China Factories Turn to Robots as Wages Rise, Culture Shifts

A Chinese factory near Shanghai is relying on a new breed of workers to maintain its competitive advantage in assembling electronics devices: small robots designed in Germany. Suzhou Victory Precision Manufacture Co.'s chairman, Yugen Gao, said the days when the company drew its strength from China's cheap and hardworking employees are gone. "We've been losing that edge in the past three years," said Mr. Gao in his office, overlooking rows of buildings where a battalion of robots was cranking out computer keyboards. China's appetite for European-made industrial robots is rapidly growing, as rising wages, a shrinking workforce and cultural changes drive more Chinese businesses to automation. The types of robots favored by Chinese manufacturers are also changing, as automation spreads from heavy industries such as auto manufacturing to those that require more precise, flexible robots capable of handling and assembling smaller products, including consumer electronics and apparel. At stake is whether China can retain its dominance in manufacturing.