China establishes dominance in humanoid robot ecosystem

Accordingly, a report from Morgan Stanley said that China is far ahead of the West in terms of the scale of its humanoid robot industry, although it still lags behind in some important technological areas.

Of the 100 publicly traded companies globally identified as “directly involved” in the development of humanoid robots, 56% are based in China, according to Morgan Stanley analyst Adam Jonas. China also accounts for 45% of integrators, which specialize in customizing robots to meet real-world user needs.

Morgan Stanley highlights that one of the big challenges for Western investors is the lack of notable companies in the sector, beyond big names like Tesla and Nvidia.

The report points out that China is making the most impressive strides in humanoid robotics, thanks to strong government support, domestic supply chain advantages, and a business ecosystem ready to put the technology into practice.

"In our view, this is an important signal, reflecting the current state of the humanoid robot ecosystem, an ecosystem that could change significantly in the future," Morgan Stanley commented.

Currently, most humanoid robots are deployed in industrial environments, especially logistics and manufacturing, while others serve in research and education. Some humanoid robots have even been used for daily tasks in hotels in China.

As a testament to this rapid development, last January a group of humanoid robots performed a dance performance on China's national television CCTV's Spring Festival Gala, attracting the attention of a large audience.

China's decades of maintaining a strong heavy industry, while some Western countries have gradually retreated, has given Chinese robotics companies a significant advantage, analysts say.

Chinese companies “are excellent students of history,” said Mark Natkin, CEO of Beijing-based market research firm Marbridge Consulting. They understand that countries that started out producing cheap goods for the world have grown by steadily moving up the value chain.

With its massive scale of production, China has the wherewithal to experiment with automation solutions without worrying too much about disruption if something goes wrong initially, Natkin stressed.

In addition, the boom in domestic manufacturing also helps Chinese robot companies easily access industrial supply chains, taking advantage of available components to develop technology.

In its 14th five-year plan (2021-2025), China aims to become a "global center of excellence" in robotics technology innovation, with robot industry revenue growth reaching more than 20% annually.

Authorities may be pushing for robot development to maintain productivity amid a shrinking population, which last year saw a decline of 1.39 million people.

However, according to Morgan Stanley’s report, Chinese companies have yet to catch up in one important area of ​​the robotics industry: the production of high-end screws, which are essential components that convert the rotational motion of robot motors into linear motion, and which are currently dominated by European and Japanese companies.

The report pointed out that there is still a “large gap in performance, load capacity and precision” between high-end fasteners made in China and those from Europe and Japan. However, some Chinese companies have begun to enter this market, opening up opportunities to narrow the gap in the future.