Transcript: China’s race to tech supremacy — Robot generation

This is an audio transcript of the Tech Tonic podcast episode: ‘China’s race to tech supremacy — Robot generation’

James Kynge
On a warehouse floor in the Chinese city of Shenzhen, Guan Jian from the start-up Youibot is showing me his robots.

Guan Jian
In the engine room are those robots with bigger wheels running around, and also over there on the ceilings there are tracks and there are robots hanging on that.

James Kynge
There are big flat robots that glide around the floor and robots the size of small dogs with wheels and cameras that pivots around like huge eyes.

[AUDIO CLIP OF MECHANICAL SOUNDS]

But the robots Guan Jian is most keen to show me are the big robotic arms mounted on moveable platforms. They’re used in one of China’s most important industries today: making semiconductors.

Guan Jian
So maybe you can try to lift one of those.

James Kynge
Are these round things wafers?

Guan Jian
Yes, these are wafers. This is a silicon, pure silicon wafer. The thickness of this wafer can be down to less than 1mm sometimes, which means they become fragile. Fragile means we need to be very careful when we’re moving these boxes.

James Kynge
Traditionally, the job of moving silicon wafers between machines in a chip manufacturing plant is done by humans. But Youibot is at the forefront of replacing these humans with robots.

Guan Jian
Let’s just imagine when some human being, worker, human labour, wearing the whole suit in the clean room and trying to move these boxes, 10 hours a day and 24/7.

James Kynge
You’re going to drop one.

Guan Jian
Sometimes there is a glitch. So our idea is we use robots. The robot is able to control itself well, much better than the human. And also, it’s a clean room, let’s say. The sneezing or scratching are forbidden in those places. Especially sneezing. It’s hard to control, but one sneeze could cause damage. That’s pretty critical.

James Kynge
How many wafers could a sneeze damage?

Guan Jian
It depends where you sneeze.

James Kynge
Let’s say you sneeze on top of the wafers.

Guan Jian
If there’s an open cassette like this, if we sneeze to the open cassette, basically all of them are damaged.

James Kynge
And how much would that cost? I mean, how much would you lose?

Guan Jian
Oh, that’s a good question. In high-end semiconductors, one of these boxes costs over Rmb1mn, it’s around £100,000.

James Kynge
One sneeze could cost £100,000?

Guan Jian
That’s an expensive sneeze.

James Kynge
And of course, robots don’t sneeze.

Guan Jian
Of course.

James Kynge
Across China, robots are finding their way into factories and warehouses as part of a wave of automation. It’s supposed to make industries more productive and more efficient. But there’s another reason why Chinese companies are turning to robots to work in their most important industries. After decades of exploding growth, China’s population is starting to shrink and China is at risk of running out of workers. The Chinese are hoping robots will take their place.

[MUSIC PLAYING]

This is Tech Tonic from the Financial Times. I’m James Kynge. I cover China for the FT. And in this season of the podcast, I’m taking you to the front lines of China’s rise as a technology superpower.

In this episode, China is on a mission to become a world leader in robotics and to turn its massive economy, once reliant on vast amounts of human labour, into one powered by robots. They’re doing it to help tackle one of the biggest threats to Chinese prosperity and stability in decades: a demographic crisis that is only just beginning. The question is: can robots be the solution?

[MUSIC PLAYING]

In China today, robots are rapidly becoming an accepted part of everyday life as I found on my recent visit to Shenzhen.

[AUDIO CLIP OF PEOPLE TALKING]

James Kynge
I think that there are actually quite a lot of robots around in Shenzhen. And I’ve heard that there’s even a robot hanging out in our hotel lobby. I’m going to see if I can get it to deliver something to my room.

[AUDIO CLIP OF PEOPLE TALKING]

James Kynge
In the lobby, the robot is standing next to the reception desk, awaiting orders. It’s about 3ft tall, made of white plastic. And to be honest, it looks a bit like a big pedal bin. So with the help of the receptionist, I give it my room number and my mobile phone.

