China Goes Wild Over Robots!

As we've been predicting for some time now, China's robot sector has exploded.

This isn't surprising as the continually rising cost of Chinese labor had been pegged in some quarters as being 25% to 33% more expensive than Mexican labor -- which is a huge difference when one also factors in time zones, shipping costs and local control.

As such, many American and Canadian firms have moved their manufacturing, especially higher-end manufacturing (think Cisco Systems) to Mexico over the last 3 to 4 years.

In response, China has moved heavily into Factory Automation, including robotics. This helps hold the labor wages down...but at what cost?

Currently in China there are huge wage gaps and wealth inequality and now fully mechanization is coming on while a true middle class has never had a chance to arise.

This is much different from what was seen / has been seen in the maturation of both Japan, Korea, Taiwan and the major Western economics.

According to International Federation of Robotics, nearly 180,000 industrial robots were sold worldwide in 2013, with a fifth of those sales being in China.

In 2013, China surpassed Japan for the first time to become the world’s biggest and fastest-growing robot market with sales of about 37,000 industrial robots .

Experts predict that China’s robot market will grow to be more than one trillion yuan in a year or two.

The Lucrative industry has attracted many investors who’re diving in. In Shanghai, a robot industrial park is currently under constructionan that’s expected to generate and send out around 60 billion yuan worth of products. Parks of the same scale are also being built in the cities of Shenyang, Qingdao and the municipality of Chongqing.

While this signals trouble and bumps ahead for many workers, it also shows how fast the Chinese economy is maturing and developing and will certainly lead to many consulting and coaching opportunities now and in the very near future.

Industrial robots, whose market in China is showing promising signs as workers get replaced due to higher labor costs. A lot of domestic robot manufacturers want to join the party and slice a piece of cake with foreign competitors. But they seem to be facing a tough road ahead.

It’s a common scene in many Chinese factories.

"Before the robots took over, there were seven workers working in this assembly line," Li Guolin, vice president of Air Conditioner Department, Midea Group, said.

Efficient, working 24-7, no need to talk, eat, or drink, and best of all, you don’t have to pay them.
There are more benefits to having robots working for you. They don’t get hurt.

"The injury problems are solved, and efficiency is improved," Sun Zhiqiang, president of Guangzhou Ruisong Technology, said.

And they take care of the labour shortage.

"It’s very hard to recruit workers in a hard working environment such as the chemical and steel industries, so there’s a lot of space for industrial robots," Zhou Chaosen, deputy secretary of Guangzhou Federation Of Robotics, said.

All of these reasons explain why the robot industry in China is seeing a great increase in recent years.

According to International Federation of Robotics, nearly 180,000 industrial robots were sold worldwide in 2013, with a fifth of those sales being in China.

In 2013, China surpassed Japan for the first time to become the world’s biggest and fastest-growing robot market with sales of about 37,000 industrial robots .

Experts predict that China’s robot market will grow to be more than one trillion yuan in a year or two.

The Lucrative industry has attracted many investors who’re diving in. In Shanghai, a robot industrial park is currently under constructionan that’s expected to generate and send out around 60 billion yuan worth of products. Parks of the same scale are also being built in the cities of Shenyang, Qingdao and the municipality of Chongqing.

It’s not all good news though. According to International Federation of Robotics, more than 90% of the industrial robot market in China is dominated by foreign companies, and the key parts of robots for the rest less than 10% of the domestic market are made outside of China. For domestic robot manufacturers, they face a lot of challenges such as lacking key technologies and competition from foreign businesses. There is a lot to do to take up the lucrative, young market in China.

ChinA Embrace robots! >>