On a misty Saturday afternoon in Shenzhen’s Central Park, a gaggle of teenage girls are sheltering from the drizzle under a concrete canopy. With their bags of crisps piled high in front of them, they crowd around a couple of smartphones to sing along to Mandopop ballads. The sound of their laughter rings out across the surrounding lawn – until it is pierced by a mechanical buzzing sound. Someone has ordered dinner.
A few metres away from the impromptu karaoke session is an “airdrop cabinet”, one of more than 40 in Shenzhen that is operated by Meituan, China’s biggest food delivery platform. Hungry park-goers can order anything from rice noodles to Subway sandwiches to bubble tea.
A drone, loaded up with goods from a shopping mall less than three kilometres away, flies into view, and earshot, hovering over the delivery station for a moment, before steadily lowering and depositing the goods into a sealed box that can only be unlocked by entering the customer’s phone number. Dinner is served with not a human in sight. Meituan aims to beat human delivery times by about 10%, although perhaps because of its journey whizzing through the clouds in a thin polystyrene box, the food, char siu pork and a waffle, is slightly cold.
The drones are a small part of the broader robotics and artificial intelligence industry that China is intent on expanding on this year.
With a trade war raging, demographic challenges dragging on the economy and the prospect of a productive relationship with the world’s largest economy looking ever more remote, Beijing is doubling down on the industries where it sees the potential – and the need – to develop ahead of the US. China’s leaders see artificial intelligence as being the key to upgrading its military strength, solving the problems created by a shrinking workforce, and a source of national pride – especially when Chinese firms manage to circumvent US-led sanctions on core technology. And technology firms, for many years shunned by China’s leader, Xi Jinping, as he sought to crack down on excessive wealth and influence outside the Chinese Communist party’s control, are being welcomed back into the fold as Xi seeks to restore confidence in the private sector and encourage domestic innovation.
In March, Premier Li Qiang promised to “unleash the creativity of the digital economy”, with a particular focus on “embodied AI”. Guangdong, which includes the tech hub of Shenzhen, is at the forefront of this movement. The provincial government recently announced 60m yuan (£6.4m) in new funding for innovation centres. Shenzhen in particular is known as China’s drone capital, because of the authorities’ progressive approach to drone regulations, allowing the “low altitude economy” to develop faster than in other parts of the country. China’s Civil Aviation Administration predicts that the value of the sector will increase five-fold to 3.5tn yuan in the next decade.
It is not just drones that are promising – or threatening – to upend the tempo of urban life in China. Humanoid robots are particularly buzzy. The highlight of this year’s Spring festival gala, which was viewed nearly 17bn times, was a dance performed by a troupe of humanoid robots made by a company called Unitree. On Saturday, the world’s first humanoid v human race – a half marathon – took place on the outskirts of Beijing.
“Applying artificial intelligence to robots basically really kicked into high gear last year,” says Rui Ma, a China technology analyst and investor based in San Francisco. The shift could allow the industry to grow at a much faster rate in 2025 than in previous years. Reinforcement learning, which means training robots to learn from experience rather than relying on rigid models, allows humanoid robots to be trained in months rather than years, hastening the pace of innovation. Toy robot dogs are already part of daily life in China. At a wholesale market in Yiwu, a trading hub in east China’s Zhejiang province, a child plays with a robot dog while his mother haggles with exporters over the price of false eyelashes. On the streets of Shanghai, a woman walks her robot dog, which is helpfully carrying a basket of shopping on its back.
The development of China’s robotics industry is intimately linked to advances in AI. For years, China has been trying to catch up with the United States. Xi wants to drive economic growth through “new quality productive forces”, a concept that includes advanced technologies.
Many in Washington fear that the US’s lead is narrowing. One major tool in the US’s arsenal has been its control over the important parts of the supply chain for semiconductors, the microchips used to train advanced AI models. The US restricts the export of the most sophisticated chips to China, part of a strategy described by former national security adviser Jake Sullivan as “high fence” around the US’s most strategically valuable technology.
But in January, a previously unknown Chinese firm called DeepSeek set the Chinese tech scene alight with the release of a large language reasoning model, R1, which performs as well as leading US competitors, at a fraction of the price. The model sparked a stock market crash, with $1tn wiped off Wall Street’s leading tech index as investors feared that the US’s pole position in the tech race was no longer guaranteed.
“You can’t really overemphasise how crazy of a moment that was,” says Ma.
Since then, China’s AI industry has been brimming with optimism. It was already being promoted by the government as the answer to China’s long term, sustainable growth, and now, says Ma, the public has started to believe it too.
