Well, the last 40 years saw rising employment, not diminishing. Citing 40 years of development in this scenario is not valid since automation is a problem that has left even countries with highly skilled workforce perplexed. If China goes ahead with its plan to boost manufacturing with automation, it will cost jobs. There is no two ways about it. What remains to be seen is, in the absence of a democracy how much of the growth reaches the people.
I disagree. China's exports keep rising year after year (in Yuan terms, which eliminates currency fluctuations).
The last forty years is important, because you can still see the trend of rising Chinese exports on a monthly or yearly basis today. In contrast, the US incurred a trade deficit in 1970 and it kept growing. Thus, we have two separate trends. The US had a trade deficit in manufacturing for forty years and lost a lot of manufacturing jobs.
China is very different. China has seen a boom in exports after joining the WTO in 2001. The trend of ever-rising exports is still happening today. Thus, I do not see any meaningful decrease in Chinese manufacturing jobs. As I understand it, there is a shortage of blue-collar labor in China. This led Foxconn to automate in China.
The US relinquished the advanced-technological-product export-industry to China. There are two reasons for this. Firstly, the US places prohibitive licensing restrictions on its exports. One example is CNC machine tools. The US only allowed 500 CNC machine tool exports over three years. Secondly, US companies maximize profits in accordance with the demand of Wall Street. In contrast, Chinese companies only charge a fair price.
Since technology keeps increasing in sophistication, China is building an ever-increasing array of affordable high-technology products for people all over the world to buy. Consumer drones from DJI is one example. Another example is high-quality affordable 3D printers. A third example is affordable work tools, such as portable drills. You can see China's dominance of exports on Amazon.com. Many of the 3D printers and work tools are made in China.
Automation will reduce traditional manufacturing jobs, but its ultimate impact is unknown. For example, automation will create a multi-billion robotics industry within China to design new more-capable robots. Also, as more sophisticated industrial robots are developed, they will reduce the cost of advanced products. This means electric cars and every technological device will fall in price. This will enlarge the Chinese economy.
Finally, the displaced workers from the manufacturing sector can be retrained to work in the service sector. Baidu, Alibaba, and Tencent are doing well and they will need more employees for the service economy.