Page 202 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
battery production facilities are being installed to meet In 2016, China unveiled an ambitious plan to triple its
the increasing demand for electric and hybrid cars (IFR). annual production of robots used in the manufacturing
sector to 100,000 in five years. It also aims to sell more
Conditions are ideal in that country for building a than US$4.6 billion worth of service robots by 2020 amid
thriving robotics industry, serving both the domestic and the increasing use of assistant robots in an aging society
overseas market. Not only is the government offering (China Daily, Nation Gears). However, Chinese industrial
generous tax breaks and subsidies to robotics startups, robotics vendors only have 30 percent market share in
but these companies also have the potential to scale the domestic market. One reason is Chinese robotics
up quickly because the domestic market is so large and suppliers are still lagging in terms of key components.
its economy so heavily industrialized but thus far only They must still source key robotics components from
sporadically automated. The government is pressuring international companies. For example, the top reduction
those that are not so that they can compete with other gear vendors mainly are in Japan, while German firms are
low-cost manufacturing markets, which is creating huge in the leading position for gripper and machine vision
demand for industrial robots to boost efficiencies and technology. These key components are essential to the
lower costs. All this means that ambitious annual goals competitive advantage and cost margin of robotics
set by the Chinese government for the manufacture manufacturers (Francis).
of industrial robots don’t look unreasonable: 150,000
produced per year in 2020; 260,000 in 2025; and 400,000 Household Electrical Applicant
in 2030. If achieved, the plan could generate US$88 billion
over the next decade. At least some of those revenues can China’s kitchen appliance market expanded robustly
be expected to come from customers abroad. Despite in recent years. According to mainland market surveys,
the government’s aversion in recent years to outbound the total value of China’s kitchen electrical appliance
cash flows, Beijing seems prepared to make an exception market exceeded 100 billion yuan in 2016. Major products
when it comes to Chinese companies buying robotics include range hoods, water heaters, gas stoves and rice
companies from elsewhere. China’s robotics bosses are cookers. In the long run, urbanization is expected to drive
setting their sights wider than the domestic market. The steady expansion in the kitchen appliance industry. As
Robotics Industries Association in the US, for example, has of 2016, China’s urbanization rate stood at 57.4 percent
recently announced its first Chinese member, the Siasun and is projected to go up by about one percentage
Robot & Automation Company. It’s far from clear what the point annually. Advances in urbanization, the real estate
final result will be of the current trade conflicts between market and smart home appliances are conducive to
China and the US, but it seems unlikely to put a major the development of the kitchen appliance market. As
dent in China’s robotics ambitions (Twentyman). The consumers’brand awareness continues to heighten, more
market volume of China’s industrial robots is expected emphasis is being placed on product design, functions
increase to US$5.9 in 2020, up from US$4.2 billion US and features, while price sensitivity is falling. Medium
dollars three years earlier (Xinhua, Industrial Robot). to high-end products are becoming the mainstay of the
consumer market, while the demand for eco-friendly and
China is expected to become the world’s largest energy-efficient kitchen appliances is also growing, as
single market of industrial robots, with total shipments consumers’ environmental awareness increases (HKTDC,
of 134,000 in 2018, based on ABI Research’s forecast. China’s Kitchen).
In 2017, China’s Robotics market was worth of US$6.28
billion, with an average growth rate of 28 percent from As the biggest home appliance exporter of US,
2012 to 2017, among which, industrial robots was worth China accounted for half of global home appliance exports
of US$4.22 billion, and service robots, US$1.32 billion. (parts and accessories excluded) to the US, with some
With Chinese robotics companies making breakthroughs categories taking a particularly high share, for instance,
in foreign technological monopolies, and the great window air conditioners and microwave ovens within
domestic demand of robots, China’s industrial robotics major home appliance market more than 80 percent,
industry should grow exponentially. Chinese companies and within portable appliance market, vacuum cleaners,
are primarily making investments and applications in food processors and coffee makers more than 70 percent,
the service robotics industry such as medical service, hair dryers and irons more than 80 percent, electric hair
financial service, storage, logistics service, and customer clippers and bread makers more than 90 percent. The
services (GRE). US, as China’s largest importer of home appliances, takes
202
battery production facilities are being installed to meet In 2016, China unveiled an ambitious plan to triple its
the increasing demand for electric and hybrid cars (IFR). annual production of robots used in the manufacturing
sector to 100,000 in five years. It also aims to sell more
Conditions are ideal in that country for building a than US$4.6 billion worth of service robots by 2020 amid
thriving robotics industry, serving both the domestic and the increasing use of assistant robots in an aging society
overseas market. Not only is the government offering (China Daily, Nation Gears). However, Chinese industrial
generous tax breaks and subsidies to robotics startups, robotics vendors only have 30 percent market share in
but these companies also have the potential to scale the domestic market. One reason is Chinese robotics
up quickly because the domestic market is so large and suppliers are still lagging in terms of key components.
