In another case of unthought-through consequences, the cheered-on push for a stronger Chinese currency and higher wages strengthens the competitiveness and quality of Chinese products through increased automation of assembly lines.
Bloomberg reports that Nissan, together with the joint venture partner Dongfeng, is building a 5 billion yuan ($732m) plant in Guangzhou with the newest in automation. The factory is scheduled to open in 2012. In addition, Nissan spent about 1 billion yuan ($147m) on a second production line with the latest equipment at their Zhengzhou factory.
This is not an isolated incident. “The automation rate in China is on the rise,” said Nissan spokesman Mitsuru Yonekawa. “We need to boost productivity in China,” COO Toshiyuki Shiga said. “Just because labor costs are higher in China, we won’t be leaving.”