When Sun Huihai first began working at a factory in the southern manufacturing belt of Guangdong some 13 years ago, his colleagues were all humans.
Now, they are joined by more than 200 robots which can work around the clock, seven days a week, to help produce air-conditioners for home appliances giant Midea.
Rows of bright orange robot arms whir at all hours of the day, fishing freshly pressed plastic parts out of hot metal moulds and onto a long conveyor belt.
Driverless robots with blinking lights store these parts in a multi-storey warehouse, and later take them to be assembled into units that are sold in China and around the world.
The number of robots put to work on the factory floor increases every year, said Sun, 37, who heads the plant’s engineering department.
“Every day, we think about how to upgrade and make manufacturing here more intelligent,” he said.
Scenes like this have become more common across China, as the “factory of the world” turns to robotics to sustain and turbocharge its manufacturing juggernaut.
Over the past decade, the number of industrial robots on China’s factory floors has increased more than six times to over 1.7 million, as companies grappled with rising wages and a shortage of workers willing to staff production lines.
China now has the world’s third-highest density of robots in its manufacturing industry, trailing South Korea and Singapore in first and second place respectively, according to the International Federation of Robotics’ figures for 2023, the latest available.
Their deployment is poised to increase further as China continues its transition from low-value, labour-intensive production to advanced manufacturing – a national priority.
Policymakers in China, wary of the hollowing out of industries which can occur when countries get richer, have long pushed for greater automation to keep factories competitive.
Factories in China pumped out nearly 370,000 of industrial robots in the first half of 2025, up 35.6% from the previous year, according to figures from the National Bureau of Statistics.
But as robot adoption picks up pace, one question that arises is: What will happen to the more than 100 million workers whom China’s manufacturing sector employs?
Academics Nicole Wu and Sun Zhongwei, who interviewed and surveyed factory workers in southern China just prior to the Covid-19 pandemic, found that these individuals were not too concerned about robots just yet.
“Contrary to the more pessimistic assessments of automation, most manufacturing workers in Guangdong – who are buffered by steady increases in demand and a chronic labour shortage – appear to be unfazed by technological change at present,” they wrote in a paper published this year.
Back at the Midea factory, Wang Liangcai, 26, an engineer, believes that his job is safe from automation for now.
“Equipment still needs to be maintained, it can’t do so itself,” he said.
“But if you think about the long run ... we also don’t know how things will be.” — The Straits Times/ANN
Safe asset: US dollars being displayed at the Vietnam International Bank in Hanoi. The risk is rising that the greenback’s monopoly in payments is headed for the history books. — Reuters
THE social-media video where Donald Trump’s artificial intelligence (AI) avatar is making Nike sneakers may be just a spoof on the United States president’s quixotic bid to re-industrialise America by eliminating bilateral trade deficits.
But the meme contains a kernel of truth.
The world’s farmers, fishermen, and factory workers labour hard to earn the US$100 bill that the US Federal Reserve (Fed) prints at no cost.
This exalted status, which a French politician from the 1960s termed as the US dollar’s “exorbitant privilege,” has been taken to a breaking point by the tariff war.
No matter what happens in the long run to the United States currency’s value or its role as a safe haven for central banks and private investors, one thing is clear: The greenback’s monopoly in payments, whereby it’s exchanged in 88% of all trades, is headed for the history books.
A weekend trip to Vietnam brought that home to me.
In Hoi An, a 15th-century trading port repurposed as a tourist attraction, tailors and shoemakers pay for visitors’ taxi rides to their shops and shell out commissions to hotels for directing guests their way.
If they didn’t have to charge customers a 3% credit-card fee, they might be able to do more to nudge inveterate shoppers.
For instance, they could raise their prices by 1% and still throw in a dinner voucher for high spenders – if they purchase one more linen shirt. The buyers will be richer, as will the sellers.
The reason they can’t fund such sales promotions is the US dollar.
Or, to be more precise, a financial architecture built around the idea that a payment made on a foreign credit or debit card must set off a chain of expensive activity underpinned by the greenback.
For 18 major global currencies that settle without much friction, those costs are negligible.
But for the Vietnamese dong, and most other Asian currencies, they’re a burden, which a highly competitive apparel and footwear industry working on tight margins can’t absorb.
So it passes on all of it – and sometimes more – to a buyer who would much rather take the free meal.
Take my example. To pay the tailor in Hoi An, my bank had to obtain the local currency, which doesn’t have a liquid market outside Vietnam.
So my money most probably got converted into US dollars in Hong Kong. After reaching Vietnam, the funds got exchanged again into Vietnamese dong.
