The Economist: China’s humanoids are dazzling the world. Who will buy them?

Key topics:China’s Spring Festival Gala featured sword-wielding humanoid robots.China leads global humanoid production with 14,500 units in 2025.State support drives robot use, but most remain entertainment-only..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..From The Economist, published under licence. The original article can be found on www.economist.com© 2025 The Economist Newspaper Limited. All rights reserved..The Economist.The Spring Festival Gala is a showcase of both China’s cultural riches and its technological might. The four-hour state television programme, staged in Beijing on the eve of each Lunar New Year, often features goose-stepping phalanxes of singing soldiers. On February 16th the centrepiece was a troupe of sword-brandishing humanoid robots performing an elaborate martial-arts routine. It was one of four humanoid-embellished acts that wowed viewers around the world..China’s humanoid robotics industry is bustling. More than 14,500 automatons were delivered last year globally, up from around 3,000 in 2024, according to company reports and estimates from Omdia, a research firm. Nearly all came from China (see chart). Agibot and Unitree, the country’s two leading humanoid-makers, accounted for around three-quarters of the total; Elon Musk’s Tesla shipped just 150 of its Optimus bots. What is more, China is also home to the world’s deepest supply chain for humanoids.This worries some in the West who believe that humanoids will eventually become one of the largest industries in the world. Morgan Stanley, an investment bank, reckons that 1bn could be wandering about by 2050, with annual spending in excess of $7.5trn. For now, however, the path from back-flipping bots to a viable business is unclear. Most humanoids being purchased are, like those at the gala, purely for show. Few do any real work..Read more:.Musk says Tesla’s Optimus robots could go on sale next year.China’s state will probably remain the biggest source of demand for some time. Without local governments buying the machines, it would be difficult to keep the more than 100 Chinese humanoid-makers alive—along with the thousands of suppliers that increasingly rely on them. It is not the first time China has lavished money on a new technology before there is much of a market for it. But doing so in the case of humanoids could prove a costly waste.Behind China’s dancing robots is a rapidly expanding supply chain. Consider the Wujin district in the city of Changzhou. Its businessmen brag that around 90% of the parts needed to assemble a humanoid can be sourced there. Several known suppliers for Tesla’s Optimus hail from the district. RealMan, one of China’s largest makers of robot arms, quadrupled its production capacity in February when it opened a new factory in the area. At the sprawling facility a manager notes how the supply of land has tightened in the past year owing to new robotics plants opening up..Wujin is just one node in a vast supply cluster for humanoid robots that stretches from Shanghai on the coast inwards to the lower parts of Jiangsu province (including Changzhou) and the upper parts of Zheijang province (including its capital Hangzhou). The region, known as the Yangtze River Delta, is home to Agibot, Unitree and many other humanoid-makers. Of the top 30 listed Chinese suppliers of parts used in robots, three-quarters by market capitalisation are based in the area (see map). The cluster is also home to artificial-intelligence labs such as DeepSeek, which is located in Hangzhou. Based in that city, too, is Alibaba, a tech giant which this month released RynnBrain, an advanced AI model for powering robots.The region’s success reflects its role as an electric-vehicle (EV) hub, accounting for two-fifths of China’s production. High-torque motors, inverters, batteries, lidar sensors and other components are used in both EVs and humanoids, though their size often differs. In the past few years many suppliers to the EV industry, which is awash in overcapacity, have shifted at least in part to serving robot-makers. The region’s suppliers have also been investing in technologies once dominated by foreign firms. Fine Motion Technology, a maker of gearboxes, raised its share of the Chinese market for the rotating-vector reducers used in robots from a tenth in 2021 to a quarter in 2024, squeezing overseas rivals such as Japan’s Nippon Gear.Show your metalVisit the Yangtze River Delta and you will not have to look particularly hard to find a robot. One stands at a kiosk in downtown Hangzhou, serving coffee and other beverages. Botshare, a humanoid-rental service launched in Shanghai in December, supplies automatons to retailers who station them at their entrances to wave at guests as they enter. An Agibot costs more than 100,000 yuan ($14,500) but can be rented for as little as 2,200 yuan.The trouble is that, to become more than novel entertainment, robots need to be regularly deployed in settings where they do the same jobs as humans, allowing them to gather data on which they can be trained. That is why finding situations where humanoids can perform real work is so important for the industry, notes Alicia Veneziani of Sharpa, a Singaporean maker of robot hands that manufactures in Shanghai. A tiny fraction of the humanoids sold today end up in factories, where they often carry boxes—and are about 30-40% as efficient as a human at doing so.China’s state is eager to help. Local governments have been setting up centres that allow companies to put their robots to work on various tasks and collect data. Some is then pooled and shared. Shanghai has set up one such centre that can accommodate 100 humanoids. The state’s role is so pivotal that venture investors are picking robotics companies based not just on their technological capabilities but also on the local-government resources available to them, says one investor in Hangzhou.The state has also given subsidies to the industry. Robotics has become a priority for local officials across the country, who hope to get a share of the industry within their tax jurisdiction. But the government’s most important role by far is as a buyer. It was the biggest purchaser of humanoids last year, according to industry insiders, and will probably remain so this year and next. Most are being used as frivolous showpieces. Agibots have lately become a staple of government parties in Shanghai..Read more:.Andrew Kenny: Will robots replace us?.China’s strategy carries risks. Accompanying the robotics buzz is a sense among executives and investors that the industry is getting ahead of itself. Wang Zhongyuan of the Beijing Academy of Artificial Intelligence, a state-backed research lab, said in a speech last year that if mass production is not underpinned by real-world demand, public enthusiasm will be short-lived. If robots become widespread before they become useful, he explained, the humanoid bubble will burst. .Watch Bloomberg's Coverage of China's annual Spring Festival Gala below

The Economist: China’s humanoids are dazzling the world. Who will buy them?

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From The Economist, published under licence. The original article can be found on www.economist.com

© 2025 The Economist Newspaper Limited. All rights reserved.

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