Pandemics tend to accelerate the pace of automation. This time is no different. If anything, the pace of automation could be even swifter, given the severity of Covid-19. Global orders for Japanese industrial robots surged to a record high in Q1.
Labour shortages are already acute in China, notably in the manufacturing sector. Companies will either have to relocate or automate.
China still lags Japan in robotics, but domestic companies are gaining a more reputable name. In y/y, year-to-date terms, Chinese industrial production of robots jumped 79.2% last month.
China’s demographic challenges need to be put into perspective. What matters for the economy and living standards is productivity and real output per capita, less so the headline real GDP growth rate. Automation will be the critical factor helping China to navigate any headwinds that arise from a flatlining population.
