The Coming Revolution of Chinese Robotics

By Dan Steinbock   

A few years ago, Chinese robotics market was dominated by foreign industry leaders. Today, China is the largest robotics market and about to become the leader in robotics production.

 

The emerging robotics industry is booming in China. The move to advanced technology is aligned with the government plan – “Made in China 2025” – to upgrade China’s manufacturing base. In turn, the development plan for the robotics, issued in April, seeks to accelerate Chinese robotics with breakthrough products in 2016-20.

Nevertheless, critics argue that the emergence of the robotics is sustained mainly by subsidies doled out by local governments.

What is the role of Chinese robotics in the global industry and will it survive on its own?

 

Dramatic Expansion of Chinese Robotics

China’s robotics boom is often explained by rising costs and aging demographics. Yet, the latter are only part of the big picture. In the mainland, the robotics boom has been fuelled by several forces, including demographics (growing engineering talent, declining factory-age work force, aging work force), increasing costs (rising wages, costs of training and housing), and favourable financing (low-cost loans, factory incentives, investment by foreign tech giants that manufacture in China, including Foxconn and Apple).

By 2014, robotics sales soared in China, which became largest market of industrial robots with a share of 25% of the global total.

Furthermore, the boom has been driven by government policies (central government encouragement, local government mandates, tax credits), rising quality requirements (ramping of auto makers for export), and the emergence of early adopters in China (expansive middle class with disposable income, more capital–intensive companies).

 
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Dr Dan Steinbock is Guest Fellow of Shanghai Institutes for International Studies (SIIS). This commentary is based on his project on “China and the multipolar world economy” at SIIS, a leading global think-tank in China. For more about SIIS, see http://en.siis.org.cn/ ; about Dr Steinbock, see http://www.differencegroup.net/