Harrison Po, senior manager of TrendForce’s photonics and innovative technologies research, said that China is losing demographic dividends and struggling to upgrade its industries. The Chinese government therefore regards robotics as a future growth driver of the country’s overall economy. Also, building a domestic robotics industry presents an opportunity for China to become one of the technologically-advanced manufacturing countries.

Spurred by a series of government initiatives, there are currently more than 500 robotics-related companies registered in China. Additionally, more than 40 companies listed in the China Concept Stocks are in the robotics industry. Po foresees growing domestic demand for industrial and service robots in the next 10 years as the country faces rising wages and aging population. To achieve its development goals, the Chinese robotics industry will have to increase its self-sufficiency in the production of key components and find application markets for service robots.

The Chinese market for industrial robots has become the largest in the world, but it is still under dominance of foreign robot makers. While there are domestic companies that assemble robots, but they lack in-house ability to produce advanced precision components such as reduction gears, servomotors, actuators and controllers. Hence, developing key technologies and component supply chains will be the initial steps that the Chinese robotics industry must take in order to become competitive.

On the other hand, China will be focusing on service robot market during the next five years, especially robots for advanced service applications (e.g. fire-fighting/rescue robots, surgery robots, smart public service robots and smart nursing robots). Again, these robots are to deal with the country’s rising labor costs and rapidly aging population. While China will continue to develop industrial robots, the country will also aggressively expand the scope of applications for service robots. Po expects that the demand for service robots in China will outstrip the demand for industrial robots.

Midea, a major Chinese home appliance maker, has recently sought to expand its stake in KUKA, a German industrial robot maker, to at least 30%. Midea’s motivation behind this deal is to increase automation in its production lines and improve logistics efficiency. Po added that if Midea succeeds in strengthening its ties with KUKA, it will have better capabilities in integrating industrial robots and in developing related system solutions. Midea now has a chance to become a model in high-end manufacturing within its home country.