Chongqing is a powerhouse in China's automotive and electronic industries. Foxconn, HP, Changan, and Ford are all located in the Municipality. Chongqing seeks to develop a new strategic industry: Robots. By 2020, the industry may generate 100 billion RMB! This report looks at how this could happen and the challenges the local government faces.

1. Industry Update: Robotics
Industry in Chongqing
M
According to the China Robot Industry’s 13th Five
Year Plan (released in April 2016), China’s
domestic industrial robot sales will reach 150,000
units a year by 2020, with service robots becoming
a 30 billion RMB industry (see Table 1). In 2015,
China’s robot market was estimated between 100 to
150 billion RMB. By 2020, this will grow to
between 200 and 300 billion. China currently has
low robot levels compared to other countries (see
Table 2). For example, China’s auto industry has
around 305 machines for every 10,000 people,
while Japan has 1,414.
Chongqing has recently placed robots and smart
manufacturing among its top 10 strategic industries
for growth.* In 2015, Chongqing output for this
sector was around 10+ billion RMB. By 2020,
Chongqing is seeking to create a 100 billion RMB
industry consisting of robots, robot parts,
automation equipment, software, vocational
education and after service products. Chongqing’s
robot sector will be a mix of both industrial robots
and service and collaborative robots.
Industrial Robots: The main consumers of robots
are in the automotive and electronics industries,
consuming more than 60% of all industrial robots.
Robot categories in these areas include industry
robots and 3D printers. Robot functions include
assembly, coating & bonding, cutting, measuring &
testing, welding, polishing & grinding, and
palletizing & order picking.
Service and Collaborative Robots: Service robots
can be divided into individual/home use robots
(including education and taking care of elderly) and
specialized robots (defense, medical, logistics, and
drones) (see Table 3). Collaborative robots are
robots that interact with humans in a shared
workspace.
Table 1: 13th Five-Year Plan (2016-2020) - Robotics
July 2016
Table 2: Amount of Robots per 10,000 workers
305
1141 1149
1414
17
89
161 211
China United States Germany Japan
Amount of Robots for every 10,000 workers
Auto Sector Other Industries
*Chongqing’s strategic industries include core electronic components, new energy vehicles and intelligent cars, networks, robotics and intelligent equipment,
high-end transportation equipment, environmental protection industry, MDI and new chemical materials, biological medicine, new materials, and shale gas.
Robots: A Strategic Growth Industry
* Source - "2016--2020 China's robot industry investment
* Source - Barclays Equity Research 2016
2015 2020 2025
China Industry Robots
(Annual Sales- Units) 66,000 150,000 260,000
China Industry Robots
(Units Retained in
Market) 180,000 800,000 1,800,000
Market Share of
Domestic Robot
Companies 33% 50% 70%
Percentage of
Domestic Robot Parts
in Supply Chain
Less than
30% 50% 70%
Service Robots Market
Size (billion RMB) 5+* 30
* Source - Barclays 2016
Forecast 2015-2018 (#
of Robots Sold)
Home Use Robots 25,900,000
Education Robots 9,000,000
Defense 58,800
Collaborative Robots
49,000
(2020 Forecast)
Logistics 14,500
Medical 7,800
Table 3: China Robot Sales Forecast (units)

2. Chongqing’s key pillar industries include
automotive, electronic industries, and equipment
manufacturing (see Table 4). These three
industries combined will create a large demand for
industrial robots (robot purchases growing at 20%
per year). Over the next 5 years, experts believe
Chongqing will purchase 45,000 industrial robots.
CRIA (China Robot Industry Association)
suggests that currently more than 60 per cent of
robots made by domestic companies were low-end
models, performing simple jobs like polishing,
welding, and loading/moving heavy freight. As a
result, domestic companies only control 15% of
China’s industrial robot market (See Table 5).
