Why Chinese robotics companies are winning the first market

China’s humanoid robots have caught on worldwide interest and kung fu at the televised Spring Festival Gala, where Chinese smartphone maker Honor is expected to perform. unveiling its first humanoid robot at MWC in Spain.

Robotics has been recognized as a priority in the country “Made in China 2025” planalthough initially they focused on industrial machines, not humanoids. Now, rapid advances in multimodal AI are accelerating so-called AI — autonomous machines operating in the real world — that advocates say can help eliminate inefficiencies and drive productivity.

In the early stages of the development of humanoid robots, Chinese companies are outpacing their US competitors in speed and volume, Selina Xu, director of China and AI at Eric Schmidt’s office said.

“China has an electronics manufacturing system — much of it developed through the EV sector, from sensors to batteries — and one of the world’s most powerful manufacturing facilities, which allows companies to do it faster than their Western competitors,” Xu told TechCrunch.

As a result, not only are Chinese robots cheaper but companies can also release new models faster, Xu said, adding that leading Chinese player Unitree shipped about 36 more units last year than US rivals Image and Tesla.

Global shipments of humanoid robots totaled just 13,317 units last year, according to Forbes report released last month. It’s a small industry base that is expected to double annually and reach 2.6 million units by 2035. (However, these figures should be viewed with caution. The report indicates that it is still unclear how many units represent commercial sales versus demo or pilot models, confirming the early nature of the industry.)

The top humanoid robot manufacturers by 2025 were led by China’s Agibot and Unitree, followed by UBTech, Leju Robotics, Engine AI, and Fourier Intelligence, confirming Beijing’s early dominance in the field.

A big shift recently has been from “demo-driven fun” to “task-driven adoption,” Yuli Zhao, chief technology officer at Galbot, told TechCrunch. The Galbot humanoid robot, G1, appeared at the Spring Festival Gala, China’s annual New Year’s Eve show, alongside robots from China. Unitree Robotics, Noetix, and MagicLab.

“More and more customers are asking: Can a robot run smoothly in a real environment and remove work from people’s plates? The practical pull is encouraged in China because the industrial policies and procedures encourage the renewal of machines, and the manufacturing environment makes it possible to repeat very quickly,” said Zhao.

While the amount of funding for humanoid startups has “really helped” progress, “sustainable adoption comes when you can demonstrate reliable and repeatable value for a product or service, not just a one-off demonstration,” Zhao added.

However, investment is helping and Chinese robot manufacturers are protecting it. Last year Unitree was valued at around $3 billion after closing its Series C, with ambitions to reach up to that $7 billion in future IPO. Meanwhile, Galbot has raised $300 million in new funding, said to push its valuation to $3 billion, one of the largest investments in China’s humanoid robotics sector to date.

U.S. companies are moving on from flashy demos and focusing on global trends. In addition, they are pursuing their own aggressive goals. US Startup FoundationFor example, they plan to produce 50,000 humanoid robots by the end of 2027.

But China is already looking at a mix of low-cost market models and high-tech software, rapidly expanding humanoids across the retail, consumer, and recycling sectors, according to December. TrendForce report.

Challenges in China’s governance

When it comes to AI machines and embedded software, it is still unclear where the Chinese humanoid industry stands. Companies are betting on language recognition models and “global models,” but both technologies remain in their infancy. Nvidia currently leads the field with its end-to-end humanoid software, according to Xu, so naturally most humanoid startups in China are powered by Nvidia’s Orin chips. However, domestic chip makers are developing other homegrown solutions, he said.

Yet humanoid roboticists are still working on big challenges. The problem is enabling models of the robot’s foundation to predict the “next situation” the robot will encounter in an unpredictable environment, just as large languages ​​predict the next word. But unlike LLMs, humanoid robotics companies can’t just look to the Internet to train data, Xu said. So many rely on simulation sites, which generate synthetic data, although real-world data collection is still important.

“Because of the problem of lack of data, humanoids are still far from independence. Modern equipment is ahead of the program – the body of the robot can deal with more dexterity today than years ago (although it has reliability issues, as we have seen with the robots that were broken during humanoid marathons), but the brain is still there,” said the expert.

Safety is a big hurdle for humanoid robots, too. One public accident could trigger a public backlash, and China is trying to figure out how to release technology quickly without moving too quickly. As companies grow, more regulations are expected.

Given the lack of data, Zhao believes that the demand for humanoids will first grow in the workplace that is better.

“The initial rush is in manufacturing plants, warehouses, and retail, where tasks are repetitive, hours are long, and methods are clear – creating real needs and good conditions for humanoid robots to deliver value at scale,” he said.

Other APAC players

The development of humanoid robotics is not a two-world competition. Japan’s robotics ecosystem – from the basics to the heavyweights – is there aiming to create a humanoid mass by 2027. Long pioneered through projects such as Honda’s Asimo, Murata Manufacturing’s Murata Boy, and SoftBank Robotics’ Pepper, Japan relies on precision and superior control. One area that is different from the rest of the world: Humanoid robots are increasingly being used to care for the elderly.

Coral Capital CEO James Riney, who invests in Japanese technology companies, believes Tokyo will continue to thrive in the humanoid robotics industry. “There are three factors that can lead to the introduction of robots in Japan.” One is the lack of labor and the need to rely on large numbers of immigrants. The second is the common nature of robots as our friends – Doraemon vs. Terminator. The third is that Japan is already popular in many areas of robotics.

Hyundai Motor’s Boston Dynamics unit launched a new humanoid Atlas for factory use by 2028and plans to make until 30,000 units per year in the US as part of its AI-powered system.

However, in China, government policies, industrial processes, labor shortages, and business investment are all changing to turbocharge the world’s humanoid robotic push.

“China’s leadership is clearly understood as an immediate opportunity,” Zhao said. “The environment here integrates the entire cycle – R&D, supply chain, production, integration, and customer delivery – in a more robust way. This means that humanoid companies can go from prototype to global deployment quickly, learn from real processes, and iterate at a speed that is difficult to compare elsewhere.”