GUANGZHOU, May 25 -- Productivity in a Southern China manufacturing hub rose 17 percent last year while shedding 6.8 of their labor thanks to the adoption of automation and robots, the municipal government said Sunday.

Companies in Dongguan, Guangdong Province, began modifying their manufacturing processes late last year as labor supply in one of the world's largest manufacturing country began to shrink.

Rising labor cost resulting from a dwindling labor pool in China have hurt the competitiveness of products made by Chinese manufacturers. Multinational firms such as Nike are transferring their manufacturing base away from China to southeast Asia in search of cheaper labor.

A Standard Chartered survey conducted among nearly 300 manufacturers during the first quarter this year in the Pearl Delta Region in south China, including those in Dongguan, found that employers have expected wages to rise more than 8 percent this year.

Investment into manufacturing upgrades and growing use of automated production system also drove down the average production cost by 12.5 percent last year, the municipal government said.

In March, South China's Guangdong Province pledged to push nearly 2,000 companies in the region to replace human labor with robots as part of its three-year, 943 billion yuan industrial overhaul in the delta.

China is expected to have more robots operating in production plants than any other country by 2017, according to the International Federation of Robotics.