Chongqing’s robot industry has more than 100
companies and produced 1000+ industrial robots
in 2015. While some domestic robot companies
produce robot bodies, the majority focus on
assembly, systems and processing (See Table 6).
To hit its 2020 goal of generating 100 billion
RMB in the robot industry, Chongqing must
attract companies with superior technology. A
number of robot industry parks have been
established in Chongqing to attract robot
companies and investment (See Chart 8).
Currently, Liangjiang and Yongchuan are the front
leaders, with Jiangjin, Dazu, and Bishan also
aiming to foster their own robot industries. Key
companies that already are in Chongqing include
Kawasaki and EMG Precision Machinery.
Like Chongqing, many cities have implemented
similar goals to hit a 100 billion RMB in output
from the robot industry (Dongguan, Nanjing),
with some seeking 200 billion RMB (Luoyang,
Henan). In addition, there are more than 40 robot
industry parks throughout China that are offering
tax incentives and low cost land. According to
reports, in the past two years, a total of 77 local
governments have pushed policies to encourage
robotics.
Key Industries*
2015 (billion
RMB)
2020E (billion
RMB)
Automobiles 460 800
Electronics** 407 800 to 1000
Equipment Sales 339 432.6***
Growing Chongqing’s Robot Sector Table 4: Chongqing Pillar Industries
2015 2020E
Robot Body Market 38 95
Robot Systems Market 76 189
Robot Parts Market 6 15
After Services Market 0.4 1
Service Robot Market 5 30
Other (Education) 0.1 1
Total 125.5 331
Table 5: Robot Market for China and Chongqing
(billion RMB)
2014 2015
Global Industrial
Robots 229,261 240,000
China Industrial Robots 57,315 66,000
Robots made by
Domestic Companies 16,000 22,257
Robots made by
Chongqing Companies 800* 1000*
• Chongqing’s Motorcycle Industry market is less than these
industries (estimated at 30+ billion RMB and declining).
• Electronics includes notebook computers, desktop computers,
monitors, tablet PCs, and mobile phones from name-brands
such as HP, Acer, Founder, and Asus.
• *5% Annual Growth Estimate. Growth in equipment will be
affected by the city’s automation rate. Chongqing’s automation
rate for key industries will increase from 65% this year to 75%
in 2018.
• Source: news.xinhuanet.com/politics/2016-06/17/
c_129070709.htm
• Foreign Robot makers control more than 85% of the market
(Fanuc, Yaskawa, ABB, Kawasaki, Kuka, Denso, Epson)
• Source - www.gz.xinhuanet.com/2016-01/19/c_1117824333.htm
• Source: http://www.visiondragon.com/Show_News.asp?id=174
Table 6: Robot Market Forecast for China (billion
RMB)

3. * Chongqing’s robot industry parks are part of the Chongqing’s government robot plan ”Chongqing Robotics and Intelligent
Equipment Industry Cluster Development Plan (2015 - 2020)”
* Bishan has announced larger targets but has not announced any major robot companies investing in its district in the past
year.
