Demographic changes are the main reason why countries are investing in the field of robotics. China is facing the dual pressures of rapid aging and the refusal of young people to take factory jobs: official predictions in 2021 indicate that there will be a 30 million labor shortage in the manufacturing industry by 2025.
The situation may be more severe - The Economist Think Tank predicts that China's labor force will shrink to 645 million by 2045 (a 19% decrease from the peak of 794 million in 2013), and by then the proportion of the labor force will be less than 50% of the total population for the first time (based on a total population of 1.3 billion). For an export-oriented economy, this may jeopardize the goal of doubling GDP per capita in 2035 compared with 2020.
Against this background, local giants from BYD to Xiaomi have accelerated production line automation. Although China's installed base of industrial robots ranks first in the world, most of them are low-tech robotic arms for repetitive tasks such as welding, spraying, and assembly. This market is currently dominated by a few manufacturers in Japan, Germany, and Switzerland.
However, as technology advances, the landscape is about to change. Driven by breakthroughs in AI, chips and hardware, China and the United States are competing for humanoid robots that can be deployed in factories, restaurants, hospitals and even homes.
NVIDIA CEO Jen-Hsun Huang recently predicted that humanoid robots will be widely used in manufacturing within five years; Tesla CEO Elon Musk even called them "the most important product in history" and predicted that their number will soon exceed that of humans - although the billionaire has repeatedly been inaccurate in predicting the popularity of technologies such as fully autonomous Teslas and brain-computer interfaces.
Analysts at Bank of America predict that global annual shipments of humanoid robots will reach 1 million units by 2030, driven mainly by industrial demand and early applications in educational services. Li Ming, director of automotive and industrial research for the agency's Greater China region, predicts that the average model price will be about US$20,000, corresponding to a market size of US$20 billion. Pushing forward another 30 years, the bank predicts that the global stock of humanoid robots will surge to 3 billion units, replacing half of the labor force in the service industry.
This optimistic scenario refers to the historical trajectory of smartphones and electric vehicles: in the ten years to 2023, sales of smartphones and electric vehicles in China will grow at an average annual rate of 90%. Falling component costs and strong government support have boosted the development of electric vehicles - and now China is making every effort to upgrade its manufacturing industry.
However, the development of general-purpose robots still requires major technological breakthroughs: they need to have the ability to adapt to a variety of environments, perform most tasks that humans can complete, and interact with people in real time. Existing machine learning and generative AI models are far from this goal—large text-based language models, for example, cannot train machines that need to process visual data.
Nonetheless, the technological race is already heating up: In the United States, Tesla launched a prototype of its second-generation Optimus in 2023 and plans to mass-produce it this year. Nvidia, which has a market value of US$3 trillion, also has multiple projects in progress.
In the Chinese camp, companies such as Yushu Technology and UBTECH invested by Alibaba have commercialized their products. In 2023, Yushu launched a consumer-grade humanoid robot with a price of less than US$20,000. The robot group dance performance in the Year of the Snake Spring Festival Gala even aroused nationwide astonishment. UBTECH Walker robots have been deployed in Jikrypton and BYD factories to perform higher-level tasks in collaboration with humans.
Early success was due to a mature supply chain system. China leads the world in the field of electric vehicles, and there is a high degree of synergy in technologies such as vision systems, sensors, and batteries. Electric car companies such as Xiaopeng, which were the first to adopt humanoid robots, have announced that they will start mass production next year.
However, the country still relies on many components from foreign companies, especially reducers used to reduce motor speed while increasing torque. However, local suppliers, led by Green Harmony (Leaderdrive), are catching up through economies of scale, price competitiveness and technology upgrades, and the government is also strongly supporting the industry with high subsidies.
Even so, China's robotics industry may soon encounter obstacles. The United States still leads the world in the fields of software, AI and chips - companies such as Yushu Technology rely on Nvidia chips. Given the military use of robot dogs, China’s emerging companies and supply chains may be subject to U.S. sanctions. U.S. lawmakers have warned that Chinese robots are the "next threat" and that China's first-mover advantage in the robot competition may face severe tests. (little)