This is the new smart logistics center of China’s e-commerce giant, JD.
The 500,000 square meter facility is packed with the latest supply chain technology.
But it wasn’t too long ago that tasks such as
shelving and packing were done manually by employees.
Jiahao’s situation highlights a bigger trend in China – the push toward automation.
The Chinese labor market is facing a number of challenges,
including an aging population and rising wages -
issues that automation could help relief.
It's still rapidly evolving — that aging population is a reality.
China's now facing the challenge of potentially getting old before it gets rich.
JD.com’s massive logistics park in Dongguan, south China
can handle 1.6 million orders a day.
Let’s take a look inside.
After an order is placed, packages are transported to a sorting facility, which is fully automated.
There are 800 of these sorting chutes, which help divide up packages
destined for China’s many different regions.
China’s working age population has shrunk by more than 5 million people in the last decade,
as births have dropped.
That makes automation at places like JD logistics park,
even more necessary.
Qin Jiahao has been working at JD for around six years.
A large part of his job has become automated too.
What kind of tasks do you do differently now versus before?
So, how did the Chinese labor force get here?
It all started in the late 70s when China enacted its one-child policy
to control its rapidly growing population.
Between the 1940s and the 1980s, the country’s population doubled in size,
from over 500 million people to more than 1 billion.
Over the next 40 years, that growth slowed to 40%.
Today, the country’s population is a whopping 1.4 billion —
more than four times the size of the U.S.
However, the proportion of China’s working age population is falling,
dropping 6.8 percentage points from 2010 to 2020.
Despite efforts to reverse the trend, births fell in 2020.
That was the fourth-straight year of decline.
Automation, of course, is one of those big opportunities
and by that we include digitization, both to the customer, and more importantly,
up the chain back to suppliers.
That is really going to be the driver of increasing all of that productivity.
In the financial sector, about 10 years ago, if you looked at the average productivity
of a financial worker in China, compared to say Europe, it was maybe 20%.
Now it's closer to 40, or 50%.
So still lagging, but to have that degree of change, in the course of almost five years
is almost unheard of.
It’s not just the factories and warehoues that are seeing more automation.
China’s focus on areas like artificial intelligence is spurring rapid advancement
in areas like driverless transportation.
The southern Chinese city of Guangzhou is a hub for some of China’s tech companies
to test their driverless cars.
One such start-up is WeRide.
Users can hail one of the company’s robotaxis or ride on its driverless bus.
Driverless cars could make jobs such as taxi drivers redundant
and may even be applied in long-haul transportation modes eventually.
I caught up with WeRide’s CEO Tony Han
to talk about the issues autonomous driving could solve.
One is the shortage of labor, especially in the concept of aging society.
In China, and also in U.S., in most of the developed countries,
human labor are getting more and more expensive.
People need better pay, need more welfare.
Think about if you want to get a chauffeur, you want to get a driver,
it will be extremely expensive.
To call a taxi sometimes in metropolitan cities and in some big cities,
is also very expensive.
Can we find a cost-effective way to supply this kind of transportation service to everybody?
Through autonomous driving, with the development of artificial intelligence,
we are able to make the car drive by itself with the input of all kinds of sensors.
The other problem is things like we can make the city greener.
Do we really need that hundreds of thousands of cars in the city?
And all over the city, you probably need, maybe one-tenth of the autonomous driving cars
to finish all these kind of transportation requests
and we can reduce the carbon dioxide emission to a big extent.
But of course, increasing automation could also lead to jobs disappearing altogether.
With that brings challenges on how to reskill the population for the new age.
One study estimates that up to 220 million workers may need to transition between jobs
by 2030, in part due to automation.
The good news about automation is that it actually works,
that it intends to improve quality, reduce cost, reduce time required
all these good things.
The bad news about automation is that it actually works.
As in, it takes out the human resources.
And China's going to get it just like everywhere else to us,
except bigger, because China is bigger.
So, 226 million Chinese people will probably have to find a new job
in over the next 10 or 15 years because of automation.
That, of course, is a massive challenge for the employer, but the employee,
but also for government and for society as a whole.
And companies will have a key role to play.