# of Robot
Related
Companies
City/District
2015 GDP
(billion RMB)
Key Robot Players Located in
Park 2020 Production Goals
2020 Market Size Goals
(billion RMB
Chongqing
Municipality 150+ 1,571.90
Develop a robot industry
(R&D, Testing, and
manufacturing) with world
class standards 100+
Chongqing
Liangjiang Robot
Industrial Park 30 202.0
Shenzhen Schroder, Beijing Uptech
Robot, Shenzhen Xrobot, HIT
Industrial Robot Kawasaki Robot
10,000 units of industrial
robots, 1 million service
robots, 1,000 special robot 30+
Yongchuan Robot
Industry Ecosystem 105 57.0
Guangzhou Shukong, EMAG
Machine Tools, LK Group,
Chongqing Hua Shu
Industrial and Service
Robots base for
Chongqing 20+
Bishan Industry
Park 10+ 38.2
Suzhou Alfa Robot, Chongqing Re
Gu Robot
Focus on specialty robots,
robotic arms, robot parts. 5+**
Chongqing
Shuangfu New Area
(Jiangjin) 10+ 60.6
Chongqing Sheping, Chongqing
Yuan Pu, Chongqing Shan Lian,
Chongqing Hua Shan, Chongqing
Yu Cai, Heping Automation
Robots for Electronics
Industry NA
Dazu robot
Industrial Park 10+ 34.9
Ha Gong Robot, Shenzhen Luo Bo
Tai Er Robot, Guo Yang
Robots to modernize Dazu
economy 5+
Banan Chongqing
Economic Zone 10+ 56.8
Banan Xin Qi Machinery, Chongqing
Jin Tai Aviation Drones Automotation NA
Table 7: Chongqing Robot Parks - Analysis
Local governments are giving robot companies and
manufacturers attractive subsidies (See Table 8 for
Chongqing). Guangdong, for example, has a plan to
give more than 2000 manufacturers subsidies to buy
robots (600 in 2015, 650 in 2016 and 700 in 2017).
These subsidies are estimated to be around 10 to 20
percent of a company's robotics purchases.
Dongguan City, which is trying to build its own
robot industry, set aside 200 million yuan to help
companies buy robots, capping the amount each
firm can get at 5 million yuan (in addition to
promoting financial leasing as a way to help SMEs
purchase robots).
The aim of these subsidies is to develop robot
companies to a certain size (above 500 million
RMB in revenues) that they can support their own
research and development departments. If
companies scale, they can also attract investment
either from investors or from listing on a public
market.* The end goal is for a local company to
acquire competitive domestic and international
component manufacturers so they no longer need to
import components from foreign countries, whose
steep tariffs increase the cost of robots (See Table
9).
• Some manufacturers will falsely report sales to gain
subsidies. In 2015, Shenzhen-listed Wuhan Huazhong
Numerical Control HNC, falsely stated it sold robots to Gree
Yubei (Part of Liangjiang)
* R&D Research - (Max 10
Million RMB Yearly)
* Equipment for R&D - (3
Million RMB Yearly)
* Sales Subsidies - (Max 5
Million RMB)
Yongchuan
* Subsidies on long
term and working
capital loans
(including guarantees)
(500,000 RMB)
* Grants to encourage
enterprises to purchase Yongchuan built robots
and CNC machine tools (500,000 RMB)
* Grants for improving supply chain (200,000
RMB)
* Grants of up to to encourage large scale
industries over 500 million in revenues (200,000
RMB)
Table 8: Subsidiaries for each company established in
Chongqing districts:
http://robot.ofweek.com/2016-06/
ART-8321202-8120-30000562.html

4. Challenges for Chongqing’s Robot Industry:
Chongqing will face strong competition, technology
constraints, and human resource challenges.
Foreign Robots: As mentioned above, the majority of
industrial robots consumed today in Chongqing are
foreign robots. This is due to local companies lacking
key technology, including key robot parts such as the
speed reducer (See Table 9). Due to this technology gap,
Chongqing’s top companies such as Ford, Changan, HP,
Foxconn and Suzuki mainly purchase foreign robots for
their production lines. Given this competition, domestic
robot companies are forced to first focus on basic
applications such as handling and palletizing for
medium sized manufacturing companies. Chongqing
robot companies likely will focus on medium sized
companies in the die-casting industry, which uses CNC
machines.
Domestic Competition from Seacoast Areas: 50%
of China’s listed robot companies are based in
Shanghai, Guangdong, and Zhejiang (See Table 10).
