China's New Generation of Workers Shipped Worldwide, America on Edge

Morgan Stanley has raised its projection for the humanoid robot market in China, with the global investment bank stating the industry’s transition from the demonstration phase to commercialisation is happening far faster than expected. In its latest report, Morgan Stanley estimates that shipments of humanoid robots in China will reach 50,000 units this year, nearly double its previous forecast of 28,000 units. The bank had already doubled its initial estimate of 14,000 units in January. Morgan Stanley predicts the market value of humanoid robots in China will reach US$2 billion this year and surge to US$15 billion by 2030, with annual shipments projected to hit 446,000 units by the end of the decade. These estimates only account for market sales and do not include robots used for prototypes, pre-order trials, or internal use. “Commercial verification, policy support, and supply chain feedback indicate that the adoption of humanoid robots in China is accelerating,” said Morgan Stanley equity analyst Sheng Zhong. Several local manufacturers are now racing to increase production capacity and have begun operating robots in various sectors, from factories and supermarkets to restaurants. The Chinese government has also made the development of embodied AI, artificial intelligence embedded in physical systems like robots, a priority for the next five years. Beijing is directing local governments to provide subsidies such as land and office space for startups, while also asking banks to offer financing on easier terms. According to data from research firm Omdia, around 13,000 humanoid robots were shipped globally last year, with Chinese companies occupying the top five positions in global shipments. US-based Figure AI ranked seventh and Tesla placed ninth. Tesla CEO Elon Musk previously stated that the company’s Optimus humanoid robot would only begin selling to the public by the end of 2027. Joe Ngai, Senior Partner and Chairman of McKinsey Greater China, believes humanoid robots could become the next major investment opportunity given the rapid technological development in China. “When you walk around [in China], you see many startups and more advanced companies, robots dancing. But the use of robots in the industrial sector often goes unnoticed,” Ngai said on the sidelines of the World Economic Forum Annual Meeting in Dalian. “If you visit any factory in China today, the automation and robots deployed there are more than anywhere else in the world,” he added. Morgan Stanley’s supply chain research also indicates that commercialisation of humanoid robots is progressing faster, particularly in the manufacturing and logistics sectors. The use of robots is also expanding into cashier-less retail stores and various interactive commercial services. Morgan Stanley identified Suzhou-based robotic component company Leaderdrive as one of the biggest beneficiaries of the rapid development of humanoid robots. The bank raised its 12-month price target for Leaderdrive shares to 464 yuan from 269 yuan previously. Leaderdrive supplies precision robotic components to Chinese humanoid robot manufacturers such as Ubtech and Galbot. Meanwhile, Chinese robotics companies are also beginning to aggressively expand into international markets. Shanghai-based Seer Intelligent, which began trading on the Hong Kong Stock Exchange on Wednesday, has been expanding its business overseas since 2021. According to Chief Operating Officer Jonathan Fan, revenue from more than 65 countries accounted for about 18% of the company’s total sales last year. However, Fan acknowledged that geopolitical uncertainty and trade tensions remain the biggest challenges for the company’s global expansion. “We are focused on geographical diversification to reduce dependence on a single market and ensure compliance with local regulations in every country where we operate,” he said. Policymakers in Washington are growing increasingly concerned about China’s rapid progress in artificial intelligence and the world’s growing dependence on technology from the country. In an opinion article published by Foreign Policy this week, Suzanne Nossel, Lester Crown Senior Fellow for US Foreign Policy and International Order at the Chicago Council on Global Affairs, warned that the United States risks falling behind if it focuses solely on the race to create new AI capabilities. “If Washington treats this competition purely as a race to achieve new capability benchmarks, the US could lead in invention but lag in influencing where and how AI is used around the world,” Nossel wrote. “A sales campaign for the American AI ecosystem will not be able to drive adoption quickly enough to keep pace with China’s speed,” she added.