China's Fast-Growing Industrial Robotics Market
Growth Exceeded 136% in 3 Years
China is likely going to assume a globally leading position when it comes to industrial robotics.
According to the International Federation of Robotics, China’s pace for installation of multi-purpose robots rose by nearly 136 percent in just three years, from 2008 to 2011. Over 2012, that’s projected to grow another 15 percent, Gulf News reports.
That rapid growth can be contextualized when one considers that Japan uses 339 robots per 10,000 workers in manufacturing, while Germany uses 259. China only currently has 21, but the growth is exceptional.
China’s working class is, of course, changing fast as labor costs resist the government’s artificial suppression and begin to rise. China’s urbanization now exceeds 51 percent, and by 2020, the country will have a massive middle class of 600 million, whose rising ambitions the nation’s industries and market must somehow meet.
China’s greatest growth has been due to its legendary cost advantages, but that isn’t a sustainable model of growth. In 2011, the IMF showed China’s per-capita GDP to be $5,414; in other words, the country was at a crucial stage in its economic and social transformation.
When per-capita GDP hits $4,000, the society begins to move from a middle-income to a high-income one. Usually, this involves a radical shift from a labor-intensive economy to one that is tech-intensive—as was the case for Japan, South Korea, and most of the developed countries in the West.
China’s 1.3 billion-plus population suggests they need to make a similar shift, and fast.
When such a transition occurs, consumption goes up quickly. It’s possible that the size of China’s population will cause investment demand to rise by as much as $6.3 trillion within the next decade.
Today, China’s investment rate is a relatively high 50 percent, and the first three quarters of 2012 showed China’s final consumption expenditures hit 55 percent of the GDP. That suggests that the nation has, for the first time in a decade, seen its consumption contribution exceed that of investment.
Nevertheless, it’s unlikely that China is about to shift away from its manufacturing and infrastructure-intensive model, meaning the nation is probably going to keep focusing on industrialization and urbanization with periodic state subsidies at work.
The Industrial Automation Show 2012, which got underway in Shanghai on November 6, might offer some hints as to the scale of China’s robotics ambitions.
Major names like Yamaha (TYO: 7951), GSK, ABB (NYSE: ABB), Fanuc (TYO: 6954), Staubli showed off their robotic developments, and the exhibition—organized by Deutsche Messe AG, Hannover Milano Fairs China Ltd., and Shanghai Eastbest International Co. Ltd.—showcased a variety of cutting-edge industrial automation solutions, process automation technologies, industrial, IT, and microsystems technologies.
It’s safe to say that China is laying the groundwork for a major shift toward technologically improving its huge—and growing—society, and that industrial robotics will feature very prominently in that shift.
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