Bloomberg reports that Chinese factories are increasingly turning to automation in order to combat wage pressure and rising wages for the Chinese laborers. They are noting that factories with a higher margins are dealing with the wage increases and investing in automation, while for example textile manufacturers are increasingly looking to move to cheaper locations.
This trend should not be a surprise to western audiences. Factory jobs in high-wage nations have been on the decline for decades, victims of outsourcing, cheap labor and low trade barriers. However, the notable part is the shift from China, which has long been the de-facto low-wage manufacturing segment. Says Bloomberg,
Among those who chose to relocate, inland provinces are not as attractive as Southeast Asian nations such as Cambodia or Vietnam, whose market potential helps lure investors.
The new cheap nations are named, and we’re going from troubled to even more troubled.