The rows of rectangular capsules lined up in a factory in Dongguan in southern China look like sleeping compartments for astronauts. The 24 Japanese-made knitting machines in the factory of Hong Kong-based Milo’s Knitwear will soon be joined by four more. In total, the machines cost the family-owned company $1.8m.
A factory with neat rows of machines and just two workers is the antithesis of the typical image of Chinese manufacturing. At other facilities in the industrial province of Guangdong, just across the border from Hong Kong, thousands of workers are typically hunched over their work stations making everything from iPhones to running shoes.
But the automation on display at this factory is emblematic of a new industrial revolution in China driven by the changing nature of the labour force: the three-decade-old one-child policy has led to a shortage of labour; competition for workers is so fierce that employers have had to dole out raises in the high teens annually to retain them; and many youngsters increasingly prefer working in China’s restaurants and stores to the tedium of making widgets. The labour shortage is likely to worsen because China is ageing fast. Less than 20 per cent of the population is under 14, down from almost a quarter a decade ago, according to the World Bank.