Industrial automation in China will be "fast" and "disruptive", says Mirae Asset Global Investments, bringing about both positive and negative consequences to a range of sectors.
In a note to investors, Mirae said the industrial automation market in China has been “growing fast” and will affect sectors from financial services to retail.
According to the company, the IT and auto sectors are a stand-out in terms of both opportunities and risks.
“For autos we see better productivity as the key benefit, but new entrants could be a risk for incumbents; for IT we also foresee better productivity, but revenue deflation could be a risk," Mirae said.
The update indicated that the Chinese banking sector will likely benefit from increased automation, particularly on the cost-cutting front. However, a threat to the sector could come from emerging fintech platforms.
For the retail sector, automation could bring down costs and make e-commerce more profitable, accelerating the use of online retail.
However, Mirae noted that although China’s automation market is growing strongly, its robot penetration is relatively low when compared against developed markets.
Specifically, robot ownership in 2013 was just 30 per cent to that of the US in 2013, 11 per cent of Germany, 9 per cent of Japan and 7 per cent of Korea. At the same point in time, its robot density was at an equivalent stage of maturity to Japan in 1983, Germany in 1990 and the US in 1999.
Government support policies are expected to support industrial automation going forward. According to Mirae, high-tech enterprises will be able to apply for a special tax rate, monetary subsidies, labour incentives and land subsidies.