Made in China 2025: Implications of Robotization and Digitalization on MNC Labor Supply Chains and Workers’ Labor Rights in China

Abstract

This article examines how digitalization and robotization may affect the configuration and use of labor supply chains and the need for overseas cheap labor. Emphasis will be placed on China and its program of Made in China 2025 as well as its possible effects on foreign MNC labor supply chains and their workers under Chinese labor laws and including the “re-shoring” of MNCs, where they return to their home country using their own “cheap-labor-robots”. Tom Reuner, research vice president, intelligent automation, at HfS Research, stated “...companies won’t have to think any more about whether to offshore back-office processes to take advantage of cheaper labor. That’s because labor needs will be drastically reduced, and running a bot will cost the same — that is, not very much — everywhere.” This article in Part I describes the unfolding phenomena and significance of the fourth industrial revolution — global digitalization and robotization. Part II explains the implications of Made in China 2025 for foreign MNCs in the context of China’s declining economic situation with rising wages and a dwindling labor supply. Part III analyzes the likely impacts of Made in China 2025 on future structures of MNC labor supply chains and the issues arising under Chinese labor laws; and Part IV concludes.