Washington says its restrictions on Chinese robots are about security. But shielding US manufacturers from their strongest competitors may leave Chinese firms to gain the scale, data and global markets that determine who ultimately wins.

Concession speeches follow a formula: the vocabulary of defiance, thanks to the faithful, a promise that the fight goes on. Last month, Brendan Carr, chairman of the US Federal Communications Commission (FCC), essentially delivered one on behalf of American robotics.

Acting on findings from a White House task force, Carr added new foreign-made humanoid robots, quadrupeds and power inverters to the agency’s Covered List, denying them the authorisation nearly every electronic device requires to be sold in the United States. The stated grounds for the restrictions are cybersecurity and supply-chain risk.

The unstated ground is arithmetic. Chinese manufacturers account for roughly 85 per cent of the global humanoid market. There is no established American industry to protect, only an infant to be raised behind a wall.

That’s the message the industry received. Evan Beard, CEO of Standard Bots, hailed the order as among the strongest technology-security actions in modern American history, vowing that foreign-subsidised machines would not “dominate US robotics as they did solar”.

The security case deserves a fair hearing. A networked machine with cameras, microphones and limbs, stationed in a factory or a care home, is a plausible platform for espionage and sabotage. But the order makes clear how seriously Washington takes its own warning: it exempts the federal government, which may keep buying the machines deemed too dangerous for ordinary citizens. A menace to every American except the American government is less a threat assessment than a tariff in uniform.

Which returns us to Beard and solar. Although Washington began walling out Chinese panels with anti-dumping duties under the Obama administration in 2012, China now controls over 80 per cent of every stage of global solar panel manufacturing. The wall decided who could sell to Americans but not who won the industry.

Protectionism shouldn’t be dismissed outright, because Beijing has spent two decades proving it can work. China built the world’s dominant electric vehicle sector behind joint venture requirements and lavish subsidies.

But the shelter came with a whip. Dozens of domestic carmakers were thrown into a price war so brutal that most will not survive, and the survivors have been driven out into the world. In the Chinese model, protection is a training regime with an expiry date.

In the US, Alexander Hamilton’s Report on Manufactures made the infant-industry case in 1791. In the 20th century, the experiment ran both ways. Latin America’s import-substitution economies sealed their markets and their industries stagnated for a generation. Japan and South Korea tied every favour to export performance and produced Toyota and Samsung. The FCC has chosen the Latin American variant.

Every year spent selling into a captive home market is a year the rest of the world spends standardising on Chinese machines.

Chinese robot exports reached nearly 20 billion yuan (US$2.96 billion) in the first five months of this year, spread across 150 countries and regions. Just days before the US ban, Unitree Robotics launched its humanoids commercially in Europe. In June, AgiBot staged a product launch in London, and Volkswagen, in the middle of a bruising restructuring at home, already has UBTech’s Walker robots working the lines of its Chinese joint venture.

Labour-starved Europe, with no humanoid champion of its own producing at scale, will not wait for Texas and California to catch up. It will buy what exists.

And what exists, overwhelmingly, is Chinese. Humanoids improve through deployment: every warehouse shift generates the data that trains the next model.

American robotics, meanwhile, is rich in capital and short on production. American AI company Figure has a valuation of US$39 billion; Unitree Robotics is heading for a Shanghai listing at US$9 billion while shipping more robots.

Even Beijing’s outrage is theatre. For all the Commerce Ministry’s talk of unilateral bullying, Chinese vendors, one analyst noted, had largely written off the American market already and view Europe as their prime destination.

American firms may yet build superb robots: Figure, Apptronik and 1X are all close to shipping at volume. But they will now mature in a paddock, selling into a market from which their fiercest rival has been excluded, while Chinese firms fight one another, and everyone else, across five continents.

Concession speeches usually end the same way: the candidate vows that the cause endures and the comeback starts tomorrow. Perhaps it does; American industry has staged revivals before, and the humanoid market, at barely US$3 billion today against forecasts of US$200 billion by 2035, is young enough to turn.

But when Chinese President Xi Jinping arrives in the US next month, he will find a country that has conceded the present to campaign for the future, while his country’s machines continue staffing the factories, warehouses and, soon enough, care homes of everyone else.

The FCC calls it security. Beijing calls it bullying. Posterity will file it under concessions.

Republished from South China Morning Post

The views expressed in this article may or may not reflect those of Pearls and Irritations.