its economy so heavily industrialized but thus far only They must still source key robotics components from
sporadically automated. The government is pressuring international companies. For example, the top reduction
those that are not so that they can compete with other gear vendors mainly are in Japan, while German firms are
low-cost manufacturing markets, which is creating huge in the leading position for gripper and machine vision
demand for industrial robots to boost efficiencies and technology. These key components are essential to the
lower costs. All this means that ambitious annual goals competitive advantage and cost margin of robotics
set by the Chinese government for the manufacture manufacturers (Francis).
of industrial robots don’t look unreasonable: 150,000
produced per year in 2020; 260,000 in 2025; and 400,000 Household Electrical Applicant
in 2030. If achieved, the plan could generate US$88 billion
over the next decade. At least some of those revenues can China’s kitchen appliance market expanded robustly
be expected to come from customers abroad. Despite in recent years. According to mainland market surveys,
the government’s aversion in recent years to outbound the total value of China’s kitchen electrical appliance
cash flows, Beijing seems prepared to make an exception market exceeded 100 billion yuan in 2016. Major products
when it comes to Chinese companies buying robotics include range hoods, water heaters, gas stoves and rice
companies from elsewhere. China’s robotics bosses are cookers. In the long run, urbanization is expected to drive
setting their sights wider than the domestic market. The steady expansion in the kitchen appliance industry. As
Robotics Industries Association in the US, for example, has of 2016, China’s urbanization rate stood at 57.4 percent
recently announced its first Chinese member, the Siasun and is projected to go up by about one percentage
Robot & Automation Company. It’s far from clear what the point annually. Advances in urbanization, the real estate
final result will be of the current trade conflicts between market and smart home appliances are conducive to
China and the US, but it seems unlikely to put a major the development of the kitchen appliance market. As
dent in China’s robotics ambitions (Twentyman). The consumers’brand awareness continues to heighten, more
market volume of China’s industrial robots is expected emphasis is being placed on product design, functions
increase to US$5.9 in 2020, up from US$4.2 billion US and features, while price sensitivity is falling. Medium
dollars three years earlier (Xinhua, Industrial Robot). to high-end products are becoming the mainstay of the
consumer market, while the demand for eco-friendly and
China is expected to become the world’s largest energy-efficient kitchen appliances is also growing, as
single market of industrial robots, with total shipments consumers’ environmental awareness increases (HKTDC,
of 134,000 in 2018, based on ABI Research’s forecast. China’s Kitchen).
In 2017, China’s Robotics market was worth of US$6.28
billion, with an average growth rate of 28 percent from As the biggest home appliance exporter of US,
2012 to 2017, among which, industrial robots was worth China accounted for half of global home appliance exports
of US$4.22 billion, and service robots, US$1.32 billion. (parts and accessories excluded) to the US, with some
With Chinese robotics companies making breakthroughs categories taking a particularly high share, for instance,
in foreign technological monopolies, and the great window air conditioners and microwave ovens within
domestic demand of robots, China’s industrial robotics major home appliance market more than 80 percent,
industry should grow exponentially. Chinese companies and within portable appliance market, vacuum cleaners,
are primarily making investments and applications in food processors and coffee makers more than 70 percent,
the service robotics industry such as medical service, hair dryers and irons more than 80 percent, electric hair
financial service, storage, logistics service, and customer clippers and bread makers more than 90 percent. The
services (GRE). US, as China’s largest importer of home appliances, takes
202
