Foreign firms dominate Chinese robotic sector

Few years after the Chinese government initiative to stimulate China's robotic sector, the local production firm is still struggling to compete with foreign firms. As the country minimum wage is increasing at 10 percent annually, manufacturers are shifting to automation in order to reduce the cost.

According to Federation of Robotics, China's 2014 industrial robotic market account for 25 percent of the world's sale. Ranking China among the biggest buyer of industrial robots. However, the country is failing to produce its own robot for their manufacturing giving plenty of rooms for a foreign firm to grow in the country.

After the government stimulus package, local company producing robot increase from 200 to 815 reported Reuters. The number of robots produced also increase from 3,000 to 15, 000 in just 3 years. However, it is noted that only 30 companies that are making a high impact research for this sectors while others are just borrowing foreign technology and adopting it into their own

Based on a report by Want China Times, China robotic sector is dominated by four foreign firms; ABB Group from Switzerland, Siemens from Germany and Japan's Kawasaki and Fanuc corp. These foreign firms make up 70 percent of the robotic supplier in China.

The Wall Street Journal reported that China current robotic usage is 23 robots per 10, 000 workers. Far less compared to South Korea and Japan which use more than 300 robots per 10,000 workers. The automotive industry is the leading user of robots for their production line.

According to Xu Fang, Head of Research in Siasun Robot & Automation a China based company, Chinese firm should try to produce their own technology instead of copying or assembling technology from overseas firm for their robot manufacturing. Failure to compete in this sector will force the China robotic industry to continue falling behind and end up like China Automotive industry. He noted that the country automotive industry had fallen behind and is now turning into an assembly line. He also urges the government to encourage the local firm to collaborate with a foreign institute for robotic research.

Ma Junqing, President for Chinese robotic firm DTMG acknowledge that the country is falling behind and there is a huge gap between local and foreign firm. This is due to the nature of many local firms that is new in this sector compared to foreign firms which have been doing research for years. However, he is optimistic that the company will be able to compete with others in just five years.