CNBC's The China Connection newsletter: Wonders and woes of China's robotics industry

Hello, I'm Anniek Bao, a China system and concern reporter, filling successful for Evelyn this week. Welcome to different variation of The China Connection.

This week, I look astatine however the World Robot Conference enactment China's ambitions for humanoid robots connected afloat display, adjacent arsenic engineers and investors admit that integrating them into mundane beingness is inactive a distant prospect.

This study is from this week's CNBC's The China Connection newsletter, which brings you insights and investigation connected what's driving the world's second-largest economy. Like what you see? You tin subscribe here.

At the World Robot Conference successful Beijing, which concluded Tuesday, the temper was a blend of optimism and caution: Businesses showed disconnected progressively lifelike humanoid robots adjacent arsenic they conceded that technological gaps keeping these machines from mainstream usage stay wide.

Thousands turned up to ticker humanoid robots to execute an array of antithetic feats: from clumsily serving popcorn and drinks, spinning handkerchiefs, sparring successful a boxing ringing to playing chess and showcasing shot skills.

But nary of these feats amounted to a technological breakthrough. While determination person been improvements successful design, maneuverability and appearance, the androids inactive conflict to process and respond to their surroundings, a regulation that keeps them from astir real-life workplace roles.

So far, their commercialized usage is mostly confined to guiding visitors astatine accumulation halls, buying malls and, much recently, investigating astatine factories for repetitive tasks similar sorting materials and performing prime checks.

"When volition humanoid robots beryllium capable to bash 80% of the carnal enactment that quality tin do? That's decades away," said Jay Huang, managing manager and caput of Asia concern technologies assemblage astatine Bernstein.

"But what we volition spot is these idiosyncratic tasks, similar worldly handling, being multiplied into a overmuch bigger scale. They tin beryllium utilized successful precise antithetic format, antithetic settings," Huang added.

Some tasks similar utilizing a robot to marque a furniture are inactive successful the "very early" stage, with debased occurrence rate, Huang said, "but that's the close absorption to propulsion the manufacture forward."

Take PsiBot's mahjong-playing droid displayed astatine the event: It inactive misidentifies tiles, often confuses the game's rules and plays astatine a comparatively dilatory pace, according to section media reports.

The technological bottleneck for large-scale integration of humanoids into regular beingness stems from a deficiency of cutting-edge AI models and insufficient grooming data, said Bob Chen, economist astatine Shanghai-based FG Venture. The venture-capital steadfast has invested successful robotics startups including Hangzhou-based DEEP Robotics that makes quadruped-robots — machines that mimic movements of four-legged creatures.

Androids trust connected immense troves of motion-capture, visual, tactile and audio data, on with simulations, to physique the sensory and behavioral maps they request to navigate and interact successful the existent world.

"Large connection models person alternatively constrictive function: connection in, connection out. But robots necessitate acold much complex, multimodal inputs, and their outputs are not words but actions and behaviors," said Chen, according to CNBC's translation of his comments successful Mandarin.

Several startups successful China person invested successful gathering "data factories," hiring radical to run robots oregon wearables to seizure machine-interaction information to bid bots.

Race for adoption

Humanoid robots are emerging arsenic different beforehand successful China's tech rivalry with the U.S.— wherever they could prevail with cheaper prices and faster deployment.

"China, the U.S. and different countries are playing connected a rather leveled playing field," Huang said. "Just similar successful electrical vehicles, autonomous driving, successful humanoid robots, China acts highly accelerated successful merchandise and use-case multiplication, portion U.S. players look to sprout for the holy-grail solution."

In robot manufacturing, Tesla's humanoid task Optimus appears to beryllium starring successful the U.S., with CEO Elon Musk saying the institution plans to nutrient astir 5,000 units this year.

While Musk's ambitious plans could springiness it a limb up connected different American competitors that person yet to deed the wide market, Chinese companies person been racing to marque their models much affordable.

They are besides believed to person been undercutting planetary peers successful presumption of price, acknowledgment to superior outgo controls. That's contempt the real-world applications of robots remaining uncertain.

In the pb up to the WRC, Unitree rolled retired its 3rd mentation of R1 model, priced astatine 39,900 yuan ($5,249) connected e-commerce tract JD.com, importantly cheaper than the its different models. The company's H1 exemplary was sold for 650,000 yuan per portion and G1 robot for 99,000 yuan.

At the conference, prices for a humanoid robot ranged from tens of thousands of yuan to implicit 100,000 yuan, and the high-end models susceptible of much analyzable tasks were priced supra 500,000 yuan.

UniX AI touted its entry-level humanoid droids astatine conscionable 88,000 yuan each. Shenzhen-based Engine AI has announced plans for a rival exemplary starting astatine 38,500 yuan.

Some U.S. companies specified arsenic Apptronik could spot their effort to rival Chinese humanoid robots beryllium further undercut by U.S. tariffs arsenic they inactive trust connected immoderate components from China.

China already has an borderline successful integrating machinery into mill workflows and, successful galore cases, is outpacing rivals successful marrying artificial quality with robotics, said Arthur Kroeber, founding spouse of China-focused economical probe steadfast Gavekal Dragonomics.

Kroeber predicts that wrong 2 to 4 years, Chinese factories volition execute large ratio gains crossed industries by combining top-tier concern robots with AI systems that marque them acold much effectual successful varied settings.

Some of UBTech Robotics' humanlike droids person been deployed astatine factories of carmakers BYD and Geely, astatine electronics shaper Foxconn and logistics elephantine SF Delivery, Chinese authorities media reported successful April.

However, during trainings, humanoid robots moved slowly, operating astatine conscionable 20% of quality efficiency, the study pointed out.

"Enabling humanoid robots to representation their moving routes, velocity up movements and run for agelong periods of clip successful uncomfortable somesthesia environments inactive requires immense amounts of data," it said.

While wide deployment of humanoid robots that heighten productivity mightiness inactive beryllium a distant prospect, Chinese companies are pushing up arsenic their tech contention with the U.S. heats up.

China and Hong Kong stocks roseate arsenic Asian markets tracked gains connected Wall Street aft the latest U.S. ostentation data raised expectations that the Federal Reserve could chopped involvement rates adjacent month.

Mainland China's CSI 300 added 0.74%, portion Hong Kong's Hang Seng Index — which includes large Chinese companies — had gained 2.2% arsenic of 2:22 p.m. section clip (2:22 a.m. ET). The mainland benchmark is up implicit 6% twelvemonth to date, information from LSEG showed.

The Hang Seng Tech index, which tracks the immoderate of the largest mainland Chinese exertion companies listed successful Hong Kong, roseate implicit 2%, lifted by Tencent Music Entertainment, which surged implicit 14%, a time aft the institution bushed estimates for second-quarter gross and profit.

China's 10-year authorities enslaved output presently stands astatine 1.723%.

The show of the Shanghai Composite implicit the past year.

Aug 14: NetEase, JD.com June-quarter earnings

Aug 14-17: World Humanoid Robot Games

Aug 15: Urban investment, concern output and retail sales, municipality unemployment rate, location prices for July

Aug 19: Xiaomi, Xpeng June-quarter earnings