Speaking of desolate factories, here’s another twist: China’s rising middle class and aging population has made it difficult for many plants to find the necessary supply of cheap labor. The nation’s economic problems have temporarily eased the migration away from factory work, but automation seems the only answer in the longer run. As Daniel Kahneman has said: “robots will show up in China just in time.”

From Ben Bland in the Financial Times:

Factory managers tell the same story at industrial estates across Dongguan, in the southern province of Guangdong, which has gone from small town to a megacity of more than 7m people over the past two decades as manufacturers flooded in to take advantage of the vast supply of cheap labour.

A closely watched factory survey on Wednesday revealed that Chinese manufacturing is having its worst month since the depths of the financial crisis. But while heavily indebted steel and cement plants lie idle across China and luxury goods manufacturers have seen their sales slump, the jobs market in the south, one of the country’s most economically dynamic regions, is still in good health for those willing to travel from elsewhere and take up tough manufacturing work.

The problem for factory owners is that their pool of labour has been shrinking in recent years because of the rapidly ageing population and the growth of less-stressful job openings in the service sector, selling cappuccinos and cinema tickets to China’s expanding middle class.

Facing this long-term challenge, many manufacturers from TAL to Foxconn, the Taiwanese maker of iPhones and iPads, are increasing their investments in robots and automation.•