OK, so the hotel robot is now moving over to the lift, and it’s programmed to go to my room to deliver my mobile phone to me. I hope it manages, because that is . . . I don’t want to lose that phone. It’s now stopped just before the elevator doors. And somehow it’s going to open the elevator without pressing the button to take it upstairs. Yeah. It’s trundling into the elevator now and we are going up. Wow. That’s amazing. It’s somehow managed to activate the button for the fifth floor.

[ROBOT SPEAKING WITH ELECTRONIC VOICE]

James Kynge
So it’s just got a little message for us as we go up and now it’s going out of the elevator. We’re following, like, yeah, we’re following it past an actual human being there. We’re following it around the corner to my room. It actually looks like R2-D2. And now it’s stopped just outside the room. I’m going to open my door and it’s saying on the top, delivery arrived. And I’ve pressed open. Now I’m reaching in to retrieve my mobile phone. 

[ROBOT SPEAKING WITH ELECTRONIC VOICE]

James Kynge
And now it’s asking me to get on to the website and give it a star rating. And it’s trundling down the passageway now, going back to the elevator. So it wants a five-star rating. I give it five stars for that. Did it perfectly. I got my phone back. 

[ROBOT SPEAKING WITH ELECTRONIC VOICE]

James Kynge
So-called service robots are a growing trend in China. It means Chinese people are increasingly interacting with them. And Chinese tech start-ups are coming up with new ways to use them.

So there’s a coffee-making robot, a bubble tea-making robot, a cocktail-making robot, a bowl of noodles-making robot, ice cream-making robot. So you can get a robot for pretty much anything.

In a warehouse down a back street in a Shenzhen suburb, a start-up called RobotAnno is building robots with arms that can mimic the movements of a barista pouring out a flat white or a barman mixing your favourite tipple.

This is a cocktail-making robot. Lots of bottles stacked above around, sort of bar-shaped, and then a robotic arm.

[AUDIO CLIP OF LIQUID BEING POURED]

So it’s now got alcohol from these bottles and it’s now shaking back and forth quite vigorously. The cocktail, which is in like a metal bottle. And I think any minute now it’s going to tip the shaken contents into what is a plastic cup. Oh, look. And the robot is giving us a cheerful wave at the end. Actually tastes quite pretty good. Yeah. Thank you.

It might seem a bit of a gimmick, but these kinds of service robots are just the tip of the iceberg. China’s robotics industry is growing fast. There are Chinese start-ups springing up to make service robots for restaurants and hotels. And Chinese researchers working on humanoid robots that walk and talk like humans. But where China really wants robots to make an impact is in the factories that make up the country’s vast industrial manufacturing sector.

Guan Jian
These robots look more, how do I say it, smarter. Thermometer camera and also the air sensors. Different kind of air sensors integrated in one, sometimes with a robot arm to raise the camera to some different angles.

James Kynge
Youibot makes robots that are used in warehouses and factories across China. Guan Jian was showing me around their R&D centre where robots get put through their paces.

Guan Jian
The lifting models, like these ones, dive underneath to a shelf and lift that shelf up and move it to somewhere else. The other kind is these ones with robot arm on top of it. These robots are used in the semiconductor business, and on the left hand we see a use scenario of the lithium battery manufacturing.

James Kynge
For the past few years, China’s been investing heavily in automation. In 2022, it installed more industrial robots than the rest of the world put together. By combining robots with AI and 5G connectivity, China is building fully automated smart factories. Guan Jian says Youibot’s customers span everything from semiconductor manufacturers to warehouse logistics. Everyone is interested in automation.

Guan Jian
We are doing something to help the factory to transform themselves from industrial 2.9 to industrial 3.0, to the total automation, from the warehouse to the clean room and from the cleanroom storage to the equipment, everything’s handled by robots.

James Kynge
So how many people would you see in a semiconductor plant that is fully automated using these types of robots you’re showing us here?

Guan Jian
Well, let me give you two examples. The first example is the biggest fab factory in the world. And they have one of their factories here in China. They used to have 106 humans doing this transferring job before we put robots in there. When we put the first wave on the robot, it replaced 58 of those positions. And we believe we can reduce every single human transporter in that room.

James Kynge
And is that cheaper for the semiconductor fab factory?

