China AI-powered factory robots drive automation surge amid tariff war
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China is rapidly automating factories with AI robots, cutting costs and boosting production to stay competitive in global trade. Supported by government policy, this shift spans from small workshops to large "dark factories" like Zeekr’s.
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People shop at Taikoo Li Sanlitun in Beijing, China, Tuesday, July 2, 2024. (AP)
China is deploying artificial intelligence-powered robots across its factories at an unprecedented pace, transforming the country’s manufacturing capabilities and strengthening its position in the ongoing trade war, The New York Times reported.
These robots, maintained by engineers and electricians, are significantly reducing production costs while improving quality, giving China a competitive edge in the face of US tariffs and other trade barriers from the European Union, Brazil, India, Turkey, and Thailand.
China now has a higher density of factory robots per 10,000 manufacturing workers than any country except South Korea and Singapore, according to the International Federation of Robotics. This rapid automation, driven by government policy and substantial investment, is enabling China to sustain mass production even as its labor force ages and industrial job preferences shift.
Robots reshape small, large factories alike
According to the NYT report, robots are not limited to large factories; they are increasingly common in smaller workshops. Elon Li, who runs a metal workshop in Guangzhou, is investing $40,000 in a Chinese-made robotic arm equipped with AI. This robot learns by observing human welders and can operate around the clock, a stark contrast to systems that cost $140,000 just four years ago.
Larger manufacturers, like electric carmaker Zeekr in Ningbo, have dramatically increased their robotic workforce, operating 820 today, a sharp increase from 500 robots four years ago. In Zeekr’s facility, robot carts transport materials, automated elevators feed molten aluminum into casting machines, and teams of robotic arms weld car bodies in "dark factories," which operate without human intervention or lighting, the report added.
Maintaining quality through collaboration
Despite the automation, human workers remain essential for tasks requiring fine manual dexterity, such as installing wiring harnesses and inspecting surfaces. However, AI is now handling some quality control stages. Zeekr employs high-resolution cameras and computers to compare car assembly images to a database, identifying discrepancies in seconds.
"Most of our colleagues’ jobs involve sitting in front of a computer monitor," Pinky Wu, a Zeekr employee, told The New York Times, illustrating the shift in workforce roles.
AI is also used in design, allowing designers like Carrie Li at Zeekr to analyze surface intersections and focus on integrating fashion trends into car interiors.
China’s rise as a global automation hub
While car factories worldwide utilize automation, much of the equipment used globally now originates from China. Over the past two decades, China has been home to most newly built car assembly plants, fostering a robust domestic automation industry.
Chinese firms have acquired foreign robotics companies, such as Germany’s Kuka, and relocated much of their operations to China. For instance, Volkswagen’s new factory in Hefei uses 1,074 robots from Shanghai and only one from Germany, the NYT highlighted.
Beijing’s "Made in China 2025" strategy, launched a decade ago, prioritizes robotics among ten key sectors for global competitiveness. Government initiatives, including mandating carmakers to test humanoid robots, have accelerated progress in industrial automation.
National support and investment in robotics
Premier Li Qiang recently reaffirmed the government's commitment to "vigorously develop" intelligent robots. China’s top economic planners announced a $137 billion venture capital fund dedicated to robotics, AI, and advanced technologies.
Furthermore, state-controlled banks have lent $1.9 trillion to industrial borrowers over the past four years, financing new factories and modernizing existing ones.
China also benefits from a vast talent pool, graduating around 350,000 mechanical engineers annually, compared to 45,000 in the US. This educational edge supports the rapid growth of its automation sector.
Cornering the United States?
On top of its rapid industrial advancements, China is advancing plans to enable overseas delivery of certain commodities traded on the Shanghai Gold Exchange, a step aimed at boosting the global profile of the yuan and limiting dependency on US-controlled financial systems, as reported by The South China Morning Post.
This move is outlined in a newly released action plan by top Chinese regulators, including the People's Bank of China, the National Administration of Financial Regulation, the State Administration of Foreign Exchange, and the Shanghai Municipal Government. The blueprint aims to reinforce Shanghai's role in cross-border financial services, particularly in support of outbound investments and the Belt and Road Initiative.
"We will support the Shanghai Gold Exchange and other institutions in cooperating with overseas exchanges through product licensing, and expand the use of renminbi-denominated benchmark prices in major international markets," the agencies stated.
A core element of the plan involves exploring how physical delivery of certain products on the Shanghai Gold Exchange can be facilitated internationally by setting up offshore delivery and storage hubs. Altogether, 18 measures have been proposed to help Chinese businesses grow their global competitiveness, including the expansion of yuan usage, enhanced foreign exchange services, and broader reinsurance coverage tied to Belt and Road projects.
