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CHINA’S IMPORTS OF INDUSTRIAL ROBOTS FROM JAPAN CONTINUE TO SLIDE AMID US-CHINA TRADE WAR

2019-09-26 15:21:19

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CHINA’S IMPORTS OF INDUSTRIAL ROBOTS FROM JAPAN CONTINUE TO SLIDE AMID US-CHINA TRADE WAR

 

Visitors look at a robotic arm from Chinese company Aubo Robotics at the World Robot Conference in Beijing on August 15, 2018.

 

Japan’s industrial robots industry has become the latest victim of the trade war between the US and China, indicating just how interconnected the global hi-tech supply chain is.

 

A profits squeeze amid a slowing economy has seen Chinese manufacturers reduce their orders for Japanese robots, said Ma Shugen, a professor at the department of robotics at Ritsumeikan University in Japan, in an interview last month.

 

“The trade war has lifted tariffs for Chinese manufacturers … so companies are unwilling to make investments to build new product lines and import new machinery,” said Ma.

 

China is the largest importer of Japanese-made industrial robots, sucking in over a 40 per cent share of exports of these goods in 2018, according to a 2018 report by Mizuho Research Institute. Total exports of industrial robots by Japan declined for a fifth consecutive quarter since the second quarter of 2018, according to a report published in September by Mizuho Research Institute, and the rate of decline is accelerating.

 

Exports to China decreased by 28 per cent in the April to June 2019 quarter alone compared to a year ago, according to the September report, which blames the drop-off on the unfavourable economic environment created by the US-China trade war, which is holding back capital investment.

 

The yuan has also weakened by around 7 per cent against the Japanese yen year on year as of August, which makes Japanese imports more expensive for Chinese manufacturers.

 

The robot makers affected include FANUC, headquartered at the foot of Mount Fuji and one of the largest industrial robot manufacturers in the world. It reported a 48 per cent drop in consolidated net income for the April to June 2019 quarter compared with the same period a year ago.

 

It attributed the fall to decreased demand in China and caution on capital investment in the automobile and general industries in Europe.

 

“In the absence of a sudden improvement in US-China relations, we are resigned to the fact that business is going to be tough,” said FANUC chief executive Yoshiharu Inaba in an interview last year. A FANUC spokesman declined to comment.

 

The US this month levied a new 15 per cent tariff on about US$110 billion worth of Chinese products, including household goods, Bluetooth earbuds and televisions in September in the latest escalation of the 14-month trade war.

 

Meanwhile, Yaskawa Electric Corp, a leading Japanese manufacturer of industrial robots, reported a 16 per cent drop in net sales for the March-to-May quarter, compared with the same period last year and forecast a 15 per cent reduction in net income for its financial year ending February 2020, blaming trade and tariff difficulties.

 

A Yaskawa spokesman declined to comment.

 

China wants to upgrade its manufacturing industry and move up the value chain by 2025 and this has boosted demand for industrial robots in the country. Robot sales in China have increased more than twofold in just two years since the “Made in China 2025” national policy plan was announced in 2015, according to the China Robot Industry Alliance.

 

The Chinese government has been giving subsidies to the domestic robotics industry since 2014 but due to the complexity and capital-intensive nature of the industry – and Japan’s early lead – importing the specialised robots remains the first choice for many Chinese manufacturers.

 

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