Reuters: Behind the prosperity of the Chinese robotics industry, hidden worries and chaos are incalculable.

Recently, Reuters wrote an article describing the development of the Chinese robotics industry. Behind the madness of the madness of the local industrial parks, it is incalculable.

The rapid development of China will always give people a sense of bizarre secession. In the small street full of cheap massage shops and hotels on the banks of the Yangtze River in the Yangtze River, we have seen a small restaurant and purchased one for tourists. robot. On a rainy Friday, this machine called the "Hero" machine-waiting student is clapping music and flashing his eyes to attract diners.

This robot is also a microcosm of Wuhu industry in recent years. This small town along the Yangtze River hopes to become the center of robot development in China. In order to complete their performance, the local government does not care whether these robots can really be sold. It is just round after round of financing the crazy vendors in the capital market.

“Hero” is the product of the robot boom in Lugu Lake. It was born in a robotic business park in the suburbs of the city. The entire R&D production cycle is less than six months. The park’s total investment has reached RMB 2.2 billion. In the next phase, the local government is also preparing to build a new hotel, an exhibition center and a cultural square in the park. In the future, the local government will also draw RMB 1.2 billion in funds through the “Local Government Financing Train” project to attract more robot companies to set up factories there.

The development of robotics technology is indispensable, but the problem lies in the fact that domestic companies like Wuhu are doing a lot of work. There are a few medium-sized cities that frantically burn money to build robotic business parks. Cities that rely on the so-called “financing through trains” financing to carry out redundant infrastructure construction are often burdened with heavy debt. When the tide is over, there are only indefinite debts left for these cities and countless grasslands in the business park.

Last year, in order to promote China's development in the field of robotics, the government launched the "Made in China 2025" action plan. Due to the lack of unified command, each city has launched its own robot project for political achievements and a large amount of money has poured into this field. In fact, people with discerning eyes can already see that although the demand for robotic automation in the market is still rising, the Chinese robot market has obviously experienced a trend of overcapacity.

Data show that last year China’s demand for industrial robots fell by about two-thirds, but at the same time, more than 40 robotic parks were built across the country. In June this year, according to the “Daily Economic News” report, Xin Guobin, deputy director of the Ministry of Industry and Information Technology, warned that the Chinese robotics industry has seen a trend of “low end of high-end industries” and there is potential for excess investment. Robot companies should avoid blind expansion and low prices. Horizontally repeated construction.

Strong growth

As early as the 1990s, the “Financing Through Train” project flourished in all parts of China. At that time, local governments bypassed all kinds of financial supervision through this method and raised large amounts of funds for urban construction and various projects.

It is true that the "financing through train" has played a strong supporting role in the continued growth of China's economy during the international financial crisis, but at the same time it has also caused the Chinese local government to bear a huge debt burden. According to the Bank for International Settlements, the burden on local governments has reached a staggering $26.56 trillion, which is 2.55 times the total GDP of China in 2015. In the first five months of this year alone, the amount of investment through the “Financing Through Train” has increased by 72% year-on-year, reaching an alarming RMB 740 billion.

“Infrastructure investment companies are trying their best to generate wealth,” said Li Yuanjian of Bohai Trust, which also provides a large number of high-interest loans for many companies unable to obtain investment from the mainstream market.

Lost control of the "fast track"

Because it is a socialist country, China's financial system is quite loose. Local governments have spent 85% of the budget, but they can only get 50% of the tax revenue, so they have to borrow for a long time.

In this way, it is very difficult for the central government to control the actions of the local governments. The cities are also fighting each other and there is no data exchange between them. Therefore, once the central government implements new projects, the phenomenon of repeated construction everywhere is very serious.

"We are just a financing platform, and we will lend money to companies in need after we have paid for it," said the person in charge of Jiujiang Construction Investment Co., Ltd. in Wuhu City. Right now, they are responsible for the sale of government bonds for the construction of robotic center cities.

If this is only a game of private capital, it is in fact harmless, but the key to this so-called robot center city is simply the well-designed local government. They think that the central government will be responsible for the bottom of the game, so it is even more fearless, but it is simply gamble.

“In fact, the so-called robotic start-up companies entering industrial parks simply cannot get the standard credit indicators. They can get the money here completely by borrowing the support of the local government, while the local governments think that they are loyal executors of central policy. “Jie Peng from Singapore’s Western Asset Management Company stated that he is also one of the investors in the “Financing Through Train”.

For investors, the high rate of return is one of the main reasons for them to join the “Financing Through Train”, but the carnival of capital has caused people to worry about a new round of investment waste. Previously, the governments of various parts of China had introduced large amounts of funds into the construction of local municipal image projects and entrepreneurial centers, resulting in a large number of abandoned facilities.

Aspirational "Entrepreneurs"

Of course, we cannot judge whether the Wuhu Robot Pioneering Park is a new scam, but its expansion plan is very bold. Its industrial robot production capacity will be rapidly upgraded from the current annual production of 1,000 units to 10,000 units.

However, even with the government’s unprecedented support, there are still only a handful of large companies in the park. Most of the enterprises in the park are start-up companies, and some are even old equipment companies. Their products are still outdated farm tools.

The “heroes” of robots we mentioned in the opening ceremony came from the Okayrobot company in the industrial park. They not only created robot waiters, but also created brain-opening products including air-conditioned helmets, horizontal showers, and mechanical exoskeletons. However, the only mechanical exoskeleton product that can make people brighten up is still in the PPT stage.

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