Chinese Dominance of Robotics
Another Industry of the Future to be Dominated by China
The machine tool industry, and the subset of robotics, are and will be crucial to the ongoing ability of the industrial sector to lift productivity and maintain competitiveness. The leading nations in the machine tool industry are China (one third), Germany and Japan (an eighth each), the the US and Italy (a twelfth each); with a quarter for all other nations. China’s global dominance of manufacturing industry, still fast economic growth and low energy costs, together with the ease with which its corporations integrate hardware and increasingly advanced software put it at a significant advantage to Germany and Japan.
The fastest growing part of the machine tool industry is that of robotics, in which China enjoys a 40% market share. According to Morgan Stanley, China’s robotics industry is set to grow at a compound growth rate of 23% a year to US$108 billion by 2028; from US$47 billion in 2024. As Hua Bin notes:
Separate data published by China’s National Bureau of Statistics on Monday revealed that the country’s industrial robot output surged 35.5 per cent year on year in May, reaching 69,056 units, while service robot output jumped 13.8 per cent to 1.2 million units …
China dominates the global robotics landscape, accounting for over half of the world’s industrial robot installations last year – 7 times that of the US.
He continues:
China is home to 741,700 robotics-related companies, including front runners such as Shenzhen-based DJI and UBTech Robotics, Hangzhou-based Unitree, and Shanghai-based AgiBot.
DJI is estimated to have 70% global consumer and commercial drone market. Unitree claims over 60% global market share in quadruped robots and is known as the DJI of robots. It is also a world leader in the most sophisticated humanoids.
And China is providing robots at much lower cost, with massive demand driven by Chinese manufacturers that are installing more robots than the rest of the world; driving increasing efficiency improvements and facilitating greater competitiveness. China will not replace its workers with robots, it will increase efficiency to offset a falling workforce while displacing workers from other countries.
The nation’s humanoid robotics market is forecast to grow at a compound annual rate of 63% per year, from US$300 million in 2025 to US$3.4 billion in 2030. This is where the humanoid robotics revolution will take place, not in the laughable antics of Tesla. And not even in a US which is well behind the leaders, where even the leading US-based human robotics company, Boston Dynamics, is owned by South Korean Hyundai. Notice that in the above video that the Tesla humanoid robot was on static display, showing that its’ previous “displayed” capabilities were much more sham performances than reality.
The Morgan Stanley report states that humanoid robotics are already helping to reshape Chinese manufacturing, and will help drive unprecedented gains in productivity and quality. Gains that will help maintain GDP growth as the population starts a slow decline, and help Chinese manufacturers gain an even greater lead over their Western competitors. Morgan Stanley predicts 252,000 humanoid robots in China in 2030, and 300 million in 2050; one third of the global stock.
The scariest part of the Morgan Stanley report for Western nations should be where it compares the rise of Chinese humanoid robotics companies to the trajectory of the Chinese EV industry, with China rapidly taking a dominant global position. Given the central role of the automotive industry in the use of robotics, such an outcome should not be surprising. Perhaps the most worried should be the German Mittelstand of small and medium firms that dominate the German robotics industry, and the Italian small and medium sized dominant Italian producers. They may be overcome by the scale of the Chinese competitors and by the ease with which those competitors integrate both hardware and software (including AI), together with their rapid pace of new product innovation.
The ongoing collapse of the German and Italian automobile manufacturing sectors will certainly be a severe problem for German and Italian robotics companies. And as with so many high technology industries, China dominates the supply chain.
China is either dominating, or moving to dominate, the industrial sectors of the future. The shock to the West over the next five to ten years will be profound, as the realization that the five century period of Western intellectual, industrial and military dominance is truly coming to an end.