‘The manufacturing boom in Guangdong is over’: Industrial robot makers the latest to get swallowed up by China’s economic slowdown

Manufacturers of industrial robots in the southern province of Guangdong, China’s manufacturing hub, are seeing declining profits as demand dwindles in tandem with the country’s economic slowdown. 

A senior salesman for LXD Robotics, one of the biggest robot makers in Foshan, a city of 7million people, predicted that only five per cent of the companies making such robots in the province would still be around in two years’ time.

This suggests the fault lines of China’s slowdown may run deeper than previously thought, given that the nation is said to be in the throes of an automation revolution, as makers look to robotics to overcome labour shortages and spur innovation amid rising wages and in line with a central policy this year touted by Premier Li Keqiang.

Early this year, authorities in the province said they would spend 943 billion yuan (US$149.93 million) to replace traditional manpower with the kind that require batteries or electricity, but which work tirelessly and never complain or ask for a raise.

As a result, many manufacturers of robots in the region set overly ambitious targets, while investment in this field was tipped to hit a record high.

But as the oppressive summer heat in this part of the world passes its peak, much of that optimism has now ebbed as sales targets are missed and revenue streams start to dry up.