China’s labor crunch drives robot demand

Workforce shortages and rising costs push manufacturers to accelerate automation and reskill workers.

China has emerged as the dominant force in industrial robotics, accounting for 54% of the 542,000 units demanded globally, driven by structural shifts in manufacturing and workforce dynamics.

“[There] is a massive manufacturing scale and a strong demand for automation,” said David Zhu, Partner at Roland Berger Shanghai. He added that rising labor costs, industrial upgrading and Beijing’s smart manufacturing push have reinforced adoption. “China has a little lower [robot] density, compared to Germany, compared to Japan,” Zhu said, “So the Chinese government will continuously use this density data as a critical KPI to push the whole automation.”

The rise of domestic robot brands and humanoid robotics is also accelerating import substitution, strengthening automation as a pillar of China’s long-term economic strategy.

Beyond cost pressures, labor shortages are intensifying the shift. “It's really the adoption of robots. It's beyond the typical managing rising costs, but it's really looking around the workforce shortage,” said Marcelo Tarkieltaub, Regional Director for Southeast Asia at Rockwell Automation. “So there's a real increase in demand in robotics and automation, as there's less people available to work in the manufacturing space.”

According to Rockwell’s latest survey, adoption is widespread. “You really see that 95% of the manufacturers globally, especially here in Asia, are really investing in adopting those technologies, robotics, AI and automation,” Tarkieltaub said, adding that digital tools are helping close global skills gaps.

Automation is reshaping factory roles. Zhu said “assembly line operators will easily be replaced by the robots,” while material handlers can be displaced by autonomous vehicles. Tarkieltaub noted repetitive and inspection tasks are increasingly handled by AI systems, improving quality and consistency.

Yet both executives stressed that complex decision-making roles remain human-led. Engineers and operators are upgrading skills to manage and optimise automated systems, with new “cobot operators” emerging to oversee human-robot collaboration, signaling that automation is transforming, not eliminating, the industrial workforce.