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Friday, November 02, 2018
Beijing: The "Third Pole" of Robotics Industry in China
ANBOUND

The rapid development of China's robotics industry in recent years has attracted the world's leading robot manufacturers to land their business in China. On October 27, ABB Group, one of the world's four largest industrial robot manufacturing giants, announced a major, new US$150 million investment in Kangqiao, Shanghai to build the world's most advanced, automated and flexible robotics factory - a cutting-edge center where robots make robots. ABB estimates that the factory is expected to be completed and commence the operation by 2020 and it will become a "super robot factory" with an annual output of 100,000 units. Headquartered in Zurich, Switzerland, ABB Group ranks among the world's top 500 corporations; with its annual turnover exceeding US$33 billion and more than 130,000 employees. Together with Japan's FANUC, Yaskawa, and Germany's KUKA, it is one of the world's four major industrial robot manufacturers.

According to Shanghai Municipal Statistics Bureau, China's largest robotics industry clusters are based in Shanghai. In 2017, the total output value of 8 key industrial robot enterprises in Shanghai increased by 37% annually to RMB 36.37 billion, and their total output of 58,800 units which were nearly half of China's national industrial robot production. It is worth noting that China is already a key investment country of ABB. Since 1992, the accumulated investment amount of ABB Group in China has reached US$2.4 billion; the new factory in Shanghai will feature the production of robots by robots. Upon completion, the annual output of new factory will reach 100,000 units; it will become ABB's largest robotics R&D, production and application base in China. By then, the annual output of robots in Shanghai will be doubled, which would support the high-end manufacturing development in Shanghai, China.

The development of robotics industry in China has shown obvious regional characteristics. The industrial robot has the largest scale in the robotics industry; it has the best development, the largest scale, and most common application in Yangtze River Delta region and the Pearl River Delta region. Located at the eastern and southern parts of China, these two regions have become the "two poles" of development of robotics industry. It is noticeable that the Yangtze River Delta region and the Pearl River Delta region are the two most developed areas of China's manufacturing industry – their foundation of manufacturing industry has supported and attracted the development of industrial robots. According to incomplete statistics, by 2017, the number of robot-related enterprises in the Yangtze River Delta region was 1,271 units, with a total output value of RMB 86 billion. The global leading robotics enterprises have their headquarters or bases in the Yangtze River Delta, and the Yangtze River Delta has taken a leading position in the industrial robots industry in the country. ABB's increased investment in Shanghai will in turn strengthen the advantages of the robotics industry in the Yangtze River Delta region.

The Pearl River Delta is also a major region of industrial robots development. According to the 2017 China Robotics Industry Development Report that published by Chinese Institute of Electronics, the number of robot-related enterprises in the Pearl River Delta region was 747 units, with a total output value of RMB 75 billion. The robotics industry in the Pearl River Delta region is centered on Guangzhou and Shenzhen. This is due to Guangzhou and Shenzhen have advantages in control systems and their solid foundation in computerized numerical control (CNC) technic, thus, industrial robots are very common and applied in the industry production in Guangzhou and Shenzhen. To this, it emerges many well-known enterprises such as GSK, Googol Tech, Euro Kera, Jaten, Qihan, and Rapoo in Guangzhou and Shenzhen. The Pearl River Delta region also has a good foundation in the field of CNC machine tools; it has formed a relatively complete robot manufacturing industry chain, and its technic in the field of robot control and server systems are leading in China.

Besides the two major industrial robots industry in Yangtze River Delta and the Pearl River Delta, is there any opportunity to develop robotics industry in other parts of the country? What are the strategies to be adopted to develop robotics industry in those regions? According to the industry research team of Anbound, the Beijing-Tianjin-Hebei region has the potential to develop as a robotics industry center in the Northern China. Based on the Anbound research team's observation and survey, Beijing-Tianjin-Hebei region is entirely possible to become the "third pole" of China's robotics industry in Northern China, given the increases of investment, policy support and a differentiated development direction.

So, what could Beijing-Tianjin-Hebei region do to become the "third pole" of the robotics industry in China? In addition to the policy incentives, it is also important for Beijing to choose the right path for development as it is the core of Beijing-Tianjin-Hebei region. Specifically, first, Beijing should choose to develop service robots, medical robots and specialized robots to distinguish it from the industrial robotics industry in the Yangtze River Delta and Pearl River Delta. This is actually an industry choice that fosters strengths and avoids weaknesses. The production of industrial robots is currently the most mature, can be mass-produced, and need to rely on a solid industrial base. However, this is certainly not the direction of Beijing's development of the robotics industry with the goal of diversification. On the contrary, follow by the improvement of the robotics industry technology and the development of artificial intelligence (AI), the demand for service robots and consumer robotics will gradually increase. From the development history of other industries, those consumption oriented industries such as the automotive industry and the cell phone industry are often having the most explosive growth prospects.

Second, Beijing should choose software development and system integration in service and medical robots as its key development content. The reason for this choice is that Beijing has a huge service and consumer market, the service sector accounting for more than 80% of the total market output in Beijing; as many leading university are concentrated in Beijing, it has abundant intellectual resources and a solid foundation for research and development. In addition, the development of software and system integration is also related to the direction of Beijing's future industry. At present, the development scale of Beijing service robots and related basic artificial intelligence technologies are leading nationwide and this has provided Beijing a certain foundation in the development of software development and system integration in robotics.

According to relevant statistics, by 2017, the market size of China's home service, medical and public service robots was about US$530 million, US$410 million and US$380 million respectively. According to statistics, in 2016, China's specialized robot market reached US$630 million, with a growth rate of 16.7%. Among the specialized robots, the market size of military robots, extreme working robots and emergency rescue robots were US$480 million, US$110 million and US$40 million respectively. Although its current market scale cannot be compared with industrial robots, it has great growth potential in the future.

The industrial robotics industry in the Yangtze River Delta and Pearl River Delta is developing rapidly. At the same time, the Beijing-Tianjin-Hebei region with Beijing as the core is likely to develop as a service robot and medical robot center in Northern China and become the "third pole" in the development of the domestic robotics industry follow by the development of robotics and artificial intelligence technology.

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