Exporting Automation, Not Just Goods: Evidence from China's Industrial Robot Exports

Abstract

This paper provides the first systematic analysis of who imports China's industrial robots, why they do so, and how competitive these robots are in global markets. Using bilateral trade data from 2005-2022, we document a structural transformation in China's position in global robotics trade: China has shifted from a net importer to a net exporter of industrial robots. Its exports are disproportionately directed toward emerging manufacturing hubs, particularly in Southeast Asia. Although Chinese robots are generally less technologically advanced than those produced by Japan, Germany, the United States, and South Korea, they offer the strongest "bang for the buck." These "good-enough" robots are especially attractive to price-sensitive, lower-income economies that are becoming new manufacturing platforms amid global supply-chain reconfiguration. Consistent with this mechanism, we document a U-shaped relationship between robot imports and GDP per capita: high-income economies adopt frontier robots to offset high labor costs, whereas low-income economies rely on cost-effective Chinese robots to compensate for weaker labor quality rather than high wages. Finally, using a fully specified general equilibrium framework, we conduct counterfactual policy simulations to evaluate how geopolitical and industrial policy shocks affect China's robot exports, relative wages, and global welfare. Our findings suggest that China is increasingly exporting production capability---not just products. More broadly, contrary to the view that automation substitutes for offshoring, our results show that cost-effective robots can travel with production as manufacturing relocates to lower-wage economies.

Keywords: Industrial Robots, Automation Export, China, Emerging Manufacturing Economies, Counterfactual Policy Analysis