Almost 40% of the greenback’s US$7.5 trillion daily turnover comes from its role as a vehicle of value. Neither the buyer nor the seller has any direct interest in it. Yet they can’t transact without it.
Trump is aware of America’s special status: He has even threatened countries looking to come up with alternative global reserve currencies with 100% tariffs.
A high-profile disengagement with the US dollar – for instance, when it comes to Saudi Arabia’s invoicing of its oil – may not go down well with Washington.
What the White House can’t control, however, are low-profile shifts in the engine room of the payment industry.
Even before Trump’s inauguration, I noted that the world of money was splintering into Western and Eastern blocs.
The trade war may have accelerated the schism, though the separation is now more likely to be along a US/non-US axis than a West/East split.
I can already pay a Thai merchant in baht from my Hong Kong bank account by scanning a QR code.
Vietnam plans to establish similar connectivity with Singapore.
These links are between commercial institutions, with third parties providing foreign-exchange services.
However, some central banks in Europe are working with their counterparts in Asia to explore automated conversion using blockchain technology.
If the pilots succeed, there may be no room for middlemen – software embedded in digital representations of fiat currencies will act as money changers.
Ergo, there may be no need for the US dollar to act as a go-between in transactions that don’t involve Americans.
This is just one of the many experiments underway to boost the efficiency of cross-border retail payments. They’re underpinned by US$800bil in remittances by overseas workers.
And then there’s what tourists spend. In Asia, they’re staying 7.4 days on average, 1.3 days more than before the pandemic, according to Mastercard Inc’s latest data.
For a small business in a lesser-known beach town competing against larger firms in more popular holiday destinations, each hour is valuable – and an expensive payment system an irritant.
It has been tolerated so far because nothing cheaper was available, and Asian policymakers’ focus was on shipping goods to the United States, a much larger opportunity.
But everything has changed since the April 2 reciprocal tariffs.
Chinese President Xi Jinping was about to arrive in Vietnam just as I was leaving.
Beijing has been pushing the so-called mBridge initiative in which financial institutions can swap digital currencies issued by their central banks to settle cross-border claims.
If the Trump administration is going to upset friends and foes alike to pursue a chimerical vision of labour-intensive industrialisation, then it has to be prepared for geopolitical realignments, and an erosion of at least one form of America’s exorbitant privilege.
Those who still view the US dollar as a relatively safe asset may want to hold it, as long as the United States remains the world’s predominant superpower.
But for tourists buying shoes or shirts in Vietnam, the 3% extra charge on payments is an avoidable, anticlimactic loss after haggling for – and winning – a nice discount on the merchandise.
Rather than incurring outsize fees to Visa Inc and its partner banks, a dinner at Hoi An’s Morning Glory restaurant seems like a fairer use of my money – while I wait for the last buttons to be sewed on. — Bloomberg
- Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. The views expressed here are the writer’s own.
Safe asset: US dollars being displayed at the Vietnam International Bank in Hanoi. The risk is rising that the greenback’s monopoly in payments is headed for the history books. — Reuters
THE social-media video where Donald Trump’s artificial intelligence (AI) avatar is making Nike sneakers may be just a spoof on the United States president’s quixotic bid to re-industrialise America by eliminating bilateral trade deficits.
But the meme contains a kernel of truth.
The world’s farmers, fishermen, and factory workers labour hard to earn the US$100 bill that the US Federal Reserve (Fed) prints at no cost.
This exalted status, which a French politician from the 1960s termed as the US dollar’s “exorbitant privilege,” has been taken to a breaking point by the tariff war.
No matter what happens in the long run to the United States currency’s value or its role as a safe haven for central banks and private investors, one thing is clear: The greenback’s monopoly in payments, whereby it’s exchanged in 88% of all trades, is headed for the history books.
A weekend trip to Vietnam brought that home to me.
In Hoi An, a 15th-century trading port repurposed as a tourist attraction, tailors and shoemakers pay for visitors’ taxi rides to their shops and shell out commissions to hotels for directing guests their way.
If they didn’t have to charge customers a 3% credit-card fee, they might be able to do more to nudge inveterate shoppers.
For instance, they could raise their prices by 1% and still throw in a dinner voucher for high spenders – if they purchase one more linen shirt. The buyers will be richer, as will the sellers.
The reason they can’t fund such sales promotions is the US dollar.
Or, to be more precise, a financial architecture built around the idea that a payment made on a foreign credit or debit card must set off a chain of expensive activity underpinned by the greenback.
For 18 major global currencies that settle without much friction, those costs are negligible.