Another study examined more than 100 robotic
companies and found the majority were also in the
seacoast. Nearly half of these companies were
focusing in the service robot industry (see https://
www.therobotreport.com/map)
Technology and Capital: Since domestic robot
companies have to buy or license robot part
technology like the speed reducer, most of their
business is in systems integration, which is estimated
to be a 10% gross margin business. With most robot
companies earning less than 100 million RMB a year
in China and Chongqing, financing R&D or
purchasing technology to move up the value chain
will be a challenge. Chongqing Industry Parks are
trying to focus on providing financing to these
companies, including the use of financial leasing as a
financing tool. Listed companies have more access to
financial markets, allowing them to spend more on
research and development of industrial robot
components and offering after-market maintenance
for products that break down.
Human Resources: A lack of talent will be one of
Chongqing’s biggest challenges. By 2020, Chongqing
will need 100,000 robot professionals (from today’s
5,000). Most industry parks have began plans to create
training and research facilities, including Yongchuan and
Liangjiang robot parks (see Table 11).
Table 9: Cost of a 165 kg Six-Axis Articulated
Robot RMB - Foreign versus Domestic Company
Foreign Domestic
Total Cost 16.86 29.9
Body 4.70 6.53
Speed Reducer 2.08 9.18
Drive and Controller 0.50 1.30
Servomotor 4.45 7.99
Other Electronics 2.61 2.61
Misc. Parts 2.52 2.30
* Chongqing’s one listed robot related company is
Chongqing Dima, which is focusing in medical related
robots.
* This does not include subsidiaries of listed companies
(Chongqing HS Robot is a subsidiary of listed Wuhan
Huazhong Numerical Control [SHE:300161].
* Robot core components including the electronic control
system, servo motor and reducer.
* Source - Guolian Securities - April 6, 2016
• Source - https://robotenomics.com/2016/01/
• Source: http://cqrbepaper.cqnews.net/cqrb/html/2015-05/14/
content_1836287.htm
Table 10: Listed Robot Companies Analysis
21%
14%
14%
29%
Headquarters for China Listed Robot Companies (Total 42)
Guangdong Shanghai Zhejiang Shandong
Jiangsu Tianjin Other
Chongqing University of Posts and
Telecommunications Nanan
National Robotics Testing and Assessment Center
(Chongqing) Jiulongpo
Chongqing Liangjiang Robot Training and
Application center Liangjiang
CAS Chongqing Liangjiang Robot Incubation
Center Liangjiang
Chongqing Institute of Industrial Automation
Instrumentation Jiulongpo
Chongqing Institute of Technology Yongchuan
Chongqing Gu Gao Science Research Institute Yongchuan
Yongchuan Robot Public Service Center and
Public Training Center Yongchuan
Jiangjin Robotics and Intelligent Terminal Industrial
Park Project Jiangjin
Table 11: Robot Research and Education Projects

5. About Stone Tan: In 2010, Stone
Tan was established in Chongqing to
focus on financing solutions to small
and medium sized businesses in
Chongqing.
The company is currently focused on
the financial leasing business
throughout China, with presence in
Chongqing, Hong Kong, Shanghai,
and Anhui province.
Hong Kong Office:
Stone Tan (Hong Kong)
Suite 1A, 11th Floor Tower 1, China
Hong Kong City 33 Canton Road
TsimShaTsui Kowloon
Hong Kong
Tel: +852 27355188
Operation Headquarters:
Stone Tan Chongqing
Room 1004, 10/F, Fortune Tower A
No. 2 Fortune Road , Yubei District
Chongqing, China
401121
+86 23 88197891
Scan our WeChat Code
to get future industry
analysis and news about
Stone Tan.
重庆谈⽯融资租赁有限公司，是由“谈⽯中国⾦
融投资有限公司”与“重庆渝富资产经营管理集
团有限公司”共同出资组建。
Stone Tan Financial Leasing Co. was jointly
invested by both Stone Tan Financial Investment
Company and Chongqing Yufu Assets
Management (Group) Co. Ltd.
主营业务 Key Business Types
直接融资租赁，售后回租，委托租赁，管理咨
询，财务顾问
Direct Leasing, Sales Leaseback, Entrusted Loans,
Management Consulting, Financial Advising