Technology gap gives foreign firms the edge in China robot wars

admin   •   September 21, 2015   •   97348

A Baxter robot of Rethink Robotics picks up a business card as it performs during a display at the World Economic Forum (WEF), in China's port city Dalian, Liaoning province, China, September 9, 2015. REUTERS/JASON LEE

A Baxter robot of Rethink Robotics picks up a business card as it performs during a display at the World Economic Forum (WEF), in China’s port city Dalian, Liaoning province, China, September 9, 2015.
REUTERS/JASON LEE

In a cavernous showroom on the outskirts of this port city in northeastern China, softly whirring lathes and svelte robot arms represent Dalian Machine Tools Group’s (DMTG) vision of an automated future for Chinese manufacturing.

On closer inspection, however, most of the machines’ control panels bear the logos of Japan’s FANUC Corp or the German conglomerate Siemens.

The imported control systems in DMTG’s products – used in the assembly of everything from smartphones to cement trucks – are symbolic of the technology gap between Chinese and foreign industrial automation firms, just one of several challenges facing China’s ambition to nurture a national robotics industry.

Chinese robotics firms are also grappling with a weakening economy and slumping automotive sector, and industry insiders already predict a market bubble just three years after the central government issued policies to spur robotics development.

“Last year everybody thought they could produce a robot,” said Alan Lee, director of Asia sales and business development at Boston-based Rethink Robotics. “When you have market saturation you’ll have filtering and M&A. These guys will be the first layer to suffer.”

It is a storyline familiar from other new industries such as solar panels: Beijing’s policies and subsides trigger a wave of low-margin, low-cost contenders to rush into the market, where, with no meaningful technology of their own, they struggle to compete on price alone.

A year after analysts predicted the unstoppable advance of Chinese robot makers, executives at foreign companies now say they are well-positioned to weather any temporary blip in demand as manufacturers tighten capital investment while waiting to see how China’s economy fares.

ROBOTICS EXPLOSION

To be sure, foreign or domestic executives alike say they believe in China’s commitment to upgrade its manufacturing sector and the potential of the domestic robot industry to grow into a leading force in the long run.

With wages rising as much as 10 percent a year, Chinese policymakers have said they fear labor shortages of as high as 30 percent in some areas and are keen to help automation along.

Chinese-made robots deployed have surged from an estimated 3,000 in 2012, when the central government began introducing automated manufacturing proposals, to 15,000 last year, according to the International Federation of Robotics.

The growth rate for foreign-made robots has been slower, but they still dominate Chinese factory floors, with numbers increasing from 22,000 to 41,000, during the same period.

Subsidies have sparked an explosion in the number of Chinese robotics firms from 200 to around 815 in two years, according to OFWeek, a Chinese robot industry news site and research center.

But at most 30 of those firms have done any meaningful research and development, said Wang Baomin, senior analyst at Shenzhen-based consulting firm MIR Industry.

“Companies that get subsidies through connections are cruising without feeling any competition or fully grasping the technology,” said Wang.

“I’m afraid robots will walk down the path of China’s solar industry, with its market development distorted.”

Xu Wenjiu, an executive at Shenzhen-based robot maker LEN, expects a third of domestic robot firms to collapse within three years because many do not have the ability to offer after-market maintenance for products that break down.

TECHNOLOGY GAP

Foreign robot makers are sanguine about the profusion of Chinese rivals – at least for now.

Gu Chunyuan, the China head of Zurich-based ABB Robotics, a leading robotics firm along with the likes of Germany’s Kuka and Japan’s Yaskawa, downplayed the threat of Chinese competition, saying his firm held a significant technological advantage.

The company also ships many “naked” robots to Chinese firms who resell a customized final product to factories.

In Dalian, DTMG’s president, Ma Junqing, acknowledged there was an “obvious gap” between Chinese firms and foreign competitors in robot and automation technology.

But he said his firm, which specializes in automated machine tools, had been making advanced robot arms for only three years and hoped to catch up with Japanese rivals in three years and German competitors within five.

“The complete product chain takes a long time, as does researching technology and developing the market,” said Ma, whose firm has longstanding government links and receives subsidies and loans.

Still, domestic firms like Shanghai Siasun Robot & Automation are seen as making advances in robot technology, while companies like DMTG and rival Shenyang Machine Tool Co are investing to expand beyond traditional machine tools into more sophisticated products.

Rethink Robotics’ founder Rodney Brooks, who has consulted for local Chinese governments, predicted that the champion of Chinese robotics may emerge from an unexpected quarter, given the level of investment and technology required.

He named e-commerce giant Alibaba Group Holding Ltd, which has invested in robotics with hardware manufacturer Foxconn and Softbank, as a contender, much like how Amazon Inc has become a major robotics player in the United States.

“It may not be the traditional players but the transformation is still going to happen in China,” Brooks said.

(Reporting by Gerry Shih and Beijing newsroom; Editing by Alex Richardson)

Senate probe on AFP-Dito Telco deal sought

Robie de Guzman   •   September 17, 2019

MANILA, Philippines – Some senators are seeking to probe a deal signed between the Armed Forces of the Philippines (AFP) and China-linked Dito Telecommunity Corp. (formerly Mislatel Consortium) amid concerns that the agreement could pose a threat to national security.