But for the Vietnamese dong, and most other Asian currencies, they’re a burden, which a highly competitive apparel and footwear industry working on tight margins can’t absorb.
So it passes on all of it – and sometimes more – to a buyer who would much rather take the free meal.
Take my example. To pay the tailor in Hoi An, my bank had to obtain the local currency, which doesn’t have a liquid market outside Vietnam.
So my money most probably got converted into US dollars in Hong Kong. After reaching Vietnam, the funds got exchanged again into Vietnamese dong.
Almost 40% of the greenback’s US$7.5 trillion daily turnover comes from its role as a vehicle of value. Neither the buyer nor the seller has any direct interest in it. Yet they can’t transact without it.
Trump is aware of America’s special status: He has even threatened countries looking to come up with alternative global reserve currencies with 100% tariffs.
A high-profile disengagement with the US dollar – for instance, when it comes to Saudi Arabia’s invoicing of its oil – may not go down well with Washington.
What the White House can’t control, however, are low-profile shifts in the engine room of the payment industry.
Even before Trump’s inauguration, I noted that the world of money was splintering into Western and Eastern blocs.
The trade war may have accelerated the schism, though the separation is now more likely to be along a US/non-US axis than a West/East split.
I can already pay a Thai merchant in baht from my Hong Kong bank account by scanning a QR code.
Vietnam plans to establish similar connectivity with Singapore.
These links are between commercial institutions, with third parties providing foreign-exchange services.
However, some central banks in Europe are working with their counterparts in Asia to explore automated conversion using blockchain technology.
If the pilots succeed, there may be no room for middlemen – software embedded in digital representations of fiat currencies will act as money changers.
Ergo, there may be no need for the US dollar to act as a go-between in transactions that don’t involve Americans.
This is just one of the many experiments underway to boost the efficiency of cross-border retail payments. They’re underpinned by US$800bil in remittances by overseas workers.
And then there’s what tourists spend. In Asia, they’re staying 7.4 days on average, 1.3 days more than before the pandemic, according to Mastercard Inc’s latest data.
For a small business in a lesser-known beach town competing against larger firms in more popular holiday destinations, each hour is valuable – and an expensive payment system an irritant.
It has been tolerated so far because nothing cheaper was available, and Asian policymakers’ focus was on shipping goods to the United States, a much larger opportunity.
But everything has changed since the April 2 reciprocal tariffs.
Chinese President Xi Jinping was about to arrive in Vietnam just as I was leaving.
Beijing has been pushing the so-called mBridge initiative in which financial institutions can swap digital currencies issued by their central banks to settle cross-border claims.
If the Trump administration is going to upset friends and foes alike to pursue a chimerical vision of labour-intensive industrialisation, then it has to be prepared for geopolitical realignments, and an erosion of at least one form of America’s exorbitant privilege.
Those who still view the US dollar as a relatively safe asset may want to hold it, as long as the United States remains the world’s predominant superpower.
But for tourists buying shoes or shirts in Vietnam, the 3% extra charge on payments is an avoidable, anticlimactic loss after haggling for – and winning – a nice discount on the merchandise.
Rather than incurring outsize fees to Visa Inc and its partner banks, a dinner at Hoi An’s Morning Glory restaurant seems like a fairer use of my money – while I wait for the last buttons to be sewed on. — Bloomberg
- Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. The views expressed here are the writer’s own.
CHINA’S stuttering economic recovery post-Covid-19 pandemic reopening has stirred concerns that a protracted deep economic slowdown will have global repercussions, given its interconnectedness with each and every economy in this globalised world and transmission to both emerging and developed countries through different channels.
A slowing China economy is a bane for the world economy. While the global economy continues to gradually recover in 2023, the growth remains weak and low by historical standards, and the balance of risk remains tilted to the downside. It is not out of the woods yet.
Global manufacturing and services activities are losing momentum. Global trade, especially exports, remain in the doldrums, weighed down by weak consumer and business spending amid a continued inventory adjustment in the semiconductor sector.
Prices of commodities and energy have also softened. Global monetary tightening has started to weigh down on activity, credit demand, households and firms’ financial burden, putting pressure on the real estate market.
A slew of disappointing economic data for two consecutive months (June and July) from China indicated that the world’s second-largest economy (17.8% of the world’s gross domestic product or GDP) is indeed losing steam.
Falling exports, weak consumer spending, slowing growth in fixed investment and continued concerns about the property sector have dampened the recovery.
The emergence of deflation concerns adds to the complexity of China’s flagging recovery.
The Chinese government has provided a range of strategic measures aimed at targeting specific sectors.
