Why China’s AI automation push is a risky social experiment

China is betting artificial intelligence will solve its labour shortage, as policymakers ramp up a nationwide push to deploy AI and robotics across the economy. But it may be worsening a different problem: the erosion of stable jobs for young workers.China’s push has accelerated investment in industrial automation, installing more than half of the world’s robots in 2024 alone and doubling down on AI-enabled production. The strategy is presented as a necessary response to the demographic decline. Yet it is also a risky experiment: automating at scale before reaching broad middle-class stability.Automation may keep factories running. Whether it can stabilise society is another question.The government’s push spans robotics, AI-enabled manufacturing and advanced technical systems but the employment effects are uneven. Analysis by the Rhodium Group finds that the new hi-tech industries (electric vehicles, advanced batteries and renewable energy equipment) generate far fewer entry-level and mid-skill jobs than the manufacturing sectors they are displacing. These sectors are far more capital-intensive.When early-career jobs become unstable, the transition into adulthood stalls. In China’s urban economy, stable employment has long been a prerequisite for marriage, housing and parenthood. Automation does not reduce fertility directly. It does so by narrowing the economic pathways that allow young adults to form families.“Lights-out” factories can run with minimal human presence. They keep production high while thinning the entry-level industrial routes that once absorbed young workers without university degrees. Those jobs once made it possible to rent a flat, save for a down payment, marry and start a family.02:58What might China do to address its record low birth rate and declining population?What might China do to address its record low birth rate and declining population?