China’s birth rate has fallen to its lowest level in history, raising concerns that the country could face a major economic shock in the coming decades. The size of its vast labor force is shrinking, while the number of elderly pensioners continues to rise. Despite various policy efforts, the Chinese government has been unable to reverse the downward trend in births.
However, China is increasingly looking toward another potential solution: robots and automation technology. President Xi Jinping has for years promoted the modernization and automation of the country’s manufacturing sector. Now, these technological ambitions are aligning with the challenges posed by demographic imbalance.
Stuart Gietel-Basten, a demographer at the Hong Kong University of Science and Technology, said that if China continues along the same path as it has over the past 20 to 30 years, a major crisis could emerge. The country’s population structure and economic system are becoming increasingly misaligned, he noted. “But why should they continue in the same way?” he questioned.
Experts suggest that if properly managed, automation and artificial intelligence (AI) could shield China’s economy from severe decline for at least several decades. However, transitioning to high-tech production is not simple. In the short term, jobs may be lost, and in the long term, the nature of work will change significantly. In a country of 1.4 billion people, such structural adjustments present considerable challenges.
The Robot Revolution
China is currently the world’s largest market for industrial robots. According to the International Federation of Robotics, more than half of all robots installed globally in 2024 were deployed in China. High levels of automation have enabled Chinese factories to mass-produce electric vehicles and solar panels at lower costs, strengthening the country’s trade surplus in global markets.
China is also making significant investments in humanoid robots. More than 140 companies are currently developing such machines. Some humanoid robots have already been tested in manufacturing, logistics, and research laboratories. Manufacturers say these robots are not yet as productive as humans but are rapidly improving in tasks such as product sorting and quality inspection.
Bert Hofman, a professor at the East Asian Institute at the National University of Singapore, said that as population decline begins to weigh on China’s economy, policymakers are betting that automation and AI will boost productivity enough to compensate for the shrinking workforce.
Risks and Challenges
However, uncertainty remains about how the transition will unfold. China’s population is expected to decline more rapidly toward the end of this century. Professor Hofman warned that if productivity gains fail to outpace the shrinking labor force, China could fall behind after 2070.
Another concern is that higher productivity does not guarantee job security. Fewer workers may be needed to produce the same output. China already faces labor shortages in certain sectors while experiencing unemployment in others. Although automation may bring long-term benefits, it could also increase short-term job displacement.
Experts estimate that AI and robotics could affect nearly 70 percent of workers in China’s manufacturing sector. Guojun He, a professor of economics at the University of Hong Kong, said automation is part of the long-term solution. However, if not managed carefully in the short and medium term, many workers could lose their jobs, increasing social and political pressure.
To address this challenge, significant investment in workforce retraining will be necessary to equip workers with new skills that complement automated systems. Strengthening social safety nets will also be essential to support individuals during job transitions, relocation, or periods of unemployment.
Philip O’Keefe, a professor at the University of New South Wales in Australia, said declining birth rates will have far-reaching social impacts. However, since both population and working-age numbers are projected to decline gradually, there is still time for adaptation.
