China wants domestic companies to buy more locally made robots to lift productivity, but industry insiders have warned its policies are over-stimulating the market and that robot manufacturers were "coming up like mushrooms."
Government officials, worried that productivity growth may have turned negative since 2009, see the promotion of automation as a policy that will increase efficiency. Chinese manufacturers, struggling with increasing costs of labor, also favor more use of robots where possible.
The confluence of policy support and market demand made China the world's biggest buyer of robots in 2013, overtaking Japan.
At the same time, both central and local governments are encouraging new domestic players to capture market share from established foreign brands. In its five-year economic plan for 2011-2015, Beijing specifically targeted robotics as a key sector for development, hoping to create four or five domestic robotics "champion" firms to meet an annual production target of about 13,000 robots.
But Stefan Sack, CEO of robot manufacturer Comau Shanghai Engineering, warned that the government policies carried a risk.
"Government intervention can help industry to grow but it can also create bubbles," he said at a robotics industry conference, adding that small manufacturers in the sector were "coming up like mushrooms".
"Everybody wants to become a robot manufacturer now because it's sexy," Sack said.
The official Xinhua news agency reported on Monday that China now has 420 robot companies, adding that more than 30 industrial parks devoted to robotics were being built or were already functioning around the country.
Beijing's industrial policies have a history of going astray, most recently in renewable energy, where official endorsement of what was seen as a cutting edge technology resulted in duplicated investment around the country, ending in a wave of bad debt as profit margins were wiped out.