China has another solution to its shrinking population: robots
China has another solution to its shrinking population: robots
China’s population is facing a critical decline, intensifying concerns about a potential economic upheaval in the coming decades. As the workforce shrinks and the number of retirees receiving pensions rises, the nation seeks innovative solutions to sustain its economic momentum.
Despite a series of initiatives aimed at encouraging childbirth – including financial incentives and simplified marriage regulations – the decline persists. Recent data underscores the challenge, revealing that these measures have not yet reversed the trend.
However, a new strategy is emerging: leveraging robotics and automation. Under Xi Jinping’s leadership, China has been advancing its manufacturing automation, aiming to transform the economy into a high-tech self-reliant powerhouse.
“If China continues its current trajectory for the next 20 to 30 years, it will face a significant crisis, driven by the misalignment between its demographic and economic systems,” said Stuart Gietel-Basten.
This shift is critical for maintaining economic stability, as a shrinking population could strain the pension system, elevate healthcare costs, and reduce overall productivity. A demography expert at Hong Kong University of Science and Technology warns that without change, China risks a major crisis due to the growing mismatch between its population and economic structures.
According to Guojun He, an economics professor at the University of Hong Kong, automation could help offset the effects of a smaller workforce. He noted that robots, digitalization, and AI can significantly reduce the economic impact, though not entirely eliminate it, especially in industrial production.
The International Federation of Robotics reports that China is the world’s largest market for industrial robots, housing over half of the globally installed units in 2024. These robots enable factories to produce advanced electric vehicles and solar panels at high volumes and low costs, contributing to a growing trade surplus.
Beijing is also investing heavily in humanoid robots, with over 140 companies developing them under government support. While these humanoids currently serve as demonstrations of technological prowess, some have already been tested in manufacturing and logistics, showcasing their potential to match human productivity in tasks such as handling and inspection.
This initiative aligns with the government’s “Made in China 2025” plan, launched in 2015, which seeks to maintain China’s competitive edge amid rising labor costs and technological evolution. The plan coincides with the end of the long-standing one-child policy, indicating a strategic pivot to address demographic challenges through innovation.