These range from consumption (spending on new energy vehicles, home appliances, electronics, catering and tourism) to the property sector (reducing down-payment ratios for first-time homebuyers, lowering mortgage rates and easing purchase restrictions for buying a second house) and tax relief measures to support small businesses, tech startups and rural households.
China’s slowdown is a key risk for the world economy, commodities and energy markets as well as the semiconductor industry.
Prior to the Covid-19 pandemic, China was the world’s most important source of international travellers, accounting for 20% of total spending in international tourism (US$255bil overseas and making 166 million overseas trips in 2019).
We consider three channels through which China’s slowdown can have spillover effects on Malaysia via direct and indirect transmissions: trade and commodity prices, services and financial markets.
Overall, the estimated impact of a 1% decline in China’s GDP growth could impact about 0.5% points on Malaysia’s economic growth.
Trade is the most important channel as China has been Malaysia’s largest trading partner since 2009, with a total trade share of 16.8% (exports share: 13.1%; imports share: 21.2%) in the first half of 2023 (1H23).
Spillovers from slower China demand and commodity prices are negative for Malaysia, a net commodity exporter.
After recording seven successive years of increases in exports to China since 2017, Malaysia’s exports to China declined by 8.8% in 1H23.
In sectors such as tourism, China’s tourists are one of the major foreign tourists in Malaysia. In the first five months of 2023, Chinese tourists totalled 403,121 persons or 5.4% of total international tourists in Malaysia, and was only 12.9% of 3.1 million persons in 2019.
According to the Malaysia Inbound Tourism Association, though the number of Chinese tour groups coming to Malaysia has increased in July and August to between 800 and 1,000 for the summer vacation, the number of tourists per group is smaller between 10 and 20 persons.
While direct financial links between China and Malaysia are limited, there will be indirect spillovers through spikes in global financial volatility as investors worry that China’s deep economic slowdown would temper global growth, and also has spillovers to the US economy.
Will China foreign direct investment (FDI) inflows into Malaysia slow?
Capital movements will be influenced by the inter-linking of factors such as economic growth and investment prospects in the host country (Malaysia).
These include stable political conditions and good economic and financial management as well as conducive investment policies.
The US-China trade war and rising trends of geoeconomic fragmentation have witnessed FDI flows among geopolitically aligned economies that are closer geographically as well as geopolitical preferences.
Throughout the period 2015-2022, China’s gross FDI inflows into Malaysia averaged RM7.5bil per year. Even during the Covid-19 pandemic, China’s economic slowdown did not deter the inflows of FDI into Malaysia (RM7.8bil in 2020; RM8.1bil in 2021; and RM9.8bil in 2022).
In 1H23, China’s gross FDI inflows increased by 25.2% to RM2.1bil though it is likely that the full-year FDI will be below the average FDI inflows of RM8.6bil per year in 2020 to 2022.
China was the largest foreign investor in Malaysia’s manufacturing sector in 2016 to 2022 before dropping to second position in 2022 and the fourth position in 2021.
There was a contrasting picture when it comes to China’s approved investment in the manufacturing sector, which saw two consecutive years of decline (2022: 42.5% to RM9.6bil and 2021: 6.5% to RM16.6bil) and declining further by 17.8% to RM4.3bil in the first quarter of 2023.
We believe that Malaysia will remain one of the preferred investment destinations to China, given both countries’ strong established friendship and bilateral ties in trade and investment as well as people-to-people movements.
Malaysia needs to enhance its investment climate with progressive policies to rival regional peers to offer the country as a China Plus One destination for China and foreign companies.
Malaysia can offer investments to build a chip-testing and packaging factory, advanced manufacturing technologies such as robotics and automation, manufacturing electric vehicle supply chain, petrochemicals, renewable energy, agriculture and food processing.
China can offer the technology, innovation and technical know-how as well as talent that deepen the country’s industry integration with global supply chains and also links Malaysia and China to South-East Asia.
China can invest in Malaysian manufacturing companies to help them adopt advanced manufacturing technologies and further improve their competitiveness.
The RM170bil prospective investments (comprising RM69.7bil from 19 memoranda of understanding and RM100.3bil from the round-table meeting) concluded during the prime minister’s visit to China are set to provide a massive investment boost to our economy for years to come.
Among these are China’s Rongsheng Petrochemical Holdings, which will invest RM80bil to build a petrochemical park in Pengerang, Johor; and investment from Geely, with an initial investment of RM2bil in the Tanjung Malim Automotive Valley, which will gradually increase to RM23bil in the future.
LEE HENG GUIE is Socio-Economic Research Centre executive director. The views expressed here are the writer’s own.
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