Worries government investment in Chinese robot industry may be creating bubble

There
are concerns that China’s efforts to stimulate a local robotics industry could
be creating a surplus of manufacturers.

Reuters reports that China, which became the world’s largest buyer of robots last year,
has been trying to lift its lagging productivity through automation.

Beijing
has targeted robotics development in its 2011-15 five-year
plan, wanting to create four or five local “champion” robotics firms. It also
wants a third of robot sales to be of locally-made machines by 2015.

There
are fears that aggressive government investment in local robot companies – currently numbered
at 420 – may be creating a bubble.

“Everybody
wants to become a robot manufacturer now because it’s sexy,” Stefan
Sack, CEO of Comau Shanghai Engineering, told a recent conference.

“Government
intervention can help industry to grow but it can also create bubbles.”

An economist at
the Conference Board research house in Beijing was also quoted as saying
there was a lack of coordination between provincial economies in the
stimulation effort.

“They are
doing this at a point where wages are rising, but their comparative advantage
is still relatively cheap labor,” said Andrew Pol, according to Reuters. “They could be
pushing this too hard too early.”

China overtook
Japan in robot sales last year, with 36,500 units purchased, according to
International Federation of Robotics Figures, roughly a fifth of all sales
worldwide.

Sales
of robots to China have increased on average by 36 per cent a year from 2008-2013.

Image: AP