China’s robotics market is poised for rapid domestic, global expansion

China's robotics market is making major strides thanks to a generous business climate and a domestic market that is largely unautomated and ripe for potential. The industry is also taking aim beyond their borders and looking to expand to Europe and North America.
By Jessica Twentyman, Vinelake June 4, 2018

Courtesy: Bob Vavra, CFE MediaMade in China 2025, which was first announced in 2015, outlines Beijing’s aspirations for the world’s most populous nation to dominate the global economy of the future in areas such as electric vehicles, satellites, and industrial robots. In the area of industrial robots, in particular, China is making impressive progress. Conditions are ideal in China for building a thriving robotics industry, serving both the domestic and overseas markets.

First, the government doesn’t stint on offering generous tax breaks and subsidies to robotics startups. Second, these companies have the potential to scale up quickly because the domestic market is so large and its economy so heavily industrialized, but thus far only patchily automated. Third, pressure from the government on Chinese manufacturers to automate and competition from other low-cost manufacturing markets is creating huge demand for industrial robots to boost efficiencies and lower costs. 

Startups and takeovers

All this means that ambitious annual goals set by the Chinese government for the manufacture of industrial robots don’t look unreasonable: 150,000 produced per year in 2020; 260,000 in 2025; and 400,000 in 2030. If achieved, the plan could generate $88 billion over the next decade.

At least some of those revenues can be expected to come from customers abroad. In February, three-year-old Chinese robotics start-up Geek+ Robotics, which builds robots for warehouse environments and works with major Chinese retailers and logistics companies, announced it had achieved the CE Mark approval for its systems that it needs to expand into Europe.

Growth in Chinese robotics systems isn’t just about promising startups. Despite the government’s aversion in recent years to outbound cashflows, Beijing seems prepared to make an exception when it comes to Chinese companies buying robotics companies from elsewhere.

In 2016, for example, the Chinese consumer products manufacturer Midea acquired Kuka. Kuka CEO Till Reuter has reiterated the company’s goal of becoming "number one in robotics in China." The two companies have announced plans to build a ‘robot park’ in Midea’s home district of Shunde, in Guangdong Province, with capacity to produce 75,000 robots and automated guidance vehicles (AGVs) by 2024, according to Reuters.

Other key M&A transactions over the last couple of years include ChemChina’s 2016 takeover of German company KraussMaffei; Chongqing Nanshang Investment Group’s acquisition of HTI Cybernautics of Sterling Heights, Michigan in October 2017; and in November last year, Huachangda Intelligent Equipment’s purchase of Robot System Products, a 2003 spin-off from ABB with 70 employees in Sweden, Germany, and China. 

Robotics powerhouse

In short, China looks on its way to becoming a robotics powerhouse-both as a buyer and a seller-and numerous statistics back this up.

On the buyer side of things, there is its "robot density" to consider. This is a measure based on the number of robot units per 10,000 workers in a nation’s manufacturing sector. According to the International Federation of Robotics (IFR), China’s development of robot density "was the most dynamic in the world" during 2016. Due to the significant growth of robot installations, the density rate rose from 25 units in 2013 to 68 units in 2016, an IFR report noted.

While today China’s robot density ranks at only 23rd worldwide, according to the authors of the IFR report, "The government intends to forge ahead and make it into the world’s top 10 most intensively automated nations by 2020." By then, China’s robot density should be more like 150 units per 10,000 workers and China will account for 40% of global robotics sales.

On the seller side, the Chinese government makes no secret of the fact that it would like the nation not just to become self-sufficient when it comes to industrial robots, but also to beat traditional sellers from elsewhere in the world to the biggest slice of global market share.

Certainly, China’s robotics bosses are setting their sights wider than the domestic market. The Robotics Industries Association (RIA) in the U.S., for example, recently has announced its first Chinese member, the Siasun Robot & Automation Company.

"We sought out a membership with RIA because we recognized that if we are to expand in North America and other countries, it’s important to have a relationship with an organization that can offer the support and connections we need to achieve our growth goals," said Dr. Daokui Qu, Siasun founder and CEO. China’s robotics ambitions prove the country has an enormous part to play in the future of automated and smart manufacturing.

Jessica Twentyman is an author at Vinelake, a CFE Media content partner. This article originally appeared here. Edited by Chris Vavra, production editor, Control Engineering, CFE Media, cvavra@cfemedia.com.

MORE ANSWERS

Keywords: robotics

  • Made in China 2025 is focused on expanding the country’s robotics industry.
  • The Chinese manufacturing industry is largely unautomated, which gives the country’s robotics industry a lot of room to expand.
  • The favorable market has many companies looking to expand in Europe and North America through mergers and acquisitions and through trade associations. 

Consider this

How will China’s expansion affect other countries and what are they doing in this growing market?