Chinas Humanoid Revolution: Robots Set to Replace Migrant Workers in Manufacturing

Dozens of humanoid robots, managed by operators, are folding t-shirts, preparing sandwiches, and opening doors in a massive warehouse located in the suburbs of Shanghai, according to an article by Reuters.

The news agency interviewed various experts, including Chinese humanoid manufacturers, investors, clients, and analysts, to explore the potential and development strategies for these metallic machines.

According to the interviewees, China aims to leverage its advantages by focusing on training and refining AI models. Some believe that the recent breakthrough by DeepSeek has significantly contributed to this effort.

The widespread integration of robots in factories could enable China to maintain sustainable economic growth while solidifying its manufacturing dominance, turning it into a direct competitor with the United States, as noted by the agency.

How Beijing will address the risk of large-scale factory layoffs remains uncertain. It is anticipated that, similar to previous industrial revolutions, the creation of new job opportunities will help mitigate this issue.

The significance of humanoid robots for Beijing is accentuated by President Xi Jinping, who emphasized their importance amidst the trade war with the U.S., declining population, and slowing economic growth during a visit to AgiBot in Shanghai.

The country is striving for a new industrial revolution where many factory tasks will be carried out by robots.

«Imagine a day when robots will assemble themselves in our own factory,» remarked AgiBot partner Yao Maoqing.

Chinese authorities are providing substantial subsidies to companies engaged in humanoid production, with over $20 billion allocated for this purpose in the past year. Meanwhile, Beijing is establishing a $137 billion fund to support AI and robotics startups.

Reuters analyzed hundreds of tender documents and found that the government also acts as a key purchaser.

Additional support includes a newly established artificial intelligence and robotics fund by the city of Shenzhen.

Humanoid robot manufacturers and component suppliers in Wuhan are eligible for subsidies of up to 5 million yuan once they achieve specific purchasing and sales targets.

In 2023, Beijing’s municipal authorities launched a robotics fund offering up to 30 million yuan to companies looking to expedite the development of their first products.

Some analysts speculate that humanoid robots may follow a trajectory similar to electric vehicles, whose costs have significantly decreased over the past decade due to government support and widespread adoption.

The average material cost for a humanoid is expected to be $35,000 by the end of this year, but this figure could fall to $17,000 by 2030 if most materials are produced domestically. These estimates come from Ming Hsun Li, head of automotive and industrial research at Bank of America Securities in Greater China.

Three Chinese humanoid manufacturers have provided a similar forecast—halving their production costs within a year. In comparison, the component cost for Tesla’s Optimus is between $50,000 and $60,000 due to significant imports from China.

«Thanks to an extensive supply chain, China has an advantage in significantly lowering the production costs of humanoid robots,» stated Li.

He added that by 2030, global sales of robots could reach 1 million units annually.

Reuters also highlighted the Chinese government’s investments in data collection.

Robots need to interact with the physical environment and be trained on datasets focused on task execution such as folding boxes or pouring water into cups.

In 2024, Shanghai authorities helped establish the AgiBot data collection facility, providing a venue where around 100 robots operate under the supervision of 200 people each day.

This site allows for the collection of high-quality data, with similar facilities being developed by the governments of Beijing and Shenzhen.

Humanoid startup MagicLab claimed that focusing on the «brain» of their robots has enabled the deployment of prototypes on production lines for tasks such as quality inspection, material handling, and assembly.

«These breakthroughs are laying the groundwork for us to focus on real-world applications by 2025. DeepSeek has aided in addressing and understanding challenges, facilitating the development of our robots’ ‘brains,'» said CEO Wu Chanzheng.

However, China’s most significant advantage lies in its dominance in hardware production required for humanoids. Analysts and startups believe the country could produce up to 90% of the necessary components, lowering market entry barriers.

«If you have an order in the morning, suppliers can deliver materials or products to your company by the afternoon, or you can visit their site directly,» explained Zhang Miao, the COO of Beijing startup CASBOT.

According to the National Bureau of Statistics, around 123 million people were employed in China’s manufacturing sector in 2023. Social security expert Zheng Gongcheng warned that the rise of robots and AI could impact approximately 70% of the manufacturing sector, potentially leading to a sharp decline in social security contributions.

Tang Jiang, chief technologist at the government-supported Beijing Center for Human Robotics Innovation, noted that his prototypes are designed for tasks that people are unwilling to perform due to their repetitive nature.

Despite concerns about job impacts, Beijing views technology as a key to addressing labor shortages in fields such as elder care, where challenges are intensifying due to population aging.

«In five to ten years, robots will be able to organize a senior person’s room, pick up packages, or even assist them from bed to the bathroom,» noted Yao Maoqing from AgiBot.

The founder and CEO of Unitree Robotics, Wang Xinxin, stated that the primary challenge facing Chinese manufacturers of humanoid robots is the absence of a mature, unified «end-to-end» AI system.

In 2025, the sector will transition to mass production, and those who successfully develop technology enabling robots to perform general tasks without needing to launch separate programs for specific actions will emerge as the strongest players in the robotics market, Wang noted.

Six out of eleven domestic humanoid manufacturers plan to produce over a thousand units in 2025. Many startups are experiencing a «powerful growth surge» and are «overflowing with orders,» Wang said.

Meanwhile, Huawei partnered with UBTech Robotics to develop humanoids for factories and households. The aim is to «accelerate the transition of robots from laboratory innovations» to «widespread implementation in industrial, domestic, and other scenarios.»

Both companies plan to collaborate on creating «smart» factories utilizing robots and developing bipedal or wheeled service robots for household use.

As part of the agreement, Huawei will assist UBTech in establishing an innovation center focused on «embodied intelligence,» a form of artificial intelligence where cognitive processes are integrated into a human-like body.

Additionally, it’s worth noting that in April, a group of 21 humanoid robots participated in a half marathon in Beijing, although not all robots managed to finish, with some struggling right at the start.