In Shanghai’s suburbs, a vast warehouse buzzes with activity as dozens of humanoid robots repetitively perform tasks such as folding clothes, making sandwiches, and opening doors. Operated up to 17 hours a day, the facility is owned by Chinese startup AgiBot and is designed to generate large volumes of training data. The goal: to build advanced robots that could one day be widely integrated into everyday life, transforming how people live and work. “Picture a factory where our robots assemble themselves,” said AgiBot partner Yao Maoqing. China sees humanoid robots as a strategic solution to key challenges like trade tensions with the U.S., an aging population, and slowing economic growth. This was underscored by President Xi Jinping’s recent visit to AgiBot, where he joked that the robots could even form a football team. Other robotics firms, such as Unitree, have also gained recognition at high-level government meetings focused on economic innovation.

While the U.S. and China continue to debate tariffs originally aimed at reviving American manufacturing, Beijing is pushing for a new kind of industrial revolution—one where humanoid robots handle many factory tasks. In recent years, Chinese robots have shown impressive capabilities, from doing somersaults to running half-marathons and playing football. What’s new, however, is how China is marrying this advanced hardware with cutting-edge AI. Fueled by local firms like DeepSeek and strong government backing, Chinese developers are making strides in creating robot brains—software systems that allow robots to learn, adapt, and become productive workers. Interviews with manufacturers, analysts, and investors reveal growing optimism that these robots could soon shift from spectacle to workforce staple.

Central to China’s strategy is the use of high-quality, task-specific data to train embodied AI—systems that learn through interaction with the real world. Unlike generative AI, which learns from vast internet datasets, embodied AI requires physical experience. AgiBot’s Shanghai site, with 100 robots run by 200 operators, generates just that kind of data. Similar government-supported facilities are under construction in cities like Beijing and Shenzhen. Government support is massive. More than $20 billion was funneled into the humanoid sector in the past year alone, with plans for a 1 trillion yuan fund targeting AI and robotics startups. Procurement of humanoid technology by the state jumped dramatically between 2023 and 2024, and local governments offer incentives such as rent-free offices and cash subsidies to robotics firms that meet sales targets.

Some analysts believe humanoid robots will follow the same cost trajectory as electric vehicles. According to Bank of America Securities, the average component cost for a humanoid robot could drop from $35,000 in 2024 to $17,000 by 2030. Chinese manufacturers are already predicting prices could halve within a year, giving China an edge over competitors like Tesla, whose robot components cost significantly more when sourced outside China. China’s dominance in the production of robot parts—up to 90% of components are locally made—further strengthens its position. The country also leads in the number of companies developing humanoids, unveiling 36 new models in 2024 compared to just eight in the U.S. Several firms, including Unitree and UBTech, are moving toward mass production this year.

Still, the widespread adoption of humanoid robots raises concerns about job displacement. With over 120 million Chinese employed in manufacturing, some experts warn that as many as 70% of factory roles could be affected. At China’s National People’s Congress, policymakers debated measures like AI unemployment insurance to protect displaced workers. However, Beijing views humanoid robots as essential for addressing labor shortages in sectors such as elder care, where demand is growing as the population ages. A national elderly-care plan released in December encourages the use of robots. Shortly after, Ant Group launched Ant Lingbo Technology, a subsidiary focused on using humanoids in caregiving roles. According to AgiBot’s Yao, future robots may help elderly residents by tidying rooms, picking up packages, or even assisting with mobility—offering a glimpse of how China envisions its AI-powered future.

Disclaimer: This image is taken from Reuters.