “China’s demographic trap could precipitate a civilizational collapse.”
China’s central government has tried a number of different tactics to increase fertility — for instance, relaxing its draconian one-child policy and adopting a two-child policy in 2016. When that didn’t work, the government went to a three-child policy in 2021. Despite the liberalization, the country’s population peaked in 2021 and has been falling ever since.
As Wang points out, “No country has successfully raised fertility with government policies.” Nicholas Eberstadt of the American Enterprise Institute told me: “It is possible to use bayonets and police power to force birth rates down against the will of a people; it is very much more difficult to use state force to push birth rates up,”
So China, having failed to raise fertility, now needs lots of robots. China’s manufacturing sector has been “quite labor-intensive,” Rian Whitton of Bismarck Analysis told the Telegraph. “So in a preemptive fashion, they want to automate it as much as possible, not because they expect they’ll be able to get higher margins — that is usually the idea in the West — but to compensate for this population decline and to get a competitive advantage.”
China’s automation drive gives it a competitive advantage for now, as Ford’s Farley suggests, but it is also pushing other countries to employ robots, too. And as all countries install the devices, China’s labor-cost advantage, which powered the country’s growth for decades, will disappear.
Automation is leveling labor costs worldwide, which ultimately means companies that manufacture closer to the point of ultimate consumption will tend to dominate markets.
In the meantime, China’s robots pose another problem. Each robot installed means at least one job fewer for humans, and the country already has an unemployment problem. Beijing reports that the overall urban unemployment rate in August was 5.3 percent. The rate for the 16-to-24 age group that month was 18.9 percent.
China has traditionally underreported these numbers. But whether they are accurate or not, China needs to put people to work, and the fast installation of robots undermines this crucial task. The country now has a large number of young people with no prospects.
No-prospect young are “lying flat” — dropping out of society — and others are “retiring,” leaving cities to farm plots in the countryside. Both trends add volatility to an already unhappy population. Some younger Chinese even say they are part of their country’s “last generation.”
Beijing believes that fewer people will not necessarily derail economic growth. But robots are no solution to a collapsing demography — at least not in the long term.
Gordon G. Chang is the author of “Plan Red: China’s Project to Destroy America” and “The Coming Collapse of China.”
