East China's industrial ba ses are turning to robotics to replace human labor as the region strains to upgrade its manufacturing sector.

Kunshan City in east China's Jiangsu Province has decided to become a vanguard in the transformation, focusing on the development of fully automated "smart" factories.

"With the disappearing effect of the population bonus on economic growth, it is pragmatic for industrial manufacturers to use more robots in the workplace to substitute human labor," said Xu Huimin, secretary of Kunshan Municipal Committee of the Communist Party of China on Friday.

He said the municipal government plans to help companies upgrade their industries. The municipal government will invest no less than 2 billion yuan (315 million U.S. dollars) in "incentive funds" annually over the next six years to boost industrial modernization, with production of Kunshan's intelligent equipment industry expected to reach 80 billion yuan in six years, he said.

Kunshan is known as China's industrial base for electronic engineering and high-precision machinery.

Rising costs from labor, energy saving and emission controls have squeezed manufacturing industry profits, leading to economic slowdown in the coastal economic powerhouse, which has prospered through export-oriented industries in past decades.

"We believe it is prime time to develop a robotics industry cluster in Kunshan by taking advantage of its industrial foundation," said Gan Zhongxue, a founding director of ABB Corporate Research Robot.

ABB is a world leader in power and automation. It relocated its global robotics headquarters to Shanghai in 2005 with an eye on China's rapidly growing robot market.

Gan said China has developed industrial chains for both manufacturing robots and intelligent robots.

At Foxconn's plant in Kunshan, more than 2,000 automated mechanical arms have been installed this year. Each industrial robot can substitute for the labor of three people in the workshop.

Yang Ming of Taiwan-based Foxconn Technology Group said the robots in its plant in Kunshan Wusongjiang Industrial Park can work 24 hours a day and have yielded direct economic returns of up to 300 million yuan.

Foxconn, supplier to some of the world's biggest tech brands, including Apple, is known for its gigantic labor-intensive factories in China, each employing tens of thousands of workers to assemble high-precision electronic gadgets such as iPhones.

The consultative committee advising the Chinese government on the "Made in China 2025" plan to upgrade the country's manufacturing sector proposed robotics in manufacturing as one of 10 priority industries on Tuesday.

The plan unveiled in May encourages domestic manufacturers to make technological breakthroughs in emerging industries in order to shift the country from low-end manufacturing to more value-added production.

Facing headwinds brought on by economic transfer, China's manufacturing industry has been under pressure to increase automation

There are 40 robotics industrial bases like Kunshan in China. Since 2014, robotics firms have opened at a pace of nearly one new firm per day.

Statistics released by the China Robot Industry Alliance (CRIA) show that the sales volume of China's industrial robots grew 58.9 percent year on year on average from 2009 to 2014, and the domestic sales of robots in 2014 reached 57,000 units, making the country the world's largest robot producer for two consecutive years since 2013.

In addition to the manufacturing sector, China's mining, petrochemical, coal and fireworks companies have been encouraged to use more robots and automatic equipment for dangerous jobs to reduce safety incidents.

In the service sector, the demand for robotics is also robust, with robots used in restaurants, shops, and nursing homes across the country. Home service robots are seen as a future trend for helping take care of the elderly as the senior population grows, with people age 60 or over reaching 212 million, or 15.5 percent of the total.

However, China still lags behind in the world's leading robot production technology. Chinese firms mainly assemble imported key components for robotics, said Xing Fei, deputy director of Nanjing Robotics Research Institute.

Xu Jianguo, director of the Shanghai Association of Robotics, said there are bubbles in the robotic sector. Many companies were set up in order to take advantage of favorable government policies such as land use and tax breaks given to boost the technology.

Industry insiders proposed the government set up an industry entrance threshold to better regulate the robot industry and establish a financial platform to help turn high-tech robotic research and innovation into commercial development.