Rent Seeking in China's Robotics Industry

The Economic Observer looks at how many robotics companies there are in China. It finds there are many companies reorganizing and naming themselves robotics companies, such that China now boasts more robotics companies than the rest of the world combined. In reality, there may only about 800 total, with approximately 200 focused on the industry. Why are the thousands of other companies doing? Rent seeking.

April 23, the Economic Observer newspaper learned from authoritative way, after the adoption of the Commission by letter around the thoroughly research report of the Ministry of the latest industry data show that the national total of 800 robots enterprises, of which approximately 200 corporate body. The statistics have business registration write the name of the robot and the current robot did not do business, only a few people as well as the company's entrepreneurial team, or the actual robot business scale is small, and the robot business association like many small companies, excluded.

And a little earlier, data from the integrated information service platform Communications World Network Ministry in charge is given: As of April 20, 2016, the country with the "robot" in the name of the enterprise about 3400, which does not contain involved, but the name did not "robot" on the business, such as a large number of automated, intelligent equipment and UAV companies.

Some incomplete statistics from the private sector and local governments, as well as general judgment, or even higher. For example, in January 2015, the global robotics industry expert, vice president of the Robotics Society Luo Baihui Dongguan in Shenzhen, held a salon on investment, as of the end of 2014, the number of Chinese robot-related companies over 4000. And then in July, a report by the Shenzhen Municipal Committee led trade information released by the White Paper, by the end of 2014, only one place in Shenzhen professional robot enterprises reached 200, by expanding their business to get involved in robotics and smart products in the field of more than 3,000 enterprises are Family.

It appears that China's robotics industry has never been more crowded. Zhao Yong, CEO of China Robot Economic Observer calculations: 2015 China Robot sales of only 70,000 units, according to a count 200,000 yuan, the output value was more than 140 billion yuan, removing 85% of the proportion of foreign products, domestic product is only 2.1 billion yuan in sales. Even so, the Ministry of Statistics robot 800 enterprises with annual sales average of less than three million; and if replaced by large-caliber civil statistics, most companies called the robot, virtually no sales at all.

The reality is, there are still a large number of external capital and other businesses trying renamed, changing the scope of business and mergers and acquisitions investment, etc., were squeezed into the race. "China is now estimated average day for registration of several robotics company, this rate will soon be tens of thousands of corporate robot, already more than the sum of the rest of the world."

What are all the other companies doing, why are they in this industry?

More importantly, these places are given a real money signal - subsidies. Shenzhen, for example, from 2014 until 2020, the Shenzhen municipal finance will be arranged 500 million yuan each year, the seventh consecutive year grants robots, wearable devices and intelligent equipment industry. The Dongguan is scheduled in 2014-2016, the municipal financial arrangements for three consecutive years an annual budget of 200 million yuan, sponsored enterprises use advanced automation equipment for a new round of technological innovation, this is called "machine Substitution" program. The whole of Guangdong provincial government to be outdone, on April 18 this year, the province has just 2016 Industry and Information Technology development funds in the development of robot thematic funds of about 360 million yuan, reached at around the level to listing-related sectors.

Now, executives have begun to give target. April 26, 2016, the first five-year industrial plan is the "robot industry development plan (2016-2020)" came out, jointly issued by the Ministry of Industry, Development and Reform Commission, Ministry of Finance and other ministries. Deputy Minister of Industry and interpretation, said Xin Guobin, 2020, Chinese industrial robots annual output reached 100,000 units, service robots annual sales income over 30 billion yuan.

Some examples of different companies are given. One example of rent seeking is there are limits on some subsidies, so firms register 10 different companies to collect more subsidies, or they import foreign products to sell.

Insiders, who asked not to be named, symmetry, under profit-driven and the first (set) quantitative restrictions, some companies can register more than one company, the first sets of project funding application, or a company can apply for 10 units (sets) annual subsidy but if the 10 companies is 100 (sets) products can enjoy the subsidy. "This leads to the result that we sell 1,000 units of the product 100 money than others." A robot company official lamented.

Although the first sets of policy is the threshold, the product requires a variety of test reports endorsement, but due to technical complexity, many local governments do not recognize the ability. The sources said some of the lack of technology, funding, and resources of the enterprise, will be sold through OEM buy "white box," or use their factory production line technological transformation, to get the local government subsidy, which is already an open secret circle . "Some buy foreign products, but also to buy domestic, from parts to the whole, there is this phenomenon, change color change, a change of style, the last self-developed robot was born." The source said.

EO: 机器人补贴乱象调查 地方“大跃进”拉响过热警报