Things look rosy for the burgeoning robotics industry in China.
The numbers are impressive.
China has been the biggest market for robotics since 2013. Demand and supply have grown in tandem.
Domestic brands are making headway gradually, accounting for 15 percent of the market last year, up from 11 percent in 2013.
Government estimates that by 2020, the country will need almost half a million robots a year, including new demand and replacements.
We are talking about a market that will be worth 300 billion yuan (US$46.3 billion).
But there is a flaw in the upbeat story.
China’s robot makers, like firms in most other industries in the mainland, fail to capture much of the value chain.
They tend to make low-end models and are reluctant to do their own research and development, undermining their chance to move up the industry ladder.
“We now have more than 4,000 robotics-related firms. But most of them are pursuing the beaten path, which is relying on imported parts, doing simple assembly work and expanding low-end capacity,” a senior official from the Ministry of Industry and Information Technology told the media.
“This business model weakens our ability to innovate. While we lack the ability to produce high-end robotics, we have too much low-end capacity at the same time.”
Advanced robotics is the product of extensive investment of time and money.
Unwilling to take the risk, most manufacturers tend to go for low-end to mid-range products and end up having no real core competitiveness.
As different regions rush to build their own robotics industrial parks, it is reported that some are already finding it hard to sustain demand for them and are planning to look for other projects to fill up the space.
China already has too many idle, outdated or low-end production lines in a wide range of industries churning out a huge amount of unwanted, unmarketable products.
At the same time, mainlanders are buying tons of foreign-made stuff, from rice cookers to toilet seats, from healthcare items to cosmetics, because the inferior quality of made-in-China products puts them off.
Hopefully, firms in the robotics industry can lose the old manufacturing mindset, put more effort into building key components themselves and develop advanced technology of their own.
That is the only way to avoid repeating the mistakes made by so many mainland industries.
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