China is aggressively positioning itself as a global leader in embodied AI — artificial intelligence integrated into physical machines such as humanoid robots and autonomous industrial systems. The report argues that China’s vast manufacturing ecosystem, especially its dominance in electric vehicles and industrial robotics, gives it a major advantage in developing next-generation robotics technologies. Chinese policymakers see embodied AI as a strategic tool for boosting economic growth, addressing labor shortages, strengthening surveillance capabilities, and modernizing military systems.
The report highlights that China already has the world’s largest installed base of industrial robots and produced around 90% of global humanoid robots in 2025. Companies such as UBTech, XPeng, and Kepler Robotics are testing humanoid robots in factories for logistics, inspection, and assembly tasks. Beijing is also supporting the industry through initiatives like “Robot+” and “AI + Manufacturing,” alongside massive state-backed investment funds designed to accelerate robotics innovation and localize supply chains.
Despite the rapid progress, the report notes that Chinese humanoid robots still face major technical limitations. Most systems remain heavily scripted or teleoperated rather than fully autonomous, and they still struggle with precision, adaptability, and real-time decision-making. China also remains dependent on foreign technologies, especially NVIDIA chips and AI software ecosystems, although domestic firms are increasingly attempting to reduce that reliance through localized hardware and AI models. Experts cited in the report warn that the gap between flashy demonstrations and practical real-world deployment remains significant.
The broader concern raised by the report is geopolitical and economic competition. European firms could face a repeat of the electric vehicle race, where China leveraged industrial scale, subsidies, and supply-chain control to dominate global markets. The study suggests that embodied AI may become the next major battleground in technological competition, with China aiming to combine AI, robotics, and manufacturing into a self-sufficient industrial ecosystem. At the same time, concerns are growing about job displacement and the long-term social impact of widespread robotic automation inside China itself.