Li Shuhao, a tech entrepreneur based in Guangzhou who founded an AI marketing company, Tec-Do, in 2017, was in the United States when the DeepSeek moment happened. All of a sudden, “it was way easier for me to arrange interviews and arrange meetings with other AI scientists,” he says.
“DeepSeek is kind of a symbol for the Oriental way of doing business,” says Li, a self-confessed “metalhead”, surrounded by electric guitars and a drum kit in his office in Guangzhou. He is referring to the strategy pursued by Liang Wenfeng, DeepSeek’s founder, of financing it through his own hedge fund rather than seeking external venture capital funding. “This is how typical Chinese entrepreneurs think. Just survive first, then do something new.”
DeepSeek published its work as open source, a principle that the government has long favoured and a move which has encouraged widespread adoption of its model. Robotics has been a particular beneficiary.
Putting tech first
The robotics supply chain can loosely be divided into three areas: the brain, the body, and the application of the technology in the real world. China has long been confident in its ability in the latter two areas – advanced supply chains in other hi-tech industries such as electric vehicles and autonomous drones show that China has both the capacity to produce industrial components at scale and the knowhow to assemble them into complex goods. But solving the trickiest part of the puzzle, making a robot brain that can learn human-like behaviours and movements, has been elusive. It requires sophisticated AI.
DeepSeek’s R1 model changed the game, paving a way for domestic humanoid robotics companies to catch up with overseas competitors, said analysts at Goldman Sachs in a recent note. The fact that DeepSeek’s open-source model uses less advanced chips helps level the playing field for Chinese companies.
The industry is still fraught with challenges. Any AI model requires reams of data for training. While LLMs used for things like chatbots can draw upon the vast universe of content that is the internet, the data for robotic AI models, such as information on how to physically move through space and interact with objects or people, is relatively scarce.
In the world of autonomous vehicles, another sector that China is focusing on, a car needs to be able to navigate through six axes, or “degrees of freedom”: forwards and backwards, left and right, up and down, and the rotations between these positions. The same goes for general robotics, such as Meituan’s food delivery drones. For a humanoid robot to be able to mimic a human in everyday tasks, such as cooking, it needs up to 60 degrees of freedom. Unitree’s H1 model that caused a splash at the Spring Gala has 27.
Robots don’t need to be fully humanoid to be useful. Robots on wheels or humanoids with limited motion can still take on tasks that are ripe for automation, such as dangerous or repetitive factory jobs. UBTech, a Shenzhen-based company, already supplies humanoid robots to car factories. With a shrinking workforce, China is keen to find ways to automate wherever possible.
At last month’s Boao Forum for Asia, a business conference, organisers were keen to dish out jianbing, a savoury pancake that is a typical Chinese street food, made by a robotic arm in a booth, similar to the claws that collect stuffed toys in an arcade (the resulting snack was not as crispy as a human-made offering). Parks in Beijing have ramped up their surveillance abilities by sticking cameras on autonomous buggies which drive along the paths.
“Robots are not replacing the vast majority of the labour force,” says Amber Zhang, a product manager at BigOne Lab, a Beijing-based data intelligence firm. “For instance, if you look at robot taxis, how many cab drivers are actually getting replaced? There are still a lot of hurdles”.
In a handful of cities across China, the tech company Baidu operates fleets of autonomous taxis, called Apollo Go, or robotaxis. But a recent attempt by the Guardian to hail a ride in Shenzhen was foiled twice: the robotaxis only operate in one district of the city, and when the Guardian tried to order one there, the wait was nearly 20 minutes before the app apologised and said that none could be found. A human-driven taxi turned up within four minutes. Robocops, touted by state media as a way of beefing up Shenzhen’s security apparatus, are nowhere to be seen.
But it’s undeniable that the narrative has shifted. With other sectors of China’s economy facing significant challenges – exports are under pressure from tariffs; consumer demand remains weak – the government is keen to back a winning horse. “Now that real estate is no longer a source of revenue for many local governments, they have to attract good companies and support what they are doing,” Zhang says.
The story of technology underpinning growth “is clicking for people,” says Ma, “and it’s also partly because, where else can then invest?”
That is a marked shift from just a few years ago, when tech bosses were pushed to the sidelines as Xi cracked down on excessive wealth and influence in the private sector. The sudden cancellation in 2020 of an IPO by Ant Group, an affiliate of Alibaba, sent a chill through the technology and finance sectors, as did the fall from grace of Alibaba’s founder, Jack Ma.
But Ma was recently invited to a rare in-person meeting with Xi, along with other tech bosses including DeepSeek’s Liang, as Xi tried show that tech entrepreneurs are back in fashion.
Such meetings “give us confidence” says Li. “Maybe the bad time has ended”.
Additional research by Jason Tzu Kuan Lu