Guan Jian
If we’re just comparing with the salary of that worker, it’s not so cheap. But the idea is not to save the salary for the factory. It’s always about the accuracy, the damage cost. This is what the factory’s concerned most. The customer is purchasing one wave after another. They are doing the repurchasement every single half of the year. This is a proof to us that it’s creating value.

James Kynge
But it’s not just that robots are more efficient. They’re also solving another problem for Chinese factories and warehouses: a shortage of workers.

Guan Jian
The most important fact is, even here in China, in Shenzhen city, my client told me in my face that they are lack of 50 per cent of the human labour this year. They can no longer get enough people. Just imagine wearing the whole suit and work in the factory without your cell phone, without connections with anybody for 10 hours a day and seven days each week. So that’s a hard job for human beings to do. And they have no enough people to do that. And the other example is in the lithium battery business, this is a booming market. Recent years we need 280,000 employees, 280,000 people extra to join the business. It’s a pretty typical problem that we are solving all around China here.

James Kynge
One of the reasons for this shortage is that Chinese people are richer and better educated than ever before. So manual jobs in boring factories just don’t appeal anymore. But it’s a problem that seems set only to get worse. China’s population, now at 1.4bn people, is starting to shrink.

Guan Jian
It’s pretty obvious the birth rate is getting down, which means whatever we do in the coming 18 years, at least, we are looking at a reduce of human labourers, especially young labourers for this kind of physical job.

James Kynge
This is one of the big motivations for China’s drive to automation. The question is whether robots are really the solution.

[MUSIC PLAYING]

One of the reasons that Chinese authorities are so keen on robots and automation is that after decades of growth, China’s population has finally started to shrink.

Wang Feng
Two years ago, in 2022, China embarked on an unprecedented historical upturn: the onset of population decline.

James Kynge
Wang Feng is a professor of sociology at the University of California in the US, and he’s a leading expert on demography.

Wang Feng
This is going to be a long, sustained and largely irreversible process. Now with that, we’re also seeing an accelerated ageing process of the Chinese population. So that really is fundamentally reshaping not only the Chinese demographics, but also every other aspect of the Chinese society, Chinese economy, and it has ramifications for the world as well.

James Kynge
The Chinese aren’t having enough children to keep the population stable. The Shanghai Academy of Social Sciences forecasts that the country’s working age population will have slumped to 210mn by the end of this century, down from today’s 1bn workers. That’s not all down to China’s infamous one-child policy, a policy that was scrapped in 2016. Wang Feng says there have also been deeper and more fundamental changes.

Wang Feng
So we’re looking at China that not only has experienced rapid economic growth, standard of living increase, but along with that, a massive urbanisation process. And we’re looking at a population which at end of the 1970s, only 20 per cent of the population were classified as urban, and now it’s close to 70 per cent. So we’re looking at a half of the population moving from the countryside to the city. And that’s a huge transformation in terms of how people live and how people work. And that affects people’s calculations and desires for having children.

James Kynge
The experience of living in fast-growing cities has made having children less appealing. Life in Chinese cities can be hard. There are long hours at work, small apartments with a lack of outside space. And many parents struggle with being away from the family and community support networks they left behind in rural areas.

Wang Feng
And along with that, there’s also the rapid increased cost of raising children. Young people are away from their families now, and they have to pay everything, from housing to healthcare to education for their children.

James Kynge
The other big change that has kept the birth rate low, Wang says, is the rapid expansion of education. It means starting your career later, getting married later and having fewer children.

Wang Feng
So all those pressures, the changes in people’s lives in the last 30, 40 years have laid the foundations for this monumental shift in people’s reproductive behaviour and outcomes. So that’s why we’re seeing this onset of population decline, and we’re going to see this continued ageing and population decline.

James Kynge
The government has been slow to respond to this, but demographers around the world say it represents the biggest challenge facing China today. Too many old people and too few young workers to support them. And so China is turning to robots to fill the gap.

[ROBOT SPEAKING IN ELECTRONIC VOICE]

Wang Guangneng
It’s a cobot arm. So you see a camera there, they can recognise the object and to pick from the chair and put the boxes on the pallet.

