Tech Revolution in China

Tech Revolution in China

This article on the tech revolution in China examines aspects of the post-pandemic era, examining how organizations respond towards the impact of automation and technology on job availability. It also examines decisions by policymakers and business leaders on aspects of cybersecurity management and data and privacy protection.   

Impact of Automation and Technology on Job Availability   

Autonomous vehicles, drones, and robots are predicted to cause at least 25% of job displacement in China over the next two decades – between 1.5 million and 2 million per year. However, AI and related technologies could also increase real income, spending levels, and productivity through the creation of at least 90 million highly specialized jobs within the same period. The government need to anticipate a considerable disruption to the current labor market as it would entail millions of workers to switch careers, learn new skills, or possible relocate. This is already evident in existing business models in sectors like finance, retail, entertainment, and media. For example. service robots in restaurants and hotels deliver food to people’s tables and rooms while police robots in some cities patrol the streets, alert jaywalkers, and take pictures of reckless drivers. Industrial robots, on the other hand, have been widely used in manufacturing since 2018 with the number reaching to almost 155,000 – more than what can be found in Europe and the Americas combined.   

But for companies willing to invest in AI and related technologies, this could cover many aspects of business operations including sales and marketing, product personalization and R&D, human resource processes, and even cybersecurity management. As China’s working age population continue to shrink, policy makers and economists are trying hard to develop innovative solutions that can cope with China’s aging workforce. There is a push to increase the official retirement age which has been met with strong opposition from citizens mainly because of their physical decline and the difficulty in finding suitable jobs. The current statutory retirement age in China is 50 for female workers, 55 for female cadres (civil servants) and 60 for male workers. If not implemented, the country’s labor force will lose 35 million workers by 2026 and the nation will have to deal with more than 300 million new retirees.   

The push toward automating jobs is more urgent more than ever. “Automation, of course, is one of those big opportunities,” said Jonathan Woetzel of McKinsey. “And by that we include digitization, both to the customer, and more importantly … up the chain back to suppliers. That is really going to be the driver of increasing all of that productivity.”  

“Nearly 100 million workers will have to switch jobs by 2030,” Marketplace’s China correspondent Jennifer Pak. “But we believe that investments in automation early on as well as widespread implementation of retraining programs to help workers transition to new types of jobs – all of these could really help China jump ahead economically.”   

AI adoption in China will help the country acquire process optimization and technologically complex product development – in accordance with the “Made in China 2025” policy. “You cannot just compete with cheap labor. You have to elevate the manufacturing capabilities as a whole. The focus now is to encourage innovation, encourage the development of automation and robotics technologies. And also encourage manufacturing companies to adopt robotics in the production line,” explained Jing Bing Zhang of IDC China. 

Cybersecurity Management and Data and Privacy Protection  

China’s ambition to be a global leader in technology development, digital transformation, and the 4th Industrial Revolution is hampered by the government’s poor efforts to safeguard citizen’s privacy. “From the deliberate ambiguity of new cybersecurity and data protection laws, public reports of data leakages, and the government’s monitoring of Chinese citizens, it’s clear that China puts a greater emphasis on government access to data than it does on protecting individual and company privacy. Because of this, Beijing will gain further control over Chinese society, while leaving the privacy and security of its citizens and foreign investors vulnerable to exploitation,” said Lauren Maranto, Freeman Chair in China Studies.  

China’s data security regulations are vague when compared to the EU’s General Data Protection Regulation (GDPR), and it makes it acceptable for many organizations to use and exploit data. “This creates greater risk that companies will be penalized for the unintentional violation of consumer rights, while others may exploit loopholes to use citizens’ data for personal gain. For consumers, the lack of clear data security guidelines increases the risks of their personal information is leaked, exploited, or used in an unauthorized manner. The ambiguous language used in China’s cybersecurity laws leave companies and individuals ill-equipped to protect their information, while also creating space for government subjectivity in interpreting these laws,” Maranto explained.   

However, two new Chinese laws – the Data Security Law and the Personal Information Protection Law – have taken into effect in Q3 2021 which provide more clarity about data localization, data export, and data protection requirements especially for multinational companies operating in China. Alongside the Chinese Cybersecurity Law in 2017, this increasingly comprehensive legal framework for privacy and data security will protect data and regulate the use, access, and distribution to ensure that it will not have negative impact on China’s economy, national security, livelihood of Chinese citizens, and public and private interests. 

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