As much as 600 companies in Kunshan, the heart of China’s electronics industry in Jiangsu Province, are planning to fire thousands of workers in an apparent move to trim labor costs.The looming move follows a series of changes that have occurred in Kunshan over the last two years. In 2014, the county met an industrial explosion that killed 146 people and stripped some reputation off of it. The incident was blamed on substandard safety measures and disorderly industrialization.
After the unfortunate event, the local government was reshuffled, resulting to a transition that decreased profits of the county’s economic players. Xu Xujiong, head of Huaneng Welding, recalled, “Our profits dipped sharply over the past year.”Now, Kunshan hopes to reinvent its strategy by replacing humans with artificial intelligence, South China Morning Post said. Taiwanese companies compose of more than 60% of the county’s GDP, and they are set to get the ball rolling.
Thirty-five companies have so far spent 4 billion yuan ($580,863,440) on artificial intelligence in 2015, including Foxconn — one of Apple’s main suppliers.
Kunshan publicity department head Xu Yulian said:
“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labor costs. More companies are likely to follow suit.”
That’s around 600 more companies as per government survey, and we can only wonder how that affects Kunshan’s population of 2.5 million, especially when the majority of them are migrant laborers.
In conjunction with such effort, Kunshan encourages entrepreneurship, having established a business incubation center earlier this year. At least we know the county won’t run out of humans just yet.