Impact of AI and Automation on China's Labor Market

Abstract

This essay analyzes how automation and artificial intelligence affect China’s labor market, focusing on the differences between different sectors, skill levels, and groups of the population. The study has shown that although AI improves the competitiveness of industries and productivity, income inequality and job polarization were worsened, based on legislative documents, secondary data, and an analysis of Foxconn's production automation case study. High-skilled jobs benefit due to an increase in wage levels and demand, while low-skilled and repetitive work in manufacturing is most replaceable. The result in the service sector is diversified, as AI improves certain jobs, the values of others are weakened. Other than that, China’s objectives of social justice and shared prosperity are also threatened due to unequal distribution of rewards, as capital owners and urban elites benefit more. To decrease negative effects and ensure a fair transformation to a tech-driven economy, this essay promotes positive labor and welfare policies, including retraining of skills, inclusive social insurance, and equal regional development strategies.