Heavy Investment and Slow Progress: China Faces a Humanoid Robot Bubble as Officials Raise Concerns

By Emir Abyazov

Chinese authorities have issued their clearest warning yet that a bubble is forming in the country’s rapidly expanding humanoid robotics industry. The National Development and Reform Commission (NDRC), China’s top economic planning agency, publicly acknowledged for the first time that the sector faces real risks despite government backing and global attention.

People photograph a humanoid robot at the China International Fair for Trade in Services (CIFTIS) in Beijing, China. Source: CGTN/VCG

On November 27, 2024, NDRC spokesperson Li Chao told reporters in Beijing that many advanced industries struggle to balance fast expansion with the danger of inflated valuations. He added that this challenge has now reached the humanoid robotics market, a field prioritized by China as a pillar of future growth.

Growing industry, limited results

An investment bubble typically emerges when valuations and capital inflows far outpace actual technological progress. China’s humanoid robotics industry appears to be approaching this point. Investor enthusiasm is intense, yet real-world results remain limited.

More than 150 companies in China are currently developing humanoid robots — an unusually high number for such a young field. Many are new startups or firms shifting from unrelated sectors. Key players include UBTech Robotics with its Walker S robot, AgiBot, Unitree Robotics (maker of the R1 robot priced under $6,000), Fourier Intelligence, and major tech brands like Xiaomi and XPeng Motors. According to Morgan Stanley, 37 of the world’s top 100 humanoid robotics companies are based in China.

Morgan Stanley projects humanoid revenues will explode from effectively zero today to $4.7 trillion by 2050. Image source: Morgan Stanley

The Solactive China Humanoid Robotics Index has risen 26% in 2024, underscoring the surge in market enthusiasm.

Authorities worry that the market is filled with “very similar” robot models, limiting innovation and wasting resources. This concern is especially notable because humanoid robotics is one of six industries identified by the Communist Party as a core driver of China’s economic growth through 2030.

Citigroup analysts expect Chinese manufacturers to sharply ramp up production next year, predicting exponential output. But behind these projections lies a more restrained reality.

Big plans, modest progress

Despite heavy investment, real progress in humanoid robotics remains slow. Companies like UBTech report large order volumes — exceeding one billion yuan in some cases, yet meaningful deployment in homes, hospitals, or factories is still limited.

To address these issues, Chinese authorities plan to accelerate the creation of clearer market entry and exit mechanisms that can support fair competition and filter out weak performers. Priority initiatives include:

• Accelerating research and development of core robotic technologies
• Supporting the construction of the national training and testing infrastructure
• Promoting the consolidation and sharing of industrial resources across regions

This warning comes as global analysts raise concerns about inflated valuations across the broader AI sector (which obviously includes AI crypto projects as well. In the US, Nvidia is often seen as a leader in what many believe to be the AI bubble, with its stock (NVDA) achieving nearly 1,120% gains since the beginning of 2023. In contrast, China’s approach indicates that the government aims to foster innovation in this strategically important industry while steering clear of speculative excesses.

Today, the nation’s humanoid robotics sector stands at a decisive crossroads — between extraordinary potential and the risk of a costly bubble. How China manages this balance may shape not only the future of its own robotics industry but also global competition in the field.

Source:: Heavy Investment and Slow Progress: China Faces a Humanoid Robot Bubble as Officials Raise Concerns