Many firms say they feel little pressure to lower prices, as there are few viable alternatives to their products. — SCMP
At China’s largest trade expo, a group of buyers crowds around an automated cafe, watching eagerly as a pair of robotic arms fixes a latte.
The robotic cafe has already racked up orders worth 8mil yuan (RM4.82mil or US$1.1mil) over the first two days of the Canton Fair in Guangzhou – more than its makers had dared to expect.
“To our surprise, the enthusiasm from buyers this year has been overwhelming,” said Han Zhaolin, the founder of Dolphin Robot Technology. “Buyers from Vietnam to the Middle East showed a strong willingness to purchase on site.”
Han’s team had been uncertain about how the escalating US-China trade war – which has seen both sides raise tariffs on each other’s goods by over 120% – would affect sales. But in the end, he had little to worry about.
As a fifth-generation product, which boasts nearly 100 patents, the firm’s robotic cafe faces little international competition, Han said. That has allowed the firm to hold firm in the face of rising US duties.
“We aren’t bearing the tariff, nor are we lowering our prices, because US customers have rigid demand,” he said. “There’s nothing like this produced in the US, Germany or Japan, and similar products from South Korea cost twice as much.”
Han’s experience reflects a broader trend on display across the Canton Fair: from skyscraper-cleaning robots to bionic limbs, a wide range of Chinese-made smart products have proved remarkably resistant to the impact of the trade war.
In many cases, the systems’ core components are all locally sourced, meaning they are not affected by import duties. They also tend to be priced far lower than rival products in Europe and America – and developed much faster – allowing them to remain competitive even amid sky-high tariffs.
Zhejiang Qiangnao Technology is in just such a position. It is pressing ahead with bringing its bionic legs and hands – which are controlled by algorithms trained using brain-computer interface research – to the American market in spite of the current tensions.
The company’s smart prosthetic limbs have already received medical device certification from the US Food and Drug Administration and are covered by the US medical insurance system, said Pan Siyu, a company representative.
Priced at US$50,000 (RM219,275), they remain competitive in the market at the current tariff level, though that might change if the US were to raise levies even higher, Pan said.
“Our company’s smart bionic legs and hands ... are only one-fifth to one-seventh the cost of similar Western products,” she said. “It all depends on how high the tariffs go ... US policies change frequently. We can’t predict how our products will be classified next.”
The “Best of the Best” award at this year’s Canton Fair Design Awards went to a skyscraper-cleaning robot developed by Lindu Intelligent Tech Development, a company based in Guangzhou.
Like many of the 90,000 smart products exhibited at the expo, the robot is a self-developed and effectively unique system. It can be used to clean skyscrapers as high as 500 metres tall, requires no external plumbing, and can remain firmly attached to glass curtain walls even during a force-12 hurricane.
“There are very few competitors in the market,” said Chen Sihong, a sales director at Lingdu. “Other products still require external water pipes and wires, and can only reach about 60 metres.”
Lingdu now sells its cleaning robots in more than 20 countries, with exports accounting for up to 80% of its total sales. Buyer interest at the Canton Fair has been strong, especially among those from the Middle East, Chen said.
“Cleaning services are expensive in foreign countries. Cleaning the exterior wall of a building costs about US$2 (RM8.77) per square metre, while using our robot costs just 2 yuan (RM1.20 or US$0.27),” he said.
“The investment will be paid off with just one or two buildings cleaned. Plus, the robot can operate 24/7 and has a lifespan of up to eight years.”
Chen did not directly address the impact of US tariffs on the company’s sales, but stressed that the cost advantages and rapid innovation of Chinese tech products would become even more evident over time.
Dolphin Robot’s automated cafe, which takes up only 2.5 square metres of floor space, is able to make more than 50 kinds of drinks, including a range of coffee, milk tea, matcha and chocolate beverages. Each cup takes only 50 seconds to prepare, and can be customised by size, strength, temperature, sweetness, and ice level.
For Western buyers, a major attraction of the system is its low operating cost, according to Han.
“A single smartphone can remotely manage the entire robot cafe,” he said. “It can self-repair 90% of malfunctions, operate continuously for 10 years without the need to hire anyone, and the monthly electricity cost is only 300 to 500 yuan (RM180 to RM301) – less than 5,000 yuan (RM3,010) a year.”
“In contrast, a typical cafe in the US pays over 10,000 yuan (RM6,020) per month just for electricity.”
In some ways, the trade war may even represent an opportunity for the company, Han added.
“It’s not a bad thing,” he said. “It makes many foreign buyers more interested and more willing to try China’s new generation of tech products. That’s one of my biggest takeaways from this year’s Canton Fair.” – South China Morning Post
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