Opposition Senator Risa Hontiveros on Tuesday said she has filed Senate Resolution No. 137 after Department of National Defense (DND) Secretary Delfin Lorenzana stated that he was not aware of the said agreement, which allows Dito Telecommunity, the country’s third major telecommunications player, to rent spaces where they can set up equipment and other facilities inside military bases across the country.

Dito is a company comprised of Udenna Corporation, led by businessman Dennis Uy, and China Telecom.

“Is there now a ‘sign first, worry about security later’ policy under this administration?” Hontiveros said in a statement.

“Ito na ang pangalawang beses na hindi nakonsulta ang defense secretary tungkol sa mga diumanong Chinese deals na pinapasok ng ating pamahalaan na may seryosong implikasyon sa ating pambansang seguridad,” she added.

Hontiveros further said that entering into a deal with a Chinese-linked firm is “irresponsible” amid continuing maritime disputes between the Philippines and China in the West Philippine Sea.

“Sa isang panahon na patuloy ang panghihimasok ng Tsina sa West Philippine Sea, napaka-iresponsable na pumasok tayo sa mga kasunduan sa kanila na hindi sinusuri ang epekto nito sa ating pambansang seguridad at kaligtasan,” Hontiveros added.

(In this time when China continues to infiltrate the West Philippine Sea, it is irresponsible for us to enter a deal with them without scrutinizing its effects on our national security and safety.)

The senator cited Article 7 of China’s National Intelligence Law which states that Chinese organizations and citizens are obligated to support “state-intelligence gathering efforts.”

Hontiveros said that under China’s law, Chinese corporations cannot refuse to assist such acts of espionage, since its Counter-Espionage Law requires that “when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.”

“There is an urgent need to determine whether or not the presence of Chinese facilities in military bases and installations undermines national security and whether or not the lease agreements entered into for this purpose comply with applicable law,” she said.

The lawmaker added the agreement may be violating the Public Land Act which states that “military reservations cannot be subject to lease, occupation, entry, sale, or other disposition, until declared alienable by provisions of the Act or by proclamation by the President,” and the AFP Modernization Act, which states that any “sale, lease or joint development of military reservations must be authorized by Congress.”

Senator Francis Pangilinan agreed with Hontiveros’ sentiments.

In a statement, Pangilinan pointed out that two high-ranking government officials, Lorenzana and National Security Adviser Hermogenes Esperon, have earlier raised concerns on issues involving China, including the proximity of Chinese-dominated offshore gaming operators’ hubs to military camps and the influx of thousands of its nationals in the country.

“Hindi biro itong China telco involvement dito sa ating military camps,” Pangilinan said.

(This Chinese telco’s involvement in our military camps is no joke.)

“Ang concern: gagamitin nung Chinese government yung information na nakukuha [at] dumadaan doon sa kanilang mga sistema para itulak ang interes ng China,” he added.

(The concern is the Chinese government will use the information that passes through their system to advance China’s interests.)

The senator stressed the security risk is not a mere speculation, citing the move of other countries such as Australia, the United States, Japan and New Zealand to ban Chinese telecom giant Huawei due to security concerns.

READ: Pangilinan questions deal allowing Chinese-linked Dito Telco to build facilities in military camps

Pangilinan said he will raise these concerns during the hearings on the budget proposal of the AFP and the DND.

“We will ask clarificatory questions regarding this deal. And we will look into this because popondohan natin ang AFP, DND,” he said.

The military earlier allayed these concerns while Malacañang said the country can simply leave the deal if this poses any threat to national security.

Pro and anti-Beijing supporters face off at shopping mall

Jeck Deocampo   •   September 13, 2019

Pro-Beijing supporters flooded into a Hong Kong shopping mall waving China flags and singing the Chinese national anthem on Friday (September 13) where they were confronted by with anti-Beijing groups.

The confrontation came hours before a city-wide Mid-Autumn festival celebration where demonstrators are set to carry lanterns and form human chains on the scenic Victoria Peak, an area popular with mainland Chinese tour groups. The human chain is also due to be formed on Lion Rock which separates the New Territories from the Kowloon peninsula.

The anti-China demonstrations started in June in response to a bill that would have allowed people to be sent to mainland China for trial in Communist Party-controlled courts, but have broadened into calls for democracy.

China says Hong Kong is now its internal affair. It denies meddling in Hong Kong and has accused the United States, Britain and others of fomenting the unrest.

Britain says it has a legal responsibility to ensure China abides by its obligations under the Joint Declaration. (REUTERS)

P53-M misdeclared agri-products from China seized in Manila Port

Robie de Guzman   •   September 11, 2019

MANILA, Philippines – Nearly P53 million worth of misdeclared agricultural products from China were seized by the Bureau of Customs (BOC) in the Port of Manila.

The BOC said the products that were shipped inside 16 containers arrived in Manila last August 8.

The shipment was consigned to a certain Shinerise Trading Service. It was initially declared as fishballs.

However, upon inspection of the containers, the BOC found that the shipment contains carrots and onions estimated to worth P40.1 million, broccolis worth P10.04 million, and P2.5 million worth of potatoes.   

The bureau has issued a warrant of seizure and detention against the said shipment.

The BOC also cancelled the accreditation of the Shinerise Trading Service and its broker was placed under investigation.

The confiscated agriculture products will be destroyed as these did not have necessary clearance as proof that these items are safe for public consumption, the BOC said. RRD (with details from Correspondent Aiko Miguel)

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