Future

China’s Robot Industry And The Trap Of State Subsidies

Students at Tsinghua University learn to make robots
Students at Tsinghua University learn to make robots
Mitch Altman
Hu Jiayuan, Hong Qingyan and Shen Yiran

-Analysis-

BEIJING â€" An in-depth report recently published by this newspaper, titled Robot Industry Development, Great Leap Forward-Style depicted the sector's troubling situation in China. The article, needless to say, triggered plenty of discussion. According to Caixin's investigative data, China currently has as many as 800 robot enterprises, although this statistic already excludes those which don’t actually manufacture robotic machines, or which operate on a very small scale.

Meanwhile, as Hu Yong, CEO of Robotschina.com, pointed out to this newspaper, only 70,000 robotic units were sold in China last year. If, on average, one unit is sold for 200,000 RMB ($30,714), this makes a total of 14 billion RMB ($2.2 billion) of output value. After taking away the 85% which are foreign imports, it means domestic products only account for 2.1 billion RMB ($322 million) of sales. In other words, when divided by the 800 firms mentioned above, each of these companies has an average annual sales of less than three million RMB ($460,666).

Industry insiders worry that due to various local government subsidy policies which were set up to boost political performance objectives, the industry is a bubble ready to burst. In fostering the rapid growth of this key sector, various practices may have been triggered, from fraudulently acquired subsidies, faking production capability, low-end competition, or even bad money driving out the good. This is definitely not what those decision-makers wanted to see when they first put forward the industrial development strategy.

Endowing subsidies is a common practice in many countries when supporting an emerging industry. But once the industry has gone through the initial period, it becomes essential to establish order and core competition â€" otherwise, subsidies can become counterproductive. High levels of subsidies can lead to a chaotic situation, and even lock competition into a price war that undermines technical progress. This might temporarily satisfy a closed domestic or regional market, or be acceptable for ordinary consumer goods. But in a worldwide high-tech battlefield such as robotics, it can be poison.

The most conspicuous recent example is China's attempt to boost the polycrystalline silicon photovoltaic industry, key to the production of solar panels. The central government had at one time overcharged on the electricity tariff so as to subsidize this industry, while various local governments vigorously put forward investment promotions to make it their pillar industry. But polysilicon production quickly started to show signs of excess. Meanwhile, since the core technology was still controlled by others, when this was coupled with international countermeasures, the industry was vulnerable. Firms began to go bankrupt. This is a wake-up call to China’s heavily subsidized and prevailing new energy vehicle and robotics industry.

Empty parks

According to this newspaper’s statistics, as of 2015, there are a total of 36 Chinese cities with the robotics industry as their focus of development. Shenzhen, for example. aims to have 200 billion RMB ($30.7 billion) in added economic value from the sectory by 2020.

Hundreds of so-called robot industry parks have popped up around China. When local authorities find that it’s hard to attract enterprises to come and invest they either relax the conditions for investment or endow them with large sums of subsidies. As a result, according to research conducted by China’s robot industry union, some of these parks have insufficient firms to reap the benefits of a scaled aggregation and attract supporting industry.

At a crossroads

Since most subsidies come from local governments, local officials naturally expect this money will result in a GDP boost that highlights their political performance. As such, when putting together all local governments’ development objectives, this turns out to have inflated by several times the overall plan set up by the central government. In other words, it has essentially become the kind of poorly planned state-run development associated with the Great Leap Forward.

This comes as the leading Chinese robotic enterprises are being squeezed by competition from both upper and lower ends, while the international technology giants claim more than 80% percent of China’s market. A price war is imminent.

Looking at China’s top robotic companies’ 2015 financial reports, we see how central state subsidies have been to their survival. How to rethink and adjust state policy so that enterprises can actually improve technology is a crucial, and complex, question for China’s leaders.

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Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Activist in front of democracy monument in Thailand.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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