China aims to boost robotics industry

Blueprint for sector to be drawn up

China is mulling a five-year plan to boost its fledgling robot manufacturing industry, an official at the Ministry of Industry and Information Technology (MIIT) said on Monday.

The industry watchdog will design a blueprint for the robotics technology sector as part of the country's 13th Five-Year Plan (2016-20), Xinhua News Agency reported on Monday citing Su Bo, vice minister of the MIIT.

"The plan is likely to be more like guidance, telling potential market players what kind of market it will be, which stage of robot development China is in, and what the technological gap is compared with foreign counterparts," Yao Zhiju, deputy secretary-general of the China Robot Industry Alliance, told the Global Times on Monday.

Amid the global shift from manufacturing to automation, integration and energy-saving, there is an increasing application of industrial robotics in machinery, construction materials, food, aeronautics and shipbuilding.

China's current robot market value is estimated to be less than 100 billion yuan ($16.26 billion), yet the growth potential is large given the need for the country's industrial transformation, Yao noted.

Hoping to gain a share of the potential domestic market, some foreign companies have already made moves in China, including Switzerland's ABB, Germany's Kuka Robot Group and Japanese firm Fanuc Corporation.

Control of key robot parts by foreign firms and prejudice against home-made products are hampering the development of the robot industry in China, Yao said.

Another challenge is that users often have only a vague idea about the application of robots, and to improve productivity they need to change their whole production line and ecosystem rather than just spending heavily on a few machines, he noted.

China's ambition to move up the value chain and improve productivity as a global manufacturing hub is prompting the country to develop its robotics technologies, Wang Xin, a principal at management consultancy Roland Berger China, told the Global Times on Monday.

The plan will most likely focus on high-end smart robotics interconnected with upstream and downstream industries, rather than packaging robots with fixed programs doing repetitive tasks, Wang said.

The market for high-end robotics in China will be worth between 500 billion and 1 trillion yuan by 2025, he said.

China has become the world's largest buyer of industrial robots, as rising labor costs and increasing competition have forced manufacturers to use more automation. The country bought 36,560 industrial robots in 2013, equal to one in five robots sold globally and an increase of over 60 percent from 2012, according to the Frankfurt-based International Federation of Robotics.

Robotics protocol for interconnection and complex control systems as well as upgrading of workers' labor skills remain the major challenges, Wang said.

However, government guidance - which can suggest political preference for an industry - may also create the risk of overinvestment, similar to what happened with the wind and solar power industries in recent years, Luo Jun, CEO of the Asian Manufacturing Association, told the Global Times Monday.

There are already signs of overcapacity in low-end robots in China, according to media reports.

The majority of Chinese manufacturers produce low-end robots and parts, while key parts such as speed reducers and motors are monopolized by foreign firms.

To foster indigenous Chinese robotics technologies, the government needs to support major enterprises to develop the robots that meet the needs of the market rather than fancy concept designs, he noted.

Utilization of the robots may take away some jobs, but it will optimize the structure of the labor force, Luo said.

One risk is that users might overestimate the benefits of robotics and underestimate the potential negative impact of automation.

Foxconn, a major supplier for Apple's iPhones, announced in 2011 that it planned to have 1 million robots in operation by 2014. Yet it subsequently scaled back its plan, reportedly saying that robots were unable to replace workers as effectively as expected.

About 1,000 Foxconn workers reportedly went on strike in Chongqing in early October, protesting against low salaries and less overtime, which they believed was partly due to improved productivity through automation.