James Kynge
Wang Guangneng is the boss of Han’s Robot, based in Shenzhen. Their flagship product is a cobot or collaborative robot. It can do all kinds of tasks, from moving boxes around a warehouse to operating screwdrivers and welding. He has high hopes for his robots, convinced they will fill an important role in Chinese society.

Wang Guangneng
You know, China, the population is getting older and older, much less young generation, much more older generation. And for older generation, in traditional China, older people, they need their children to take care of them. For example, my parents, they need me to take care of them. But for me, I don’t expect my daughter to take care of me. (Laughter)

James Kynge
So who’ll take care of you?

Wang Guangneng
My robot baby (laughter). That’s my dream. When we started a robot business or anything, our dream is our generation, 1970s generation, when we get old, we will be taken care of robot.

James Kynge
What kind of robot will take care of you? Or many different robots, maybe?

Wang Guangneng
I think so. Most likely, I hope, a humanoid robot.

James Kynge
That might sound far-fetched, but last year the Chinese government announced its ambition to begin mass-producing humanoid robots by 2025.

Wang Guangneng
Society needs this, needs the robots to take care of many things.

[MUSIC PLAYING]

James Kynge
It’s easy to see why the Chinese government sees this as a logical fix to the country’s demographic problem. But the demography expert Wang Feng says it’s not going to be a silver bullet.

Wang Feng
It’s not a panacea. It’s a helper. There is great potential in automation to offset the shrinkage in labour force population. But when it comes to personal service, which will be increasingly more in demand given the ageing population, the robots can help with certain tasks. But I’m not optimistic at all they can replace or even assist with the need for human emotional interaction. And also even with certain personal care, functions, you still need to have humans. So in that sense, robots are not going to help with that aspect of ageing, the human needs.

James Kynge
The other problem with robots? Well, you can’t tax them. And that matters in a society where a shrinking workforce is expected to support an ageing population. According to Wang Feng’s research, by 2030, China will be spending its entire government revenue on pensions and other social benefits. But where’s that money going to come from?

Wang Feng
We are so used to tax individuals, labourers, for their income. Of course, you can tax companies, but would that have a negative impact in terms of desire to use more robots or investment. Right? So how to tax robots instead of human beings, it’s also a new topic.

James Kynge
Back at Han’s Robot, Wang Guangneng is still looking forward to a robot future for China.

In five years from now, what will the robots be doing in China?

Wang Guangneng
Wow. My forecasts always fail. In 2014 I forecast in 10 years, already humanoid robot everywhere. But now it’s not everywhere. I hope, I hope in five years, robot be everywhere — in factory, the hospital, retirement home, everywhere we need. I think in reality it may take even 10 years because the industry grows too slow, as I expected. So that’s why I ask our guys: work harder.

James Kynge
It’s not clear yet if robots and automation will solve China’s demographic crisis. We’ve never really seen what happens when a country as big as China starts to shrink. There is a theory that China’s whole economic success has been built primarily on its massive, cheap labour force. Now that is slipping away, some observers argue that China is destined for economic decline. So what’s at stake in this race to build robots and automate factories is the future prosperity of China. Only technology, China believes, can save it.

[MUSIC PLAYING]

In the next episode of Tech Tonic, I delve into the world of AI and ask a Chinese chat bot some challenging questions.

[AUDIO CLIP OF JAMES KYNGE SPEAKING TO A CHAT BOT]

So I asked: is Xi Jinping a good leader? And not surprisingly, Xi Jinping gets a glowing report.

And I go on a hunt for banned US chips in a Chinese market. She says the price of these Nvidia chips is so high she doesn’t dare tell me. I’m saying I just want to know the price. She’s saying it’s so high. I don’t dare tell you.

You’ve been listening to Tech Tonic from the Financial Times with me, James Kynge. Our senior producer is Edwin Lane. The producer is Josh Gabert-Doyon and the executive producer is Manuela Saragosa. Sound design by Breen Turner and Samantha Giovinco. Original music by Metaphor Music. The FT’s head of audio is Cheryl Brumley.