US Commerce Secretary Wilbur Ross was reported on September 27 as warning that the big subsidies China is giving to its approximately 400 robotics companies poses an emerging threat to the US economy. He said “Overcapacity is a big problem already and given the 2025 plan and the subsidies that it contemplates for a number of new industries, one of the worries that one has to have is that that may result in future overcapacity. For example in robotics, there apparently are something like 400 robotics companies in China right now and people in the industry tell me their estimate is that maybe 360 of those are in it to get the subsidies and tax breaks and are not really that serious about products.” China is in the midst of an unprecedented robot revolution, as it buys and builds industrial robots at a faster pace than any other country, helped by generous government support. The province of Guangdong, for example, has vowed to invest US$ 8bn in automation between 2015 and 2017, amid increasing wages and declining costs for robotic technology. Last year China installed 87,000 new industrial robots, with about a third produced by domestic companies, overtaking Japan to become the world’s biggest operator of the machines. Sales are expected to continue rising by 15-20 per cent a year, according to the International Federation of Robotics, an industry lobby group based in Germany. In addition to robots, Ross warned of the potential negative impact from China’s concurrent pushes to become a global leader in electric vehicles and semiconductors, crucial components for the electronic industry. He said the US “would be not comfortable with that being accomplished through disrespect for intellectual property rights, through forced localisation, through forced technology transfers ... Those are very big issues.” He identified problem areas as the need for better market access, both for companies operating there physically and for companies exporting there; requirement for less protectionist behaviour and mentioned “The US is actually the least protectionist of any major country, and China is one of the most protectionist:; and the need for respect for intellectual property rights.

(Comment: US Commerce Secretary Wilbur Ross was in China to prepare for a visit by US President Donald Trump in November. In Beijing he met Chinese Premier Li Keqianf, Vice Premier Wang Yang and Xi Jinping's economic advisor Liu He)