General

Chinese young people’s interest in manufacturing is declining

Dong Sheng is the boss of Guangzhou Renyi Labor Dispatching Co., Ltd. In 2006, he just entered the labor intermediary industry. At that time, companies came to select workers, "how many people are needed, how many people are there". But since the year before last, recruitment has become more and more difficult year by year. Last year, more than 200 people could be recruited a day. At the end of April this year, this number dropped to about 70 people.

According to the "2020 Migrant Workers Monitoring and Survey Report", according to this report, the number of migrant workers in China in 2020 is 285.6 million, a decrease of 5.17 million from the same period last year, of which 27.3% are in the manufacturing sector. In response to the report of the Bureau of Statistics, Ma Xinyuan, an economic expert, said: "Young people are sober. They like freedom and dislike the working atmosphere of factories. This situation is not optimistic. By 2022, the status of the world's factories may not be guaranteed."

Young people advocate freedom, pay more attention to personal life experience, and pay more attention to the quality of life. Compared with the boring, repetitive, and simple manual labor in manufacturing factories, young people prefer takeaways, express delivery, live broadcasting, self-media and other free emerging Occupation. The owner of the factory said: "Now there is no recruitment of young people. Even if they are recruited, they will leave after less than a month. When the young people come, they will walk and check again. In the end they are willing to stay and work. not a single one."

▲In the area of Guangzhou Haizhu Kangle Village where there are many garment processing factories, there is a scene where bosses wait in long lines to be picked in the recruitment market. On the 600-meter city village street, thousands of owners of garment factories holding signs and samples of clothing, waiting for the favor of the workers.

Even Japan's Daiwa Securities has predicted that China will lose its status as the "world factory" by 2022 at the latest.

From 2008 to 2018, the average annual growth rate of the number of migrant workers engaged in manufacturing in China was -2.84%, and more young people turned to emerging service industries such as food delivery, taxi rides, express delivery, and live broadcasting. Chen Chun (a pseudonym) from Liaoning, in his early 20s, just came to Shenzhen to become an express driver. In his opinion, the freedom and flexibility of driving a car is much easier than entering a factory as an apprentice.

Made in China has reached a critical point of change, and the history of having a large amount of cheap labor has been turned over. On April 28, the Financial Times reported that China’s seventh national census may have a total population of less than 1.4 billion. At the moment, deep aging is approaching, the demographic dividend window is closed, and the costs of land, raw materials, and shipping logistics are all rising, which is pushing Chinese manufacturing companies into a new situation.

The international environment is also quite complicated. The anti-globalization trend and the new crown pneumonia epidemic have prompted developed countries such as Europe, the United States and Japan to re-examine the global layout of the industrial chain, and have introduced subsidy policies to encourage companies to relocate their manufacturing industries. The status of China's "world factory" is increasingly being challenged by Southeast Asian countries such as Thailand, the Philippines, Vietnam, Indonesia, Laos, Cambodia and Myanmar, and even South American countries headed by Mexico.

At the end of March, data from the Ministry of Industry and Information Technology showed that the proportion of China's manufacturing industry in GDP has dropped from 32.5% in 2006 to about 27% in 2019. The severe situation should be paid attention to. Many experts said that the decline in the proportion of manufacturing will not only drag down the current economic growth and affect urban employment, but will also bring hidden dangers to industrial safety and weaken China's economy's ability to resist risks and international competitiveness.

Japan's Daiwa Securities has predicted that China will lose its status as the "world factory" by 2022 at the latest.

Why can't China keep these labor-intensive factories?

The core factor is the rise in labor costs! Data released by the National Bureau of Statistics on April 30 showed that in 2020, the average monthly income of migrant workers engaged in manufacturing was 4096 yuan, an increase of 138 yuan over the previous year, an increase of 3.5%, and it was the industry with the fastest growth rate. Compared with 2006, the average monthly income of migrant workers who went to cities to work and do business was only 966 yuan.

After the Spring Festival this year, a subsidiary of a Zhejiang Electric Co., Ltd. did not hire a general worker.

In order to catch the goods, the administrative staff had to go to the workshop to work overtime. In March alone, they added 29 days of work. Chairman Li Zhixiong sighed: “It used to be that many people exported to the provinces, but now they can’t lose. Now the proportion of non-locals in Wenzhou is getting less and less. People come out to work for ten or twenty years, and wait until the kids start to go to high school or college. Not coming out anymore."

In many cases, it is not that employers are willing to raise wages to recruit employees. In Qidong, Jiangsu Province, Zhao Xiao (pseudonym)'s father ran a small-scale marble processing factory. Zhao Xiao posted on the Internet to recruit workers. He set the target age between 30 and 50 years old. The monthly salary is 7,500 yuan. With experience, the salary can be increased. But after more than half a year of recruiting, there are very few suitable candidates.

Factories will face an unprofitable dilemma for excessive wage increases. At the same time, young people's attitudes towards choosing jobs are also changing. In recent years, the growth environment of the new generation of young people in China has been greatly improved. Rural children are reluctant to engage in high-intensity overtime, low welfare guarantee, simple working environment, assembly line, and ordinary manufacturing work like their parents. The attractiveness of manufacturing to young people is waning.

Under such circumstances, the advantages of underdeveloped countries in undertaking the transfer of China's manufacturing industries have been highlighted.

A year ago, an industry insider inspected the investment environment of Uzbekistan's manufacturing industry: a Chinese company invested in the local area and enjoyed preferential policies in terms of land, factory buildings, taxation, etc. It dispatched more than 20 engineers and hired a large number of local employees, each with a monthly salary of 1,000. Around RMB yuan, the net profit for a year can reach RMB 200 to 300 million.

"People are also very capable, working overtime every day, no problem." Now that the wages of general workers in Wenzhou are not mentioned at 6,000 yuan, it is already difficult to recruit people who are willing to work. In India, the monthly salary per person is only 600-800 yuan. China has no way to fight for the "demographic dividend" with Vietnam, India and other countries.

It is worth noting that the manufacturing industry has always been the foundation of China's real economy. The country’s 3.27 million manufacturing companies have absorbed 105 million jobs, accounting for 27.3% of the total employment, ranking first among all industries. The most competitive industry in China is manufacturing, and the decline in the proportion of manufacturing will definitely have a great impact on the competitiveness of the entire country. With reference to international experience, even in the United States, where the proportion of manufacturing is too low, a series of risks will indeed arise.

▲On March 3, 2021, the working day after the Lantern Festival, on the streets of Guangzhou Kangle Village, the bosses of the garment factory lined up, holding templates in their hands to recruit migrant workers. (Source: People's Vision)

Digital transformation, leanness, and fewer people are the way out for the manufacturing industry?

Experts in the industry believe that in order to achieve a labor productivity of about two-thirds of the level in developed countries, one cannot count on population growth and can only rely on intelligent manufacturing.

Building unmanned factories and realizing industrial automation is the core of solving labor problems, reducing industrial production costs, and improving competitiveness with other developing countries; improving quality control capabilities and product quality through smart manufacturing can also promote product quality improvement The country is on par.

On April 14, the Ministry of Industry and Information Technology issued the "Fourteenth Five-Year Plan for Intelligent Manufacturing Development (Draft for Solicitation of Comments)", proposing to build more than 2,000 new technology application smart scenarios, more than 1,000 smart workshops, and more than 100 leaders by 2025. The benchmark smart factory for industry development, and key industry backbone enterprises have initially realized intelligent transformation; by 2035, manufacturing enterprises above designated size will be fully digitized.

Since 2015, China has successively selected more than 200 smart manufacturing pilot demonstration projects in nearly 100 industries, and the exploration has yielded initial results. Changhong Intelligent Manufacturing Industrial Park is one of them. This industrial park with an investment of about 5.5 billion yuan covers smart display terminals, smart energy and related supporting industries, and introduces industrial robots, machine vision, edge computing and other technologies into the production process. At present, Changhong's intelligent production line can reduce manpower by 70%, increase per capita output efficiency by 65%, and achieve a logistics automation rate of 95%.

Fewer people is a development direction of intelligent manufacturing, but less people does not mean unmanned. The ultimate problem Changhong explores for intelligent manufacturing to solve is to meet individual consumer needs with industrialized means, and to accept fragmented orders with flexible production in the Internet of Things era to achieve large-scale personal customized production.

The prospects are promising, but for small and medium-sized enterprises such as China's apparel industry, there is a longer way to go to realize smart manufacturing.

"Automation should be cyclically and gradually promoted. Don't pursue complete high-end automation in a short time." Experts suggest that companies adapt to local conditions to transform digital workshops, reduce investment points in the first year, and allow employees and management teams to adapt first, starting from the annual increasing labor demand in the workshop , Solve the needs of employee gaps.

After the benefit is seen in the second year, it is determined as appropriate to maintain stable production demand and combine man-machine to ensure a good advancement in enterprise capital investment and the application of automation equipment.

Smart manufacturing in the clothing industry should not set a unified standard for measurement. Enterprises should achieve the best balance at this stage according to their own industry characteristics, business development methods, supply chain, personnel flow, etc., and then continue to improve the level of informatization and data utilization. .