2016 is the year of Donald Trump, win or lose. On Asian policy, his key slogan has been “China, China, jobs, jobs.” This involves his contention that the unscrupulous Chinese have “stolen” America’s manufacturing jobs through such unfair trade practices as currency manipulation and IPR violations. Trump’s blue-collar base is convinced that he is the Pied Piper who can bring those jobs back home. The illusion is that America can return to a 1950s “Leave It to Beaver” era when (largely white) families were economically secure with stay-at-home Moms and Dads with good paying union-provided manufacturing jobs who served as the sole bread winners.
The reality is that, based on the economic principle of comparative advantage, if rising wages or less than ideal conditions for international investors make China no longer competitive as a manufacturing base, these jobs will head to Vietnam, Cambodia, Burma or Latin America rather than returning to Michigan or Ohio. The mass return of factories to the Rust Belt is about as likely as the reappearance of the horse-and-buggy.
And then there is the element of robots. The Japanese, because of changing demographics from a “silver revolution” where over a quarter of their population is over sixty-five, and the Taiwanese, because of increasing labor difficulties in their mainland Chinese factories, are turning to robotics as a solution. The fantasy of HAL the robot who takes over operation of the spaceship in the film “2001: A Space Odyssey” is becoming reality.
The South China Morning Post reported on May 21st (http://www.scmp.com/news/china/economy/article/1949918/rise-robots-60000-workers-culled-just-one-factory-chinas) that Taiwan’s Foxconn company, an information technology supplier to Apple and Samsung, “has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots” at one of its major factories in Kunshan on the Chinese mainland. “It has tasted success in reduction of labor costs,” said a company spokesperson. The paper noted further that “as many as 600 major companies in Kunshan have similar plans.” And the Daily Mail, in a December 2, 2015 article titled “Androids Everywhere” (http://www.dailymail.co.uk/sciencetech/article-3343187/Androids-superhero-suits-realistic-humanoids-Japan-showcases-latest-robotics.html)reported on the Biannual International Robot Exhibition in Tokyo, where an aging and immigrant-wary Japanese society showcased “futuristic machines…focused on disaster relief, entertaining, assisting the elderly, and farming.”
BBC on May 25th ( http://www.bbc.com/news/technology-36376966) noted the potential impact of Foxconn’s reduction of its Chinese workforce by 60,000 due to robots. It reported that “economists have issued dire warnings about how automation will affect the job market, with one report from consultants Deloitte, in partnership with Oxford University, suggesting that 35% of jobs were at risk over the next 20 years.”
Robots replacing workers in China have both foreign policy and domestic economic implications. The Communist Party in China has continued its dictatorial rule based on Deng Xiaoping’s slogan that “to get rich is glorious”– providing the Chinese people economic incentives in lieu of greater freedom. Ensuring job creation for the “floating population” of peasants coming in from the countryside with manufacturing jobs in places like Kunshan has assured regime stability. If robotics technology in Chinese plants slows job creation, then instability could suddenly rock China. Such instability in the world’s second-largest economy would affect the American consumer and investor as well.
Then there is the issue of Donald Trump’s mantra of “China, China, jobs, jobs.” If the manufacturing jobs he seeks to return to America from China are being increasingly done by robots, there will be little to celebrate for his working-class voter base. Being a go-for under HAL the robot is not the promised vision of a return to a “Leave It to